Tags containing: "streaming"

How NBCUniversal turned the Olympic postponement into multiplatform gold

July 1, 2021 Charlotte Ricca – Independent Media Reporter

Covering any Olympics is a monumental challenge. But broadcasters of the Toyko Games face challenges like no other in history. Few are feeling it more than NBCUniversal (NBCU) and its parent company Comcast, which hold rights to the Games. The announcement that Tokyo 2020 would be delayed until 2021 due to Covid-19, hit the media across the business – from advertising revenue to the launch of Peacock, its new streaming service.

However, just as the athletes are coming back stronger from a season off, NBC says this extra year has left them fully prepared for the challenge ahead. It recently announced plans to present 7,000 hours of Olympic coverage, making the 17-day affair the “biggest media event ever.”

“We have spent the better part of the last 14 months learning how to do things differently,” Pete Bevacqua, Chairman, NBC Sports Group, said in a recent press event on the network’s coverage plans. “Those skills … will absolutely apply themselves as we tackle what should be, I think, one of the most interesting and special Olympic Games ever.”

Olympics everywhere

Part of this new, improved package involved working up with other platforms to ensure that people can watch what they want, when they want. In addition to Comcast’s X1 pay-TV platform, partners like Roku and Apple TV will feature Olympic dashboards, which will guide viewers to the Games. NBCU has been working directly with a range of platforms to develop content that fits with the needs of their audience, given the specific delivery channel.

The network has also created strong partnerships with Google Search and Google OneBox. Many people will decide what to watch by going to Google, and NBCU is prominent in the Google OneBox with viewing information and highlights. And, significantly, NBCU will do a major programming push on Peacock, to help build audiences for the streamer. The company also recently announced that Peacock will launch on Amazon Fire TV and Fire tablets.

Peacock will feature new daily live shows and dedicated Olympics channels, as part of its Tokyo Olympics destination, which goes live on July 15. The streaming service currently has around 42 million subscribers. Matt Strauss, Comcast Chairman, Direct-to-Consumer and International, is “very optimistic” that the Olympic coverage will bring a new, larger audience. However, Strauss says the company is not prioritizing premium subscriptions as part of the Olympic push. Instead, the focus on ensuring that consumers check out the free, ad-supported, basic tier of Peacock.

The rights stuff

In addition to the 7,000 hours of content, across a plethora of platforms, NBCU will also flex the fact that it negotiated exclusive rights to the Olympics until 2032, which cuts out rival networks. The deal, which covers all media platforms, including free television, subscription TV, Internet and mobile rights, is valued at $7.65 billion.

What this means is, NBCU has rights across every platform – even those that have not yet been developed yet.

“We have the most complete set of rights of any sport that we have on any of our networks and that any network really has,” says Mark Lazarus, NBCU’s chairman of television and streaming. “Essentially, every technology known today or to be invented between now and 2032. That gives us the ability to try new things and to experiment. That’s what we’ll be doing across the platforms.”

“Our job is to pick the best platform for each piece of content, while trying to take the incredible reach that the Olympics have, the incredible reach that the NBC broadcast network has, and put it on the biggest stage.”

Twitch hit

One new partnership they are particularly excited about is Twitch. The collaboration will feature programming tailored to the Twitch community. This includes highlight studio shows, game-ified pre-Olympic activations, Olympic athlete interviews, and Olympic-themed gaming competitions.

“The way that people consume traditional sporting events is changing,” says Michael Aragon, Chief Content Officer at Twitch. “They no longer want to simply spectate. They want to be as close to the action and athletes as possible. We’ve seen this first-hand with the growth of our sports community on Twitch, as viewers tune in not only to watch their favorite athletes but to also take part in pre- and post-game interviews and virtually connect with other fans from around the world.”

Friends and family

Covid not only saw the Games postponed, 12 months, it has also put a stop to any international travel to Tokyo. This means friends and families of the athletes won’t be able to support in person. Plus, the audiences at big events will be capped at 10,000 people, or 50% capacity, whichever is smaller. This means there is even more pressure on the network to provide a ‘real’ experience for those that can’t be there.

This new challenge led to the creation of a new “Friends and Family” production unit, that will capture the reactions of loved ones back home.

According to Molly Solomon, Executive Producer, NBC Olympics and GOLF, the work and thought put into the Tokyo Games, during the pandemic, means they are going to be the “most meaningful Olympics of our lifetime.”

“After everything the world has gone through, as we begin to emerge from this pandemic, the world coming together is an incredibly impactful experience,” she says.

“We really have put together the most ambitious coverage plan ever. We’ve also adapted to the changing consumption habits. Our goal was to be everything for everyone. It’s our most coverage we’ve ever had.”

Advertising | Perspectives

The post-Covid streaming trend we can count on

June 2, 2021 Caroline McCarthy, VP, Marketing – true[X]

At long last, it seems there may be an end in sight for the Covid-19 pandemic in the United States. Leaders of states and municipalities that have had some of the strictest lockdown and quarantine measures are announcing their reopening dates. Vaccines aren’t just readily available, you can pretty much walk up and get one now. And, in a move that was a shock to some and a relief to others, the CDC has announced that with a few exceptions, vaccinated American adults can resume lifestyles that they’d think of as “normal.”

Getting back to life as usual means getting back to business as usual. But for those of us who work in the media industry, some things have changed permanently. We just don’t necessarily know what they are yet.

One of the biggest unknowns for our industry is streaming video, which experienced a massive boom as consumers found themselves encouraged to stay at home. That left them with new blocks of free time resulting from a lack of social gatherings, commutes, and leisure activities. But industry analysts predicted, too, that much of this would be temporary. Once lockdowns lifted, they cautioned from the start, trends would return to a baseline.

Attention

Now, with full reopenings unfolding in real time, here’s the question for marketers: How should we prepare for consumers’ post-Covid habits? The answer may be simpler than you think. Corporate mergers, tech and device launches, and subscription churn (often fueled by hit shows) will invariably have a collective impact that we can’t quite predict. What we can count on is that the real variable is attention.

In the ad industry, we know our business has always been all about attention (or at least we should). But right now, as we exit an unprecedented surplus of attention thanks to a year of quarantines, lockdowns, and stay-at-home orders, the streaming wars are getting more heated than ever and consumer viewership trends could go in any number of directions. There’s never been a more important time to invest in quality content and experiences.

Boom

Where to start? First, we really have to grasp just how massive streaming growth was last year. Subscriptions to streaming services, already on the rise, reached 1 billion worldwide; over 25% of consumers in the U.S. subscribed to at least one new service during the pandemic. With many live sports canceled, many consumers reevaluated why they were keeping a traditional cable subscription around. And quite a few of them decided it wasn’t worth it, as “cord-cutting” hit record highs. Sales of connected TV devices also shattered records, with a spike over the holiday season.

As for advertising? In spite of the fact that many of the biggest streaming services have no advertising, ad-supported services increased their share of the market during Covid, from 28% to 34%.

In other words, when COVID-19 hit, the streaming industry was gifted with unprecedented access to consumer attention — probably more of it than we deserved. Now, there’s renewed competition for that attention, with Americans eager to finally travel, socialize, and spend time with loved ones in person rather than over Zoom.

Whether they’ll ditch one streaming service for another (and if so, which ones) is a big question mark. But consumers will be more discerning with their time and attention, and more than ever, they’ll spend time where their attention is respected.

Respect

What does that mean, specifically?

First, attention is up for grabs.

When Covid hit, streaming was already experiencing both skyrocketing consumer growth and some seismic shifts on the business side that gave users even more options for where to spend their attention.

Devices like the PlayStation 5 debuted; services like HBO Max and NBC Universal’s Peacock launched. The announcement of WarnerMedia and Discovery’s $43 billion merger is a reminder that upheaval in the industry — and hence, the potential for changes and upgrades in consumer offerings — is far from over. High rates of subscriber churn mean that loyalty is still anyone’s game.

Second, the connected living room is here to stay.

Some of the most confident predictions about post-pandemic consumer habits have indicated that once people switch from linear TV to streaming, they are unlikely to switch back. Covid cord-cutters, for example, probably won’t resubscribe to their cable bundles (especially since live sports’ presence on streaming continues to grow). And while both linear and connected TV usage rose during the first few months of the pandemic, ComScore found that virtually every household streaming device continued to grow in data usage even after initial lockdowns began to lift. The biggest growth? Smart TVs, which many households had at home but weren’t even using for streaming before.

This is great news for marketers because, to put it simply, connected TV is great at getting consumers’ attention. Our research at true[X] has found that compared to desktop and mobile, an ad on CTV drives more brand lift at every stage of the purchase funnel. But there’s a catch…

Third, the winners will be the ones who respect that attention.

Streaming is the inevitable future of TV, but that doesn’t mean just being on CTV is enough. Subscription churn is still heavy and consumers have many options —including plenty with no ads at all. With time in front of the living room TV facing new competition for attention as the Covid crisis comes to a close, consumers will be more discerning about what they’re willing to put up with. They already didn’t want their attention to be exploited or wasted, and that will only be more pronounced now. That’s why streaming advertising needs to be better — more relevant, less intrusive, and with less volume — than linear TV and desktop and mobile video advertising. Just being on a bigger screen where people tend to sit down and commit to longer content isn’t enough.

Opportunity

If you work in digital media, whether on the advertiser or AVOD publisher side, and you want to keep capitalizing on the streaming boom, this should be what you care about. Are you confident that your ads work, so that you don’t have to rely on high frequency (and annoy viewers in the process)? Do consumers have an experience that they don’t hate? This is the time to answer those questions, and make it more likely that consumers will lend their newly scarce attention to you.

Industry-Research | Revenue

Publishers show digital growth amidst pandemic closures and consolidations

October 26, 2020 Rande Price, Research VP – DCN

Digital subscriptions have helped shape a stronger business for publishers. FIPP’s latest Global Digital Subscriptions Snapshot (Q3 2020) shows that subscriptions are serving to support publishers during the pandemic. In fact, research by Press Gazette reports that during the Covid-19 crisis the largest newspaper groups in the US and UK gained more than one million new digital subscriptions. Not only are large publishers faring well but smaller, regional and specialist brands are also showing record subscriptions.

Despite positive performances in digital subscriptions, Covid-19 brings with it challenges to the industry. Zenith Media expects a 9% decline in internet ad spend this year. The agency estimates a 6% recovery in 2021, driven by the rescheduled Tokyo Olympics.

On a global front, the middle east and Africa will be hardest hit with a 20% decline in advertising revenue. Western Europe anticipates a 15% decline and Latin American a 13% decline in ad spend. The Asia Pacific, Central and Eastern Europe markets are estimated to decline by 8%, respectively. North America expects to register the smallest decline (7%) due to the large spend on political advertising this year.

FIPP Q3 findings:

News publishers’ subscription growth

The Athletic reports 1 million subscribers as of September 2020. Unfortunately, with only a few new subscribers in Q1 2020 and cancellation of live sporting events, the company laid off approximately 8% of its staff. In addition, there were pay cuts across the company to offset expenses.
Caixin Media in Beijing grew subscriptions by 70%, adding 210,000 new subscribers for a total of 510,000 this year. It’s the first media company in China to place all of its content behind a hard paywall.
Dow Jones reports that digital revenue now accounts for 71% of total revenue, up from 63% compared to the same time period last year. Total subscriptions, across print and digital products, is at 3.8 million, driven by a 28% increase in digital subscriptions. Interestingly, 2.2 million of the Wall Street Journal’s 3 million subscriptions are digital-only. Across the entire Dow Jones group, digital subscriptions account for 67% of subscription revenues.
Gannett is centering their business around digital transformation. To date they are close to one million paid digital subscribers.
The New York Times’s added 669,000 new digital subscriptions in 2Q 2020 for a total 5.7 million digital subscriber. In fact, for the first time ever, digital revenue now exceeds its print revenue. Overall, the company’s operating profit of $52.1 million is down 6.2% compared to same time period one year ago.

Magazine closures

South Africa magazine closures:
- Associated Media – company closure
- Caxton – selling off 80 titles
- Media 24 – closed 2 of 5 titles
UK magazine closures:
- Immediate Media – closed 11 titles
- Bauer Media UK – closed 10 titles
- Broadly – exited New Zealand, closed 8 titles and consolidated with Australian Mercury Capital
- PLC – closed 6 titles
- T1 media was acquired by Future

Streaming growth

Netflix consistently delivers content with new productions and licensing deals to the consumer market. As of Q2 2020, there are a 193 million subscribers globally.
Amazon Prime Video, part of Amazon Prime, is very successful in the SVOD market. Subscribers reached 150 million globally. The company does not break out Prime Video from Amazon Prime. The company does not provide details on active users of Prime Video. However, the Kantar Entertainment on Demand Report offers a third-party analysis SVOD users. The Kantar Q2 2020 analysis shows that Amazon Prime Video subscriptions account for 23% of all SVOD subscriptions. That marks a 14% increase from the prior quarter.
China’s merger discussions between Tencent Holdings and iQIYI could establish the world’s largest streaming service with more than 231 million paying subscribers.
Disney+ is exceeding all expectation with currently has more than 60.5 million subscribers.
Apple TV+ claims 10 million subscribers. However, many subscribers are part of a 1-year free trial offer because they are users of the hardware. Further, Bloomberg estimates that about half of Apple TV+ subscribers never used the service.

The coronavirus’ impact on the advertising industry further strained publisher revenues and forced several to close their doors and others to consolidate. The pandemic also showcased the consumers’ need for trusted news and entertainment content. This need feeds into the relationship of publisher and consumer. Its why consumers value the content and are willing to pay for it.

Featured Post | Innovation | Perspectives

In a crowded streaming market, content alone will not ensure survival

April 18, 2019 Chris M. Sutcliffe – Independent Media Reporter

The cord-cutter’s dream of paying less for entertainment content is already on the rocks. Early analyst warnings about the reality of subscription saturation have filtered through to the mainstream, with a Mashable article titled ‘There are officially too many damn video streaming services’ reaching the front page of reddit. In it, Mashable’s Senior Tech Correspondent Raymond Wong argues that while Disney’s annual $69.99 fee is probably worth it for access to Disney’s vast stock of content from Marvel, Pixar, Fox etc., the arrival of yet another challenger to Netflix’s streaming dominance may ultimately be bad for the consumer.

“$14.99 for HBO, $10.99 for Showtime, $9.99 for Cinemax and $8.99 for Starz all feel expensive relative to Disney’s $6.99 price”
???https://t.co/6hBhzlGQfR
— Rich Greenfield (@RichBTIG) April 15, 2019

Between Netflix, Hulu, Disney+, Amazon Video, CBS All Access, the upcoming Apple TV+ and any number of other services, it’s easy to see why. Each has exclusive content across a wide variety of genres, so in theory each at least have one or two shows of interest to most audiences. It’s the ice cream stall dilemma on a larger scale: A huge amount of choice, but actually picking one feels more like denying yourself access to every other service.

How much is too much?

So, to get access to all those films and shows would require a number of subscriptions, the total cost of which will run into the hundreds of dollars per month. Small wonder that redditors pushed the Mashable article to the front page; the promise of cheaper, unbundled OTT entertainment is now in doubt. Subscription saturation is already here, and there will be casualties. Even Netflix has already borne the brunt of Disney’s entrance into the space, having lost as much as $8 billion off its market cap in the aftermath of the announcement.

To compound the problem, it’s highly unlikely that the number of streaming services has capped out. For media companies with huge back catalogues of film and television shows, it is far better to own the distribution system, audience data, and direct revenue. So, expect more efforts like The Criterion Channel to launch. Meanwhile, to differentiate themselves from the giants like Netflix and Amazon, smaller streaming platforms like Shudder are making a play for niche audiences clustered around a particular genre.

Hulu is embracing that fact that, with so much competition, people are probably going to jump around between video services. It’s just trying to keep them coming back to Hulu. https://t.co/cjAgrDuFtH
— Ashley Rodriguez (@AshleyRReports) April 16, 2019

Standalone value

However, while people are more habituated to pay for entertainment content than digital news, there is still a finite amount of subscription revenue out there. More than any consideration, the exclusive content available on a streaming service will be a deciding factor for audiences. That does not mean, however, that the broadest range of films and shows will necessarily win out.

The lure of a new show is what typically attracts subscribers to a streaming service in the first place. CBS All Access made the exclusivity of shows like Star Trek: Discovery the tentpole of its marketing. It even went so far as to commission some short episodes between the first and second seasons to convince subscribers who might have been tempted elsewhere to remain with them.

Similarly the announcement of Apple TV+ notably contained no information about pricing. However, it did showcase the triple-A nature of its commissioned shows and movies, with names like Steven Spielberg, J.J. Abrams, Oprah Winfrey, Jennifer Aniston, and Kumail Nanjiani already on board.

Originals approach

Netflix, wary of the media companies whose content is has licensed until now pulling their content, is also heavily investing in originals. It is reportedly spending $15 billion in 2019 on content, with a commensurate increase in its marketing budget so that everybody knows about it. Analysts expect a close to $3 billion marketing budget this year. It is obvious, then, that the range of content each platform has is currently seen as the differentiating factor for the bigger players in the space.

(This issue is muddied slightly by content considerations, with some US ‘exclusives’ being carried by competitors internationally as with Star Trek: Discovery appearing on Netflix elsewhere, and the requirement for streaming services to create a proportion of their content domestically when they enter a market like France.)

As mentioned earlier, however, there are some services that are making their niche nature the selling point to consumers, trading less mass-market appeal for a more targeted approach to exclusives. Horror-based service Shudder (owned and operated by AMC) has both negotiated the exclusive rights to certain horror movies and commissioned original content, while DC Comics’ VOD service (currently only available within the US) offers access to shows based around popular characters from the comics.

These services, with lower price points, are wisely trying to avoid the crush at the top by offering services that are additive to the larger services rather than in direct competition.

However, as the field becomes more crowded, it is unlikely that content alone will be the sole deciding factor for audiences looking to optimise their subscription spending.

Here, then are three criteria that might help determine which of the current services will be among those counted as ‘winners’:

User experience

Much has already been written about the discovery and recommendation options offered by Netflix, Amazon Video, and their ilk. Between the wealth of user data to which they have access and some smart people at the helm, those services have made user experience as smooth and effective as is possible. In April 2017, UX expert Justin Ramedia wrote:

“Netflix, through an easy-to-use interface, showed us how simple watching entertainment through the internet could be. They used strategic partnerships with Nintendo, Xbox, Roku, Amazon and more to ensure that people didn’t have to watch from their computers. Anyone could sit with their friends and family and stream thousands of hours of media whenever they liked. That genie won’t go back into the bottle.”

One of the criticisms that was most frequently levelled against The Criterion Channel’s defunct predecessor FilmStruck was that its UX was lacking. While in the UK, VOD services like the ITV Player and the BBC’s iPlayer are serviceable lack some of the recommendation tools that have been instrumental in making sure that users stay glued to Netflix even after the whole series has been binged.

The reality is that as newer entrants into the market begin offering exclusive content, they will inevitably be measured against the best in the environment. In order to succeed they’ll need to be as good or better to compete, as we’ll discuss later.

Platform availability

As Ramedia pointed out, Netflix made it a point to have a presence on each and every possible platform, from desktops to connected televisions to games consoles, including the shockingly poorly selling Wii U. Now, Disney appears to be following suit: Its announcement included a slide that showed each piece of tech hardware it intends the service to run on.

All the devices !!!!! #disneyplus pic.twitter.com/srdnc4D18z
— What’s On Disney Plus (@disneyplusnews) April 11, 2019

The point about existing across all these platforms isn’t that those streaming services believe they’ll necessarily get tons of sign-ups through those platforms or even because they exist on them. After all, the install base of the Nintendo Switch, while impressive for a relatively young console, is far smaller than the number of people who will sign up on desktop or connected TV. Instead, it is primarily in service of providing a holistic service to their subscribers, ensuring that they always have access to one particular streaming service on each and every device they own.

As with UX, the idea is to reduce any possible friction for a subscriber base, to ensure that no competitor gets a look-in or advantage from existing on a device that Disney+ does not. And as another plus for us Switch owners, it all but guarantees that Netflix will join Hulu on the console sooner rather than later.

Entrenchment

For many, Netflix’s early entrance into the market all but guarantees it success. It is the go-to comparison when we talk about rival streaming services, and its ubiquity has led to ‘Netflix-like’ comparisons for other digital services. Its entrenchment in the market is primarily due to the early mover advantage it has enjoyed, of which the service is keenly aware. As its competitors gear themselves up to compete in terms of content, Netflix appears to be digging itself in deeper by prioritising maintaining market share above profit. As Variety’s Todd Spangler reports:

“One reason Netflix is continuing to make big investments now is that it’s going to face serious new streaming competition from media giants Disney, WarnerMedia and NBCUniversal starting later this year. So it’s focusing on building out a wider moat instead of delivering profits, a strategy Wall Street continues to praise.”

That makes it an uphill struggle for any new entrant into the market. This is the case even for those without the deep pockets of Amazon, Apple or Disney who can gradually chip away at Netflix’s 139 million global subscribers through offering lower price points or a greater back catalogue.

Despite the ongoing success of the larger streaming services, growing consumer dissatisfaction with the total cost of subscriptions and a soft cap on the amount people can afford to pay means competition is only going to get fiercer over the next few years. And as the dismal performance of YouTube Red (now Premium) demonstrates, investment in original content alone is unlikely to be the sole differentiating factor. Instead, a combination of the other three criteria and harder to measure qualities including audience affinity with a brand are likely to be the determining factor for success in the streaming world.

Ads are coming to streaming TV. But will consumers buy in or opt out?

August 30, 2018 Mark Glaser, Founder and Publisher – MediaShift

One nice bonus of being a cord-cutter is that you don’t get inundated with a lot of ads. Many over-the-top (OTT) streaming services offer ad-free viewing, and those with ads have tried not to anger viewers. But as streaming services gain more and more viewers, advertisers are finally getting a chance to reach the “unreachables.” And the numbers back that up: The connected TV advertising spend will hit $8.2 billion this year, according to Tru Optik, rising to $20.1 billion by 2020.

Recent acquisitions and new technologies signal that companies such as AT&T, Sinclair, Adobe, and even Netflix are planning to add advertising to the mix, which will give targeted ads on OTT programming a new path forward. This heavy investment in OTT shows where advertisers are placing their bets. But ultimately, good advertising — advertising that’s relevant and interesting for audiences and profitable for marketers — is what will make these moves worth it.

A Megamerger for Addressable Ads

Now that the AT&T/Time Warner acquisition has finally closed (despite an ongoing lawsuit from the Department of Justice), AT&T can take advantage of the data trove Warner offers to focus on addressable ads that scale. This means it can take viewer data and information to craft highly specific, highly targeted advertising. AT&T has been experimenting with addressable TV for a while, as I previously wrote.

In June, it announced it would also acquire the digital ad platform AppNexus, which helps AT&T expand advertising beyond its own devices and partner with media companies. The goal for AT&T is to reach both the streaming audience and the traditional TV audience; it wouldn’t matter where a viewer is watching from or whether they have a cable or satellite subscription.

And AT&T’s plan is not a completely novel concept, as CNBC’s Michelle Castillo wrote:

“The service would be similar to Comcast’s Freewheel, which is used by TV networks and major video distributors to serve ads on their streaming content. Freewheel places addressable ads on NBCUniversal content (owned by Comcast), as well as partner networks like Viacom and Disney. Ads can appear on traditional (linear) television programming, on video-on-demand content accessed through cable set-top boxes, and on streaming OTT services that use a device to connect to the internet.

Emerging Ads, Emerging Tech

Not to be outdone, Sinclair Broadcasting Group recently launched CompulseOTT, an ad product to help sell local ads into streaming services around the country. CompulseOTT currently has more than 2,000 segments advertisers can use to target audiences and is available on multiple OTT platforms.

Recent deals in the ad tech world also show that both networks and advertisers are making bigger bets on targeted ads on OTT. Liveramp, an identity unification platform, recently inked deals with the data company Inscape as well as Adobe. With Adobe, Liveramp will use its data to oversee Adobe’s Advertising Cloud. With Inscape, Liveramp will be able to better merge TV and digital audiences, and therefore offer a more fluid audience to marketers.

iSpot has also been helping marketers move more easily between digital and TV audiences. It’s been tracking advertising throughout the entire TV ecosystem and recently developed a custom-segments feature that advertisers can match their digital segments against. Theoretically, iSpot’s tools can help brands optimize their spending.

And even Netflix, the bastion of ad-free viewing, has started experimenting with ads that promote its own shows. That move definitely ruffled users’ feathers. Subscribers expressed disdain at the breaks they were paying to avoid – not to mention worrying if pay ads might come next for the highly leveraged streaming giant.

Making the Audience Happy

But here’s the rub: As much as addressable advertising is becoming more and more possible, giving marketers detailed targeting for streaming audiences, the question remains if the public will buy in or opt out.

Seventy-four percent of Americans don’t believe TV advertising is relevant to them, according to research by Adobe Digital Insights. Nearly 60% of Americans are streaming content, and mostly with Netflix (and don’t forget: its viewers were pretty angry at the idea of ads). Skipping and blocking ads is just as routine as paying money to have no ads at all.

In other words, the route to reach audiences may be different with OTT programming. But the experience of reaching them will likely mirror advertising elsewhere. So, before marketers can claim a breakthrough with streaming audiences, let’s see what the new process of making ads interesting and relevant will be — and make sure the costs of doing so don’t exceed the benefits.

Industry-Research | Video

SVOD subscriptions become the norm

July 26, 2017 Rande Price, Research VP – DCN

Consumer appetite for content is going strong: Viewers watch 4 hours and 23 minutes on average per day. However, traditional TV viewing is declining while viewing of subscription video on demand (SVOD) services is growing. In fact, subscribing to a SVOD service is becoming the norm. Two-thirds of viewers now subscribe to at least one of the three big SVOD services (Netflix, Amazon, or Hulu). In fact, according to the Hub Entertainment Research Study, Decoding the Default, 38% of viewers subscribe to two or more of the “Big 3.”

Among SVOD subscribers, three-quarters report that Netflix was their first SVOD subscription. Currently 61% of viewers subscribe to Netflix, 36% to Amazon Prime, and 22% to Hulu.

Consumers have multiple reasons for having more than one SVOD service:

Top explanations for adding Hulu to Netflix: to watch specific shows not available on Netflix (54%) and for greater selection of shows and movies generally (45%)
Top explanations for adding Amazon to Netflix: for greater selection (33%), for Amazon originals (33%), and for access to movies not on Netflix (31%).

Exclusive!

Access to exclusive content is recognized as the key driver of SVOD subscriptions. Hub Entertainment Research identifies key consumer benefits for each platform.

Live TV: Breaking News (71%), Local TV (71%) and Local Sport Events (69%).
Netflix: Binge Viewing, Past Season Viewing (39%) Viewing (34%) and Watch on the Go (24%)
DVR: Catch-up Viewing (27%), Specific Show (16%) and Full Attention (16%)

Netflix appears to be the stickiest among those who default to Netflix. Just under two-thirds (63%) report they would drop other TV services before dropping Netflix.

Why SVOD?

To address the SVOD adoption trend, broadcast and cable networks increasingly offer multiple episodes or complete seasons via video on demand (VOD) to encourage binge watching of new series. However, these efforts have found limited success.

SVOD offers both a social and an individual experience. This is important to attract younger audiences. The growth of OTT services is changing the television industry. It will be interesting to see how the market evolves. Key questions include what new strategies will emerge and how will viewership be monetized beyond subscription revenues Will it be advertising, advertising free, or advertising light?

Advertising | Industry-Research

Meeker’s annual report exposes opportunities to connect with consumers

June 6, 2017 Rande Price, Research VP – DCN

Mary Meeker’s annual Internet Trends Report is often referred to as the state of the union for the media and technology industry. In it, Meeker—a partner at venture capital firm Kleiner Perkins Caufield and Byers (KPCB)—highlights the biggest internet developments for the coming year. Her report provides insights on digital adoption, identifies which interfaces are resonating, and examines the dynamics of ecommerce.

Some key takeaways from her presentation:

Mobile dominates digital usage. U.S. adults now spend 5.6 hours a day using digital media, 3.1 hours (from 2.8 in 2015) via mobile devices and 2.2 hours on desktop and laptop.
The ad spend on mobile is not proportionate to the share of time spent on mobile. While consumers spend 28% of their time on mobile, only 21% of the digital ad dollars is spent on mobile media. This is expected to correct itself in the second half of this year.
As internet advertising continues to increase, the growth is concentrated in Google and Facebook, the internet duopoly. Meeker’s report notes that Google and Facebook control 85% of online ad growth. Google’s ad revenue grew 20% and Facebook 62% in 2016. For everyone else, the growth was less than 10% year over year.
Internet users are concerned about their privacy and security online. Consumers report being concerned with how their data is being collected, used and stored. Consistency and self-regulation of privacy policies are important steps in the monitoring the Internet ecosystem.

Where Meeker’s insights meet opportunity:

Voice recognition software and devices such as the Amazon Echo and Google Home are reshaping the consumer digital experience. In fact, Amazon Echo is now installed in 11 million households in the U.S. Further, 20% of all mobile searches are now voice activated.
Gaming goes mainstream. There are now 2.6 billion gamers today compared to a 100 million in 1995. In fact, viewing time for eSports, professional video gaming live-events and tournament, increased by 40% compared to a year ago. The gaming revenue concentration remains in Asia, with 47% of 2016’s $100 billion global market. Meeker believes video gaming’s socially engaging features will offer new businesses opportunities and sporting events.
Streaming music helps revives the music industry. Spotify, the marketplace leader, exceeded physical music sales, adding to the first revenue growth in the music industry in the last 16 years. Free trials are also driving sampling and subscription sign-ups.
Healthcare data is flowing with approximately 25% of U.S. consumers owning a wearable device, up 12% from a year ago. Further, 6 in 10 people report they are willing to share with health information with Google. Collecting and analyzing healthcare data has huge implications for the medical and healthcare sector from aiding clinical trials to identifying geographical and environmental healthcare concerns.

The marketplace is rapidly advancing and continues to grow in importance. According to Meeker, the top 20 Internet companies—many of which were not around before 1995—have a market value of nearly $3 trillion. New media platforms and information technologies are transforming new market economies. Yet it is important to note that Meeker sees new opportunities across multiple platforms to connect and add value for consumers.

Perspectives | Revenue | Video

Who’s winning (and losing) the online video boom?

May 18, 2017 Mark Glaser, Founder and Publisher – MediaShift

As the NewFronts wrapped up, there was a growing feeling that online video wasn’t just a precursor to the Upfronts and broadcast that were coming next. The NewNew Fronts are becoming the main event.

Traditional TV networks are losing their audiences as competition from non-linear, streaming programming is rising — everything from Netflix and Hulu to Facebook and Snapchat. Digital ad spending overtook TV ad spending for the first time last year ($71.6 billion versus $71.2 billion, respectively), according to eMarketer. A new report commissioned by the IAB found that spending on ads around original digital video programming has doubled in the past two years.

These inescapable trends are creating a new frontier for publishers trying to reap the benefits of the video ad boom. Broadcasters and newspapers are trying to figure out how to allocate more resources for video, while digital-native publishers try to keep up with demand.

With that in mind, here’s a rundown of some of the winners and losers in the online video explosion.

Winners

Comcast

NBCUniversal, the digital offshoot of the traditional broadcast network, earns major points for having invested $500 million in Snap (think long-term, not just the first earnings report!), $400 million in BuzzFeed and $200 million in Vox, thereby creating partnerships that benefit both traditional and new media players. When Conde Nast joined the NBCUniversal and Vox Media advertising network, the digital conglomerate announced it’ll reach 200 million consumers online, including 99% of all millennials in the U.S. And these three entities are together developing two new ad products around mobile video and branded content.

Facebook

If there is a behemoth winner in the house, it’s surely Facebook. The world’s largest social network has pushed its news feed to prioritize video, and publishers have to post videos there if they want to reach Facebook’s nearly 1.3 billion daily users. Recode’s Kurt Wagner reported last month that Facebook is planning to pay publishers to create more produced video on the platform, to help push its new mid-roll ad products (the new deal will replace the one Facebook struck with publishers last year to use Facebook Live).

Facebook will offset the cost of paying publishers by earning the money back from the mid-roll ads, and then splitting whatever revenue remains with the publishers. While some publishers are hesitant to embark on such a deal with unproven benefits — no one knows how the ads will fare yet, and earning returns on Facebook video has long been a frustration for publishers — many others will give it a shot.

YouTube

Like Facebook, Google’s YouTube is riding the benefits of the online video boom. YouTube may have stumbled earlier this year when advertisers found their content showing on extremist videos, but it’s still the world’s most popular video destination. And now the world’s most popular video website is planning to produce six different ad-supported original series and develop more than 40 original shows and films over the next year. It’s also investing more resources into its ad-free subscription service YouTube Red (and the YouTube TV skinny bundle), pushing YouTube into a tier of competition that includes Hulu, Amazon Video and Netflix.

Google earned more than $24 billion in advertising sales in the first quarter — more than that of the entire TV industry – even in the face of boycotts over brand safety. The tech giant is betting on high-profile YouTube stars and celebrities to bring viewers to these advertisers, and has made changes to improve controls for advertisers. If it continues to cultivate a wide audience around its original programming, it can certainly demand higher rates from advertisers even in the face of setbacks.

New York Times

The Gray Lady may have been a late bloomer to the digital boom, but its adaptation strategies are certainly catching up. Its subscriber growth is the highest its been in its history, thanks in large part to the post-election bump — as well as wise investments on digital offerings. If you haven’t noticed, many articles online now feature video content alongside it. In February, the Times announced it’ll feature fresh daily content on Snapchat Discover. Alongside pushing VR video as an editorial decision, it’s also been publishing VR branded content.

And at this year’s NewFronts, the Times announced “Times Story[X],” which will launch this summer and serve as a powerhouse for creating strong visual, technologically forward narrative journalism that both the newsroom and its marketing unit T Brand Studios can use.

Losers

Traditional TV networks

The four major broadcast networks lost 8% of their audiences this TV season, adding to a four-year trend of declining TV ratings. TV networks have also increased their ad prices in these last four years in an effort to offset declining viewership — which doesn’t necessarily bode well for marketers. The ad-buying agency Magna has announced it’s shifting $250 million of its budget originally allocated for TV toward YouTube.

The Walt Disney Company, which owns the ESPN cable network, missed its revenue target this past quarter and announced in April it’s laying off 100 people to cut costs and better adapt itself for digital distribution. Time Warner and Viacom have also reported that second-quarter advertising revenues are likely to decrease. It’s no wonder: Viacom’s MTV, once the go-to network for younger audiences looking for information and entertainment catered to especially for them, is losing its viewers to Snapchat and YouTube.

Advertisers sticking to TV (and not diversifying)

Advertisers know that they can guarantee audience reach with the time they have with television advertising. Traditional TV has also benefited from the brand safety issues marketers have faced when their content has inadvertently popped up against extremist propaganda on YouTube. Networks touted their reach and reliability for serving up mass audiences, in a New York Times story, but they also face tough competition from targeted ads on social platforms and the explosion of choices on streaming services. But it’s still a question of when, not if, those ad dollars will move to digital video.

In the end, the winners of the video boom will be those publishers, platforms and brands who embrace the power of video, but make sure it fits with their mission – and serves their intended audience. Native video publishers like NowThis and Hulu might have an advantage, but legacy publishers and broadcasters still have a chance to shine if they can evolve quickly.

Advertising | Industry-Research

Today’s challenges offer an opportunity to rebuild trust in digital media

January 24, 2017 DCN

With trust in mass media at a record low, publishers look to 2017 as an opportunity to distinguish quality journalism from the fake news landscape and bot traffic of big tech platforms.

CEOs, editors and digital leaders today recognize both the opportunities and the challenges in 2017. Reuters Institute surveyed 143 senior publishing executives in 24 countries to recognize current business sentiment, uncover trends and identify new developments in the digital marketplace. Interestingly, Reuters found that more than two-thirds (70%) of executives believe fake news offers them a chance to strengthened their brands. More than half (56%) say that Facebook Messenger will be an “important/very important” part of their offsite initiatives this year (53% for WhatsApp and 49% for Snapchat). And at the same time, just under half (46%) of these same respondents are more worried today than a year ago, about the role of offsite platforms.

In Reuters Institute’s annual predictions report, the key trends identified for 2017 include:

1. Addressing fake news

Fact-checking news outlets becomes the new norm.
Platform and algorithm changes allowing for easier reporting of false news (and feeding these signals back into the core algorithms so these sources get devalued).
Regulation threats to remove fake news from sites.
Algorithms are expected to challenge our bias.
Fighting for quality news brands.

2. Redefining publishers’ relationship with platforms

Publishers fight back by creating platforms of their own (e.g. Schibsted, started its own platforms for content and advertising to create the scale and data competence to compete with Facebook).
Platforms pay hard cash for content.
Mergers and acquisitions happen more often as scale will mean operating across multiple platforms.

3. Digital advertising and sustainable business models

Subscription payments will focus more about membership and less about paywalls. News publishers, especially, will need to attract new customers, offer new pay services and earn more money from their current subscribers.
Data, loyalty and personalization will help with converting unidentified web users into loyal customers by creating more relevant and personal experiences.
Mobile alerts and the battle for locked screens signifies the shift to mobile notifications to attract consumers back to apps and websites.
Acceptable ads and ad-blocking apply pressure on the marketplace to ensure a more positive user experience with non-intrusive advertising.
Sponsored content replaces the displayad model.
Pop-up newspapers and magazines will offer in-depth coverage on certain topics but for only a limited period of time.

4. Messaging applications and news bots

Voice news bots with voice-activated platforms gain strong penetration (e.g. Alexa and Google Home).
Fact-checking bots are activated (e.g. Full Fact, a UK based company, is already looking to developing a service that fact checks live press conferences).
Conversational commerce emerges (e.g. Crosby, a travel bot service, that reads your email or group messaging conversations and send you recommendations for where to eat, what to do and when to leave for the airport).

5. Voice as an operating system and the rebirth of audio

Podcasts and audio books get a big boost in the car.
Improvements to data and advertising around podcasts lead to significant investments by publishers. A new measurement system form Nielsen’s and a Swedish start-up platform Acast offer metrics for podcasts to support advertising models.
Businesses start to deploy Amazon Echo and Google Home speakers (e.g. hotels use voice-controlled devices to enable guests to order room service, check the weather and find TV channels).

6. Online video and the future of TV

Disillusion with Facebook Live shifts a live focus towards sport and exclusive music, both strong vehicles to attract audiences and advertisers.
Oversupply of short form video leads to falling advertising premiums.
New opportunities with feature-based videos for brands integrate messages into videos.
Video-selfies to experiment with new fantastical filters (e.g. Splash is a new app that allows you to create and annotate 360-degree experiences).

7. The blurring of television and online video

Top content will increasingly be watched on big screens.
Competition for talent and rights heats up to drive new subscription and retain existing users.
News bulletins lose audiences triggers new ways to appeal to young (e.g. CNN acquired video-sharing app start-up Beme, co-founded by YouTube creator Casey Neistat, is building a new brand around distinctive reporting and commentary for millennials).
New cross-platform metrics for TV.

8. Virtual Reality (VR), Augmented Reality (AR) and Mixed Reality (MR)

New reality tech offers huge potential to shape experiences for entertainment, education and commerce. Forecasters suggest around 30m devices will be sold by 2020 generating revenue of around $21 billion.

9. AI and algorithms under fire (e.g. An example gone sour was Microsoft’s friendly AI driven chatbot Tay. Within its first 24 hours on Twitter with Millennials, it was spouting offensive and racist messages such as “Hitler was right”).

10. Automation and a jobless future means robo journalism on the way

More automated stories.
Intelligent content production systems.
Computer and networked assisted investigations.
Filters and alerts are being developed to help manage the information overload (e.g. SamDesk and Dataminr are deployed in newsrooms to pinpoint and manage breaking news in social networks).

11. Cyber-Wars, and Personal Security

Encryption and surveillance are on the rise.

12. New technology

Sharper screens, fold out phones, better batteries.
Faster and more reliable networks (e.g. 5G).
Clothes as a platform with wearable technology.
Biometrics, the end of passwords and checkout-free shopping. A new shopping experience, Amazon Go, that automatically detects when products are taken from or returned to the shelves using computer vision and sensor fusion.

13. Start-ups to watch

Cheddar is a new business news video network for millennial. Founder Jon Steinberg of Buzzfeed is charging $6.99 for premium services on its own website and is looking to drive carriage fees from services like Facebook Live, Twitter and Netflix.
Zipline is a small robot airplane designed to carry vaccines, medicine and blood in developing countries.
Houseparty is a new group video chat, up to 8 people can chat at a time, from the creators of Meerkat.
Accompany aims to provide an automated briefing of all the information you need before you walk into any meeting including relevant files, email conversations with attendees, details about their lives sucked from the web plus up-to-date information on company performance.

2017 provides many opportunities for publishers to rebuild consumer trust in digital media. The Reuters Institute predictions suggest that publishers must help scrub the digital environment from bot traffic, annoying ads and fake or misleading news. They must hold themselves and others responsible and keep a watchful eye on the algorithmic accountability tied to the digital experience. Importantly, publishers must continue to build their digital brand and diversify their revenue streams beyond digital display advertising.

Industry-Research

Most young adults pirate content and many don’t even know it’s wrong

September 21, 2016 Research Team

Sixty-nine percent of young millennials use at least one method of piracy (download, stream or mobile). Even more alarming, however, is the finding that 24% of those surveyed believe that both downloading and streaming piracy are legal, according to the report Millennials at the Gate from creative advertising agency Anatomy Media, which looks at the streaming, piracy and ad blocking behaviors of young (18-24) adults.

Other key findings include:

2 out of 3 young adults use an ad blocker
3 out of 5 young adults who stream content use a shared password or cable log-in
60% stream content without paying for it
While more than half say they share their parents’ log-in (58%), only 13% of those actually live with their family

According to the report, millennials use ad blockers “to assert control over their user experience, reduce their data usage and get access to their desired content faster.” However, they believe that millennials will accept advertising as long as it is “restrained, targeted and relevant.” Thus, Anatomy urges a focus on user experience overall.

Innovation

Twitter looks to live streaming to spur growth

August 25, 2016 DCN

Twitter has been dealing with sluggish user growth for some time. As such, over the last year, since it brought back Jack Dorsey as CEO, the company has been experimenting with various ways to solve this sticky problem. One idea has involved signing some high-profile live streaming deals—including the NFL, CBSN and Bloomberg—and streaming content directly on Twitter.

Twitter understands its loyal user base loves to talk about politics, sports and the stock market. It is betting that by streaming content from these different content owners, it can attract new audience that hadn’t used it before who will presumably also join the conversation—at least that’s the theory. The fact is, however, that Twitter is not exactly the first place you think of to watch a football game or get stock reports from Bloomberg, but it is hoping to change that perception, and in the process begin to grow that stagnant user base.

What’s the strategy here?
On its face, it could be difficult to tease out the end game here. If everyone who uses Twitter is already talking about live events on the network, how is streaming content directly going to give them any additional lift?

It certainly a question that baffles Dan Rayburn, an analyst at Frost and Sullivan, who has been covering the streaming media market for years. “Obviously they have a strategy, but I don’t know what it is. I don’t get it. Twitter isn’t a place people think of for long form content,” he said. In Rayburn’s view, simply getting a deal to stream content won’t necessarily achieve the desired goal. “Just because they license content doesn’t mean people will go to see it,” he asserted.

Twitter obviously has a different spin, seeing live-streaming video as a strong adjunct to the real-time nature of Twitter. “In the past, the conversation has happened on a separate screen from the event itself. What we’re doing now through live-streaming video, both in Twitter and Periscope, is bringing the event and the conversation together on a single surface,” Twitter wrote in its Q 1 2016 letter to shareholders (pdf) last April.

Meanwhile, the company has continued to expand its partnerships, announcing deals with 120 Sports, Campus Insiders, Major League Baseball, the National Basketball Association, the National Hockey League and the Pac-12 Networks, in addition to the other previously announced partnerships.

Still an experiment
Twitter admits these are early days and it’s still tinkering with the best ways to deliver the live streaming content. In fact, in June it purchased Magic Pony, a startup that uses machine learning and visual processing technology to improve image delivery, especially on mobile. Twitter is hoping it can incorporate the technology into its streaming system to help deliver higher-quality streaming video at lower bandwidth, and in the process, improve the mobile viewing experience. This is particularly important because Twitter sees cord cutters and people on the go as prime candidates to access this new streaming content.

One of Twitter’s early streaming partners, CBSN decided to experiment with simultaneous streaming of the Democrat and Republican conventions on its site and Twitter. Christy Tanner, SVP and GM of CBS News Digital says the results were quite good with the network reporting a record 13.85 million streams during the two conventions. Although she didn’t break out the numbers, she did say broadcasting in both places resulted in a larger audience. “We did not see cannibalization by simultaneously streaming on Twitter and we were happy to reach a wider audience to create a deeper connection between our coverage and the voice of the audience,” she said.

Unfortunately, beyond that nobody is really talking about how Twitter plans to measure the success of the new content. “How do you judge the success [of live streaming] for Twitter. You can’t unless you have analytics they provide and if they don’t, we’re just left scratching our heads,” says analyst Rayburn.

Regardless, for Twitter, this is clearly part of a larger plan to solve the entrenched audience growth problem that has dogged the company for some time. In the process, it hopes to transform the business and revenue via advertising, but streaming live content alone is no guarantee of financial success, and only time will tell if the strategy is sound or not.