In 2020, the over-the-top (OTT) landscape shifted greatly, ushering in a new era for subscription-based OTT video streaming services. New players like HBO Max, Disney+, and Peacock joined the scene. All the while, service providers like Netflix, Hulu, and Amazon Prime Video continued to dominate the market.
So, what is next? OTT services are predicted to generate just over $158 billion in ad revenue by 2024.
As OTT experiences these major growths and investments, it brings about some key advertising questions – What are the best practices for selling advertising in this emerging channel? Which channels have the best measurement? How is OTT different from linear TV? And, more. With that, MediaRadar hosted a virtual panel to explore these recent and upcoming changes in OTT, plus what the future holds for this type of advertising.
Los Angeles Times reporter Wendy Lee moderated the discussion.And panelists included Bill Condon of Xumo, Justin Gutschmidt of Premion, and Matt Graham of Acorn TV, as well as myself. Here is a recap of some of the key insights discussed.
Ad innovation
While TV advertising has been largely the same for decades, OTT platforms are changing the game, offering new ways for advertisers to get their messages across. Hulu, for example, has a choose‐your‐own‐adventure‐type ad option, allowing viewers to select which of multiple ad options they would like to watch. Hulu also uses interstitial and binge ad options, a format where viewers can watch all their ads at once so they don’t have to be interrupted later.
After a lifetime of seeing TV ads presented in one way, these new, more creative ad options feel refreshing. They also help keep audiences engaged. With more of a change in what they’re watching, most people are much less likely to get bored. In fact, Hulu claims that the options provided by their platform lead to a 150% increase in brand recall.
Targeting
OTT advertising offers many advantages to brands looking to get more for their money, as well as more views, more click‐throughs, and more sales, and provides opportunities to get a message in front of the right people at the right time. Leveraging the audience data that OTT channels provide, advertisers are able to produce highly targeted campaigns. They can segment audiences based on geographic location, demographics, preferred content, and much more. Advertisers can also capture impression data for guiding future ad buys.
By narrowing down an ad’s audience to include only those to whom it is relevant and applicable, brands drive awareness. They also save money by not showing ads to obvious dead ends. Audiences also appreciate not being shown ads that don’t apply to them.
Consolidation
As OTT content becomes more popular, the industry is starting to consolidate. For example, Xumo was acquired by Comcast in February 2020. According to Bill Condon of Xumo, being tied to a larger company has boded well for them.
“Right before the pandemic hit, we were doing well. But, being tied to a larger company has been really beneficial. I’d say there’s four key areas in terms of what has been helpful to Xumo,” Condon explained.
Condon shared that distribution, discoverability, content, and data were four primary benefits of the merger for Xumo. With Comcast’s help, Xumo now reaches a wider audience and is easier for potential audience members to find. It has also seen a large increase in the content acquisition budget, and has access to more data and data processing tools. Other companies are likely to undergo similar merges and find similar benefits, moving forward.
The number of unique OTT providers will likely decrease, now that all of the major players have introduced their OTT platforms. The average OTT consumer is willing to pay for about 3.2 platforms. Past this threshold, they are willing to accept ad-supported OTT, which major leaders already offer (i.e. Peacock and HBO Max starting next year).
What’s Next?
At MediaRadar we track what happens to our customers and, out of those 2,400 customers we track, there was more M&A activity last quarter than any single quarter in our ten years of doing this. As for the number of OTT platforms, this consolidation is a strong sign that the industry is maturing. As the platforms band together for various benefits, we will soon learn what else they can offer.
With many big name players already on the scene, the future of OTT advertising will be interesting. As advertisers continue to capitalize on the benefits of OTT, it is only a matter of time before we begin seeing even more of its potential and profitability play out.
When you’re launching a new brand amidst multiple global crises, it helps to hone your focus and target audience. That’s part of the thinking behind NowThis Earth. The new channel from Group Nine Media’s mobile-first news publisher NowThis will address the impact of human actions on the Earth’s climate.
NowThis Earth launched in partnership with a coalition of climate-focused non-profits, research organizations, and NGO’s. The new channel will offer daily coverage of science-based coverage of the changing climate, as well as stories that focus on sustainable living. According to NowThis President Athan Stephanopoulos, climate change is a topic around which the NowThis audience is already highly engaged.
Mobilizing the brand
That’s one way in which NowThis differs from some legacy publishers. Many have struggled to find a way to cover climate change comprehensively. They cite limited consumer appetite for science-based coverage and the risk of fatigue with the sometimes-dire stakes of the issue. Attitudes toward and interest in the issue has started to shift among the public at large. However, Stephanopoulos is confident that NowThis’ young audience, primarily composed of Millennials and Generation Z, is more than ready for a sharper editorial focus on the issue many see as the defining challenge of their age.
“When we’ve covered issues of climate and sustainability in the past we’ve seen those stories over-index in terms of engagement, particularly with our younger audience,” says Stephanopoulos. In fact, NowThis viewers are five times more likely to engage with climate and sustainability content than with any other topic. This engagement has produced a reported 600 million views across NowThis’ existing news and politics channels. Clearly, its native audience is ready to see the topic take center stage.
Audience engagement
Of course, even with signs of growing consumer interest, launching a new mobile-first news channel in a crowded ecosystem presents challenges. That’s why NowThis is leveraging some of its existing assets to give the new brand a boost. NowThis Earth will take over the channel previously occupied by NowThis Future, a science and technology vertical that was one of NowThis’ most frequent homes for sustainability-driven content. Taking over an existing channel with a built-in audience will give Earth a leg up as it aims to break into an increasingly competitive mobile video market. NowThis can seamlessly connect new brand’s content directly with the segment of the audience most primed to receive it.
The channel also enjoyed a boost from science educator, climate activist, and occasional NowThis collaborator Bill Nye. He gave the launch a boost with the introduction of a live climate tracker. The new channel is open to partnerships with relevant voices in the climate conversation. However, Stephanoulos stays that bringing Nye into the launch has more to do with foregrounding future collaborations with the brand than a concerted influencer strategy for the channel. “It was mostly about the fact that we’ve done work with Bill in the past. And we’re talking about things we can do with him now under the NowThis Earth umbrella.”
Strategic partnerships
The new channel will also leverage an array of non-profit partnerships that will play a key role in informing its editorial coverage and helping it to connect with new audiences. NowThis has teamed with the Global Commons Alliance, a coalition of climate-focused organizations including research, business, and philanthropy. According to Stephanopoulos, the partnership will help NowThis Earth to identify stories on the frontlines of climate coverage. IT will also provide access experts who can provide additional context. GCA member organizations will also contribute local reporting from journalists and NGO employees involved in conservation efforts around the world.
The Global Commons Alliance will also help support the new channel through funding that will allow it to remain, at least initially, ad-free. In the near-term, the focus for Stephanopoulos and his team is on building an editorial brand that can motivate its viewers to take the kind of actions that help to address the global climate crisis. This could be by donating to preferred causes, following tips for more sustainable living, or engaging in activism.
NowThis has successfully partnered with commercial brands in the past. However, Stephanopolous thinks it’s important to avoid any potential conflicts at launch. He remains optimistic about the long-term potential of traditional advertisers to support sustainability-driven content both on NowThis Earth at large.
“We’ve seen a lot of brands and advertisers who want to be in this space, particularly content around sustainability,” says Stephanopoulos. “There are a number of companies that are driving themselves to be more sustainable as brands. I believe there will be even more opportunities in the future.”
Lessons to repeat
For publishers looking to launch a new video brand into today’s highly competitive market, there are some valuable lessons in the NowThis approach. NowThis Earth isn’t so much a new vertical, as a distillation of coverage that was previously spread across multiple channels in the NowThis portfolio.
With close attention to user engagement, the NowThis team was able to identify an area of opportunity that it was already well-positioned to develop based on its existing network of partners and to grow based on its established cross-channel audiences. The topic is timely, but as Stephanopoulos pointed out, NowThis has been nurturing this audience across several of its brands for years already.
In a world turned upside down, TV – in all its current forms – serves as a vital anchor. It is a trusted provider of news and information, as well as a continual source of entertainment and comfort. It unifies families and friends through shared viewing experiences – even when they are in different locations. And it facilitates new routines, which helps people through these testing times.
TV consumption has spiked, with a Thinkbox.tv weekly viewing report from May 2020 revealing UK viewing is up 21% year-on-year. Even as the country begins to return to a socially distanced version of normal, staying home will be the default position for many. And this will prolong consumers’ reliance on TV.
This trend is positive for advertisers. This is particularly true as 54% of consumers are paying as much or more attention to ads than they were before lockdown began, according to a recent FreeWheel survey. But to make the most of these larger audiences, advertisers need to understand the changing habits, preferences, and expectations of consumers. This will allow them to make informed decisions around messaging, tone, and delivery channel.
Match the messaging to the moment
Ad messaging needs to relate to what is happening during current times, to be contextually relevant and to resonate with consumers.
Our survey revealed that the vast majority of UK consumers want advertising to be relevant. Three quarters of respondents feel that brands should acknowledge the present situation in their ads. Ads can be used to reinforce preventative measures such as social distancing and hand washing. They can also show customers that brands are there to help them with lockdown related challenges.
From Nationwide to NatWest, financial services businesses are recognizing the current situation in their advertising. They are reinforcing their support for customers and outlining how they can still access services from home. Supermarkets have also brought the current context into their messaging, such as the Co-op’s campaign to support food redistribution charity FareShare.
Set the right tone for the vertical
Just because consumers want ads to relate to the current situation in some way, that doesn’t mean messaging needs to be sad or negative. In fact, humor should play a central role in advertising. True to form – the majority of Brits (58%) say they want to see ads that make them laugh. Many brands have taken a fun and light-hearted approach to messaging such as Maltesers with its “Look on the light side” campaign and Hotels.com with its humorous “Just stay home”’ messaging.
Setting the right tone often depends on the vertical in which a brand operates. Despite ongoing uncertainty, a quarter of consumers want to see TV ads relating to travel. They also want emotive ads that make them dream, providing beacons of positivity in challenging times. Just because viewers can’t go to their dream destination right now doesn’t mean travel brands shouldn’t maintain awareness and advertisements.
Online search data reveals that millions of travelers are in escapism mode, discovering and dreaming of life without restrictions. So, reaching out to these consumers now can make all the difference in the medium to long-term. Sandals Resorts is one travel brand continuing to spend on TV ads. They acknowledge the reality of the current situation, but remind viewers that their holiday havens are ready and waiting.
Choose the right delivery channels
The term “TV” now encompasses a wide range of delivery channels. These include traditional linear TV, broadcaster video-on-demand (BVOD), and subscription streaming services. Much media attention is currently given to the rise of video streaming. However, FreeWheel’s survey found that linear TV is still the most watched type of platform, with 34% of consumers selecting this as their first choice compared with 26% for paid streaming services and 14% for catch-up TV.
In the current climate, audiences rely on broadcast TV for important updates, with over 27 million viewers watching the Prime Minister’s “road map to recovery” announcement on Sunday 10th May 2020 and almost 13 million viewers watching the Queen’s VE day address. Primetime remains a significant moment for people to connect with others. In France, primetime audiences broke the all-time viewers record on Monday 13th April 2020: 36.7 million watched French President Emmanuel Macron’s speech, on TV and online. That represents a 94.4% market share according to Mediamétrie.
Advertisers can make use of multiple channels to reach consumers when they are fully engaged in TV content. And they can use different platforms to reach different audiences or demographics. As TV content across all channels becomes more addressable, advertisers will be able to target audience segments defined by specific criteria, regardless of the platform they are using or the content they are watching.
Tune in
In these unprecedented times, consumers are turning to TV – in all its forms – for information, entertainment, and routine. And they want to hear from brands; only 8% say that it should be a priority for brands to stop advertising. Armed with important consumer insights, brands can make use of a boom in media consumption to reach and engage TV audiences with useful, appropriate and contextually relevant messaging. Media and brands have an important role to play, they have demonstrated that they can be agile, reinvent themselves and be creative. In future, companies that listen to viewers are more likely to better match viewers’ user journey, expectations, and needs.
As the world adjusts to the “new normal” of remote working life, forward-thinking publishers have been coming up with new ways to connect with their audiences and help them through the crisis. In a matter of weeks, Harvard Business Review has spun up its own live video offering: HBR Quarantined.
HBR’s new weekly LinkedIn Live show focuses on how businesses are coping with the consequences of coronavirus. The show, co-hosted by Editor in Chief Adi Ignatius and Chief Product and Innovation Officer Joshua Macht, debuted on April 27 with Pulitzer Prize-winning columnist Thomas Friedman as a special guest.
Ignatius, Macht and HBR’s Senior Multimedia Editor Scott LaPierre talked to DCN about what prompted the launch, how the first show went, and where they plan to take it in the future.
Evolving an idea
The initial concept for HBR Quarantined stemmed from Ignatius and Macht wanting to explore their dynamic in different formats. “Adi and I go way back together. We’ve grown accustomed to taking chances together and inventing things,” Macht said, explaining that a podcast was initially on the table. “Within weeks we went from, ‘Maybe we should launch a podcast,’ to ‘We’re going to do a live television show on a platform that’s pretty new.’ Then, all of a sudden, we had a show.”
Ignatius said that the genesis of the idea came from a desire to connect with the millions of their audience who are now working from home. “They, like us, are wondering, ‘When do we get to go back to work, and what will work look like when we do?’” he explained. “We’re always talking about these issues. So we figured we could do a service delivering insight on COVID-19 and how it affects businesses and the economy.”
But unlike other HBR products, the show is designed to have a very different tone. “Harvard Business Review tends to be a brand that speaks to a very high altitude. That’s our secret sauce: high-level pieces that are based on research,” Ignatius emphasized.
“This show is something different. It’s meant to be warmer, really connecting in the moment. We’re all in the same boat and trying to figure this out together. So, it’s certainly an experimentation with a different kind of voice for us.”
Viability in quarantine
Under normal circumstances, a product like this would be resource-intensive. But LaPierre highlighted that quarantine has actually lowered the bar for everyone in terms of production values and expectations.
“The way a lot of video producers are seeing the COVID-19 crisis, perversely, is as an opportunity to try new things,” he said. “HBR is not a TV station. We only have a small video team. So it would be hard for us to launch a true broadcast live video series. But now, everyone’s been equalized in terms of what they’re capable of doing. It’s a chance for us to make a viable series that doesn’t look that different from what others are doing.”
LinkedIn’s Live tool is just over a year old, and the platform was relatively late to the video space compared to its competitors. But for HBR, their vast social following on LinkedIn – 10.2 million followers – made it an obvious choice to debut this type of show.
The team began by testing out a high-level broadcast tool. However, that was proving problematic as it wasn’t suited to their purposes. “We pivoted to something called StreamYard, which is a ‘prosumer’ grade software that allows you to stream live, but is a lot more lightweight,” explained LaPierre.
Live streaming can be risky in terms of technical hitches. But HBR’s first show went smoothly, attracting 35,000 live viewers and thousands of comments during the stream. Ignatius highlighted the long-tail benefits of the video as well, with total views doubling in just a few days.
The biggest surprise for the team was the lack of drop-offs. “Everyone was saying we would have these spikes in viewers. But actually, people showed up for the whole thing, and it just kept growing,” Macht explained.
HBR Quarantined post-quarantine
When it comes to the future of HBR Quarantined, the team is remaining flexible. They have a total of six episodes planned so far. However, they will be constantly reviewing what the response is to them and what their audience needs going forward.
“I was pleasantly surprised that it went off as well as it did. But it will be interesting to see where it goes,” commented Ignatius. “I think there is something of a service that we can provide for our readers. There’s knowledge and insight about what’s going on, and we want to see what that means post-quarantine.”
HBR is also scouting out potential sponsors. They believe the show offers a timely opportunity for advertisers to reach their audience with messaging related to the moment. “There is not a lot of sponsorship money out there these day. And part of our experiment was to find a new medium that was of the moment,” explained Ignatius.
But sponsorship aside, future episodes will be focused on trying to engage people with the brand, and with the wider goals of bringing people into HBR’s subscription funnel. “The show is good for getting people to engage with our brand, and we want to continue to grow the number of people visiting the site,” Macht concluded.
These
days, the new normal involves a whole lot of not going anywhere, and it’s a situation
that’s wreaked havoc on businesses of all kinds. Yes, that includes streaming
programming, too, particularly those of the scripted variety. While viewers
abound, production shutdowns have placed the future of many programs on
uncertain footing. Some shows have decided that they can –and will – go on, COVID-19
be damned. However, the inability to film within a standard studio environment
has necessitated some serious outside-the-box thinking and a whole lot of
making the most of what one has at hand.
For Complex Networks, this sort of thing is old hat. Some of their most successful series to date have emerged as a result of being scrappy in the face of budgetary and situational constraints.
Wings and chill
Take
Hot Ones as one tasty example. It all started when Chris Schoenberger, GM
of Complex Networks’ First We Feast, and host Sean Evans were setting up to interview
a guest. After spying some hot sauce in the company kitchen, they came up with
the idea of interviewing people while serving them hot wings.
“I
think the wings have probably improved in quality since the first time around,”
says Justin Killion, laughing. “And the sauce has certainly improved!
But it came out of being as opportunistic as possible, given the limited
resources that the company had at the time.”
If anyone would know, it’s Killion. He’s GM of Complex Networks and EVP of Operations and Content, and he knows everything there is to know about Complex programming. As such, when he suggests that a few semi-new series in Complex’s programming lineup have the potential to be an heir apparent to Hot Ones, you may want to add them to your “what to watch” list.
Fun and franchises
“If
you’re talking about new franchises, Tacos Con Todo, which First We
Feast just put out, that show is excellent, and we also did another one called Gochi
Gang,” said Killion. “I think both of those are franchises that you’re going
to see us double-down on and potentially do more of. But if you want to talk
about a breakout show, Full Size Run is right on the cusp. It’s a little
bit of an in-the-weeds sneaker show, for true sneakerheads. But it’s edited in
a fashion not that dissimilar to what you see on Adult Swim. I’ve never really
seen anything quite like it. I really don’t think there is anything
quite like it!”
Killion
knows all too well how much of a whirlwind the business of streaming entertainment
has become in the face of the Coronavirus outbreak – and how much of a boost everyone’s
numbers have gotten with people being stuck inside.
“Truth
be told, we’re up 35 percent in engagement on our YouTube shows over the last
two, two-and-a-half weeks,” said Killion. “That’s just incredible. Our dot.com
is up over 20 percent. Our social is up significantly. We’ve seen a massive
spike in Tik Tok. We’re doing about five times the daily views that we were doing
prior to the quarantine.”
Thirst and lemonade
Looking
at these numbers is one of the few ways to make lemonade out of the lemons
everyone’s being handed lately. (And by “lemons,” of course, we mean “stay-at-home
orders.”) But the public’s thirst for entertainment has also resulted in a
certain degree of forgiveness from the viewership, which puts Complex in a
position to try some things that they might never have risked doing before.
“The
quality of the content still needs to be there. But we’re at a moment in time
where no one’s getting dragged for putting out content that isn’t exactly up to
their usual standards of polish,” said Killion. “That allows us to take chances
that we otherwise wouldn’t be able to take. So, there’s been a lot of experimentation.”
Case
and point: Life at Complex. In the pre-coronavirus world, the series
involved host Tony Mui wandering around the Complex offices, interviewing staff
members. Killion describes the show as “a look-how-cool-it-is-to-work-here kind
of thing.” However, when everyone is suddenly working at home, you’re looking
at some retooling.
Sole-ful solutions
“What
Tony’s turned the show into is almost like an incubator each week for a
different format that we’re gonna try,” explained Killion. “One episode is him
checking in with all of [Complex’s] different deputy editors… Just kind of getting
a sense of what their home life is like in general and getting to know them a
little. Then, he did something called ‘Sneaker Battles,’ where he took Brendan
Dunne, our host of Full Size Run, and paired him with someone from our
editing team. They were comparing sneakers from their own personal closet, and
had it judged by one of our directors of photography from Sneaker Shopping.”
Killion
says that it’s a fun format that they were able to quickly pull together.
However, he points out that, if they’d been producing the show prior to their
current ad-hoc situation, “the level of polish on it would have to be
significantly higher. We would’ve been shooting with a crew at four different
locations to make that happen. Instead, it’s just turning on a computer monitor
at four different locations!”
We’ve
just returned from our annual summit where a couple hundred senior
executives gather in a closed-door meeting to discuss the most pressing
issues and exciting opportunities that we, as an industry, have before
us. It was my sixth year of having the honor of setting the table to
open the executive summit, after more than a dozen years listening from
the audience.
Everyone in the room is a premium publisher – with the exception of
a handful of supporting sponsors, speakers, and invited guests. The
attendees at the DCN Next: Summit are among the most knowledgeable
people in the business of digital media anywhere. It is a daunting task
to capture the proper sentiment for the direction of our industry at a
gathering of such key leaders. That said, here are the main points from
my kickoff remarks this year.
This new year also marks the start of a new decade, 2020.
2020.
Yes, perfect vision. Optimal focus. As we begin this decade, I believe
that DCN’s members are uniquely positioned. As a group focused on
creating premium content experiences, we have never lost sight of the
importance of our audiences. We’ve remained steadfast in their trust and
our direct relationships.
I see three key facets to this 2020 vision:
First,
we find ourselves rightly renewing our resolution to put the
expectations of our audiences first. To meet, to exceed, their
expectations. To be their trusted ally.
Second, we’ve defeated the myth content has to
be free and finally defined what it means to be premium. It simply
means to have real value worth paying for whether by distributors or
consumers.
Third,
given too many years of platform dominance – in which they have
indiscriminately hidden the real costs to their services and vacuumed up
as much consumer data as possible while, at times abusing trust – we
find ourselves in the best position to align with new user expectations.
To believe that data is the lifeblood of the Internet is to look past
the trust and audience expectations which underpin it now, and in the
future.
Audience first
Unlike
some of those who seek to cravenly capitalize on consumer attention
merely to collect data and target ads, we celebrate an unwavering focus
on the wants, needs, and expectations of our audiences. The experience
across platforms can be rich and elegant. But even more importantly,
digital allows us to use multimedia to tell stories in ever more
engaging ways, better informing the public – something that has never
been more important.
In this case bringing it altogether, I’d like to point to the brilliant Wall Street Journal report
on Google’s ad tech business. It informed a public conversation and
made its way not just across the industry but into meetings of
regulators investigating Google – this is true impact in journalism.
Storytelling at its best
As
technology enables us to better tell our stories, it also becomes more
deeply embedded and entwined with every aspect of our audiences’ lives. The New York Times 1619 Project
was one amazing example featured at a DCN Storytelling Member Day. It
not only brilliantly told the story; it reexamined the legacy of slavery
and made its way into other media – not just audio and video but it
also found its rightful place in classrooms and libraries as educational
material – this is true impact in journalism.
Revenue revived
The past couple of years have been particularly promising around subscription-based and other Direct-to-consumer (DTC) models. While ad vendors chase “DTC”, the latest acronym in their alphabet soup, DCN’s members have always focused on direct, trusted relationships with their audiences.
While concerns have loomed around subscription fatigue, recent DCN research
found the opposite. In fact, consumers aren’t even aware how much they
are spending on subscription products. (DCN’s research shows an average
of $54 per month across 4.3 products). So, it’s clear there’s room for
more! And we now see that younger audiences who grew up in digital are
willing to pay for satisfying experiences. The DCN research backs this
up showing that they see value well beyond their cost.
As
we build our subscription-based offerings, and optimize ad experiences
across platforms, we must keep these audience experiences top of mind.
We serve neither our audiences, nor advertising partners, if we do any
less.
Video views
Our
members – and the industry as a whole – are seeing a hearty appetite
for audio and video content. We see robust revenue around licensing of
our content and IP, which also allows us to impact ever widening
audiences. This is backed up by a renewed effort to preserve copyright
over their art, notably including last year in the EU.
We are also seeing true diversification in our busiess models.
Where
desktop display eroded over the past years, mobile display has offset
it. And other forms of advertising including native, sponsored content
and leads have helped drive growth. Video advertising, where inventory
can be created, continues to carry the highest price and growth in
advertising. And arguably the most important growth of all, we’re
seeing direct audience revenues grow more than 20% per year where
content companies are being paid directly for their content recognizing
its premium value.
UBS
estimates that a combination of 16 media firms will spend $100 billion
to produce content in 2020. In fact, it has been predicted that more
than $35 billion will be spent on streaming video content alone. And
with over 60 media companies among the DCN membership, we know that the
total investment will be much higher. And rightly so. Hulu has been
investing in premium content for its streaming video platform. So is CBS
All Access. Disney+ launched in the last few months with an absolutely gorgeous experience. Peacock will launch in April and then HBO MAX a month later. And those are only a few examples.
Engaging experiences
While
we continue to monitor the power of platforms, their own investment in
content demonstrates that information and entertainment are the
lifeblood of social experiences online. And now the platforms are
starting to pay for it. No
DCN member is surprised that film, television, news, sports and other
topics engage audiences and ignite conversation, debate, and discussion
across platforms.
Be
it delivered on the big screen, small screens, smart speakers, or the
myriad delivery channels in the digital content ecosystem, the work our
members do forms a nexus of cultural impact. We have reached new heights
of digital storytelling. And, undoubtedly our craft, the art of
storytelling, will continue to surprise and delight as its evolution
continues in the decade to come.
And,
while we face challenges like broad-swath and blunt keyword
blacklisting masquerading as “brand safety” and the ease of data-driven
scale, we also see signs that marketers too are shifting their focus to
quality contexts and making genuine customer connections.
Yes,
it is “easier” to pull a series of data-driven levers and reach
purportedly targeted audiences with generic messaging. However, as a
growing number of consumers opt out of advertising and intro tracking
prevention, savvy marketers too are reviving the art of storytelling.
They have a renewed understanding of the power of delivering compelling
messages in trusted, engaging, inspiring environments and an
appreciation for the cost to their brand when it’s associated with
experiences that abuse customers’ expectations. They see that being part
of exceptional experiences creates the kind of cultural resonance and
relevance that a click cannot compare to.
Data diligence
Don’t
get me wrong. Certainly, data is a powerful tool for understanding
audiences. It is also critical for storytelling and we see it leveraged
in stunning executions to create vivid narratives built on numbers.
But
user expectations around data collection and use are of critical
concern. With increasing consumer awareness around data practices online
and looming enforcement when they’re abused, we must continue to focus
in on what’s best for our audiences and only then for our marketing
partners. The ability to micro-target, to force an action with a digital
ad is not the same as engaging audiences around trusted content. It is not the way to build long-term customer relationships.
Fans and friction
It
up to us to keep our customer focus razor sharp as we embark on this
2020 vision. We need to minimize complexity and reduce friction while
continuing to innovate and enhance experiences for our audiences.
Certainly, challenges abound including news deserts impacting local
communities, anti-press rhetoric from none other than our own President which sends dangerous signals globally, and continued platform competition and unequitable marketplace control now under investigation by Congress, FTC, DOJ, states, the EU among others.
I’m feeling good this year about where things are headed. I’m feeling really good. And I’m thrilled at the programming lineup we assembled for our annual summit to talk about it.
What
I’ve seen in my time in digital, particularly the years I’ve been
fortunate enough to spend on the team at DCN, has taught me is that we
are at the forefront of something great here. We are on the frontlines
of storytelling and communication. We have the power to shape minds, to
touch hearts, to fill the world with laughter and tears. Here’s to 2020
bringing the roar of the crowd as we focus on what matters most: the
audiences we serve.
At
the dawn of the new decade of 2020, DCN members gathered at the Mandarin
Oriental Miami January 16 and 17 to network, discuss victories and challenges
as media companies evolve, and explore industry predictions.
The
new decade calls for a perfect ‘20/20’ vision, said Jason Kint, CEO, Digital
Content Next as he kicked off the closed-door, off-the-record gathering. That
encompasses continued focus on audience desires, pushback against the myth that
all content has to be free, and the elevation of trust and transparency in an
era marked by ‘fake news’.
The European
Union’s recently enacted copyright law is a win for the industry, with similar
discussions expected this year in the U.S, noted Kint. Federal and state
investigations as well as emerging regulations are all good signals toward protecting
consumer privacy, regulating data use and anti-trust concerns, notes Kint.
We
can also expect a steady rise in content investments. UBS estimates that in
2020, a combined 16 media firms will spend $100 billion to produce content.
More than $35 billion will allocated on streaming video content, as new players
such as Disney Plus and NBC’s Peacock emerge.
“I’m
feeling really good this year about where things are headed,” said Kint.
Platforms
and policy
Jim Bankoff, CEO, Vox Media said he valued being at the DCN Summit. He described it as a place where premium publishers come together to “find ways to partner and to check our healthy, competitive impulses … and figure out ways to work together” in the wake of ceding ground to third party big tech platform and ad network “that have proven time and again not to have our best interests in mind.”
Investigative journalist Carole Cadwalladr
Investigative
journalist Carole Cadwalladr, who freelances for the Guardian and Observer,
captivated the audience by recounting her experiences unearthing the activities
of Cambridge Analytica and Facebook. She was nominated for a Pulitzer Prize for
her work, which sparked international investigations as well as inspiring the
Netflix documentary, ‘The Great Hack’.
“This
was my introduction to this world of creepy disinformation, but also complete
reluctance from the platforms to even acknowledge the problem, let alone deal
with it,” she noted. She was instead subjected to legal pushback from Google
and Facebook as well as online bullying.
She
also called for media companies to not compete against each other. Instead, she
encouraged those in the room to join together to “compete against lies and
falsehoods. We’ve seen it in Britain and you’re next,” said Cadwalladr.
Monopolies
Scott
Galloway, professor, NYU Stern School of Business, said
he believes that the big tech companies on the antitrust radar should be
broken up. Monopolies kill economic growth and are a “key step to tyranny,” he
contended, adding a co-opted government can’t serve as a dominating force for
protection.
Galloway
pointed out that efforts to regulate the behavior of big tech fines have been
largely ineffectual. To date, the fines haven’t been punitive enough to
dissuade the big tech companies to modify behavior, he said. He also criticized
the federal government for being slow to act.
Money
matters
Monetization and concerns about subscription fatigue were recurring themes at the summit. Yet DCN research shows that younger audiences in particular appreciate the value of a subscription and finds that there is still consumer appetite for subscription products.
Jonah Peretti, founder and CEO of Buzzfeed
Jonah
Peretti, founder and CEO, Buzzfeed noted that over the course of a few short
years, the company has begun to generate significant revenue from Facebook,
Google, Amazon, and Netflix from licensing.
“I
don’t think Facebook or Google wants to buy news companies,” said Peretti. Of
the platforms movement toward paying for content, he said that “They get the
benefit of sharing some of the costs of the production of that content. News is
a great way to direct repeat visitors and to build trust in the platform to
avoid some of the problems of misinformation.”
Media
shifts
Kevin
Turpin II, president, National Journal, noted his longstanding publication adapted
to the changing media landscape by transforming itself from a media company to government
research and consulting services company for which subscribers are willing to
pay premium prices.
Jim
VandeHei, co-founder and CEO, Axios; Executive Producer, AXIOS on HBO said, “you
have to deliver content in a way that I would deliver in a conversation with
you over a drink, like what is new.” However, to create value, “Tell me why it
matters. Give me some context. Give me the power to go deeper.”
For
Complex, the path to success hasn’t been simple. Rich Antoniello, CEO and founder,
Complex Networks said, “we call ourselves a brand that happens to monetize
through media.” He said his company shifted from an ad-dependent model in 2016,
ahead of the curve.
One
example is the wild success of its “Hot Ones” program. It features10 questions
of its celebrity guests that get progressively more personal along with the consumption
of hot sauce that gets progressively hotter. And the business model is based
not on advertising, but on the sales of high-margin hot sauce.
Antoniello
also outlined the success of ComplexCon, the company’s flagship event, which connects
cultural icons with fans who spend $100 to $700 for VIP tickets, with hundreds
of thousands sold. Fans also snap up merchandise from Complex and its app-based
vendors such as Nike and Adidas.
The
power of fandom arose again when Howard Mittman, CEO, Bleacher Report spoke of
how his company’s app and successful franchises attract sports fans. He
described how individual athletes hold more sway in their fandom habits than sports
franchises.
Nearly
10 million fans have signed up for alerts and the app accounts for half of the
company’s user engagement. Bleacher Report’s focus is not on breaking sports
news, but creating engagement on its own platforms, according to Mittman.
Her
story
Media
continues to go through cultural shifts toward diversity both in company
staffing and in targeting readership such as women. “Women are generally not
seeing themselves in media and advertising to the extent that they should be,”
said Catherine Levene, president, chief digital officer, Meredith National
Media Group.
“We
have been the first to support #SeeHer, a national organization committed to
accurate representation of women in media and advertising,” she said. She added
that’s not only good for supporting women, but also for the bottom line. Women
who see themselves in media and advertising are 45% more likely to recommend a product
to a friend and purchase it, said Levene.
Elise Loehnen, chief content officer, Goop
Despite
the controversy it has attracted by those who question the veracity of its
science, Gwyneth Paltrow’s Goop brand is growing, noted Elise Loehnen, chief
content officer. The platform embraces several media forms and covers topics
from relationships to health, including alternative therapies. She said that
the controversy has been good for keeping the brand at the forefront of popular
discussions.
“We’re
tired of being talked down to,” said Loehnen. “We’re a strong female brand
undisturbed by the chaos.”
Adapt
or die
Rishad
Tobaccowala, chief growth officer, Publicis Group,noted that the only
way to get ahead as a legacy company is to “kill your core. You have to rethink
your entire business.”
Levene from Meredith believes that the mobile world and 5G will create an even greater market for video. And, with 50% of searches conducted on the more than 200 million voice-enabled devices in U.S. homes, opportunities and challenges will arise.
Google’s
action to purge third-party cookies against the backdrop of GDPR and CCPA will
impact the entire digital ecosystem, Levene noted.
“Data
is going to be the currency of the future. Those who have it at scale and the
ability to drive a lot of insights from it are going to win,” she added.
Kindness
matters
In a social media environment that is being blamed for everything from decreasing personal contact to radicalizing disaffected youth and intensifying suicide rates among girls, Tatyana Mamut, head of product, Nextdoor, made the case that her platform is creating connections on a micro-level in a neighborhood at a time when people hardly know their neighbors
“I
believe that kindness is the next big thing in tech,” she added.
Palo
Alto journalism educator Esther Wojcicki made the case that helicopter
parenting has impacted the workforce and its ability to embrace risk and
innovation. She calls for parenting – and management – to embrace trust,
respect, independence, collaboration and kindness. She also promotes the idea
that every student should take a journalism course to build media literacy skills.
The
future will be fraught with change. And as Tobaccowala pointed out, “human
beings know how difficult change is.” But to survive, media companies must
continue to evolve.
“We
have the power to shape minds and hearts, to fill the world with laughter and
tears to inform the truth,” said Kint. “Here’s to 2020 bringing the roar of the
crowd as we focus on what matters most: the audiences we serve.”
It’s shaping up to be a defining year for the video
advertising landscape. Notably, 2019 was marked by the primacy of connected TV,
an embrace of the value of premium content adjacency, and a return of the good
old 30-second ad for brand storytelling.
We will reserve full judgement for our year-in-review report after the close of 2019. However, our Q3 report — based on video ads served from our asset management platform, AdBridge— reveals relatively stable trends this year in how marketers are using digital video to build business. This absence of wild swings indicates that the industry is settling into its new, CTV-based reality.
Perhaps what’s old is new again? And by this we mean that
maybe things we always believed to be true are still true but in new and better
ways.
Here are
some noteworthy video trends:
CTV Delivers the Big
Screen TV-like Experience But with Consumer Choice & Control
In Q3 2019, it happened. CTV became the majority destination
for impressions served, tallying in at 51%. Sure, this may fluctuate a bit
quarter to quarter based on the supply of inventory. But it’s striking to see
that figure relative to where we landed in 2018 at 38% of impressions being
served to connected TV destinations. The steady march in CTV share from Q1
(49%) to Q2 (50%) to Q3 (51%) leads us to believe this is a true, predictable
trend and not another shiny object phenomenon.
Premium Content
Adjacency Clearly Works for Brands
All three quarters of 2019 showed a strong embrace of
premium content destinations vs. media aggregators. In fact, the average mix in
2019 to-date is 81% premium/19% aggregators. This is certainly driven in part
by the rush to leverage CTV but there is also a solid increase in impressions
going to premium online content as well.
Spoiler alert: Direct-to-Consumer (DTC) brands really like
premium content as evidenced by the vertical specific data in that category. In
Q3, DTC brands delivered 93% of their impressions to premium inventory. But a preference
for aggregators is one way in which auto advertisers show markedly different
trends from the broader group. The 57% of impressions served to media
aggregators in Q3 is a 10 percent increase from the prior quarter and nearly
triple the overall rate.
Brands Need 30
Seconds to Grab Us by the Hearts and Minds
Brands need all shapes and sizes of ad formats to truly
navigate the consumer media landscape today. And while that portfolio will
surely include experimentation in the super short category (:06 ads for
example), we saw a move back to more :30’s in 2018 and 2019 after a move to go
shorter in years prior. For example, the share of :30’s served in 2015 was 41%.
That dipped to 38% in 2016 and hit an all-time low of 33% in
2017. In 2018, :30s jumped to 54% and in Q3 of this year, they accounted for
66% of ads served. Perhaps short stories can become too short to be effective
and a mix is what’s needed to affect consumer behavior today. This seems to be
especially true in the Auto and DTC verticals, which both showed an even larger
investment in longer ads. For auto, 30-second spots accounted for 84% while in
the DTC category they rose to a whopping 97% of impressions by length.
Our research, which has tracked video advertising trends quarterly for almost four years, finds that despite the innovative nature of the streaming wars, many video industry fundamentals still apply, or are back in style. Context matters, both in the sense that premium placements are popular and longer ad formats provide more in-depth messaging. The heating wars are heating up and its critical to keep a close eye on the emerging trends and opportunities in this market.
It’s a brand people have known and loved for four and a half
decades – as a magazine. Now People is focused on video, determined to
grow the brand and bring its content to new, and larger, audiences.
“The most important thing is that the brand has to have a
voice to begin with,” said Will Lee, SVP of Digital for the Entertainment Group
of Meredith Corp., a role he’s held for two years, which coincides with
Meredith’s acquisition of Time, Inc. “People has a very strong brand
voice that it’s cultivated over 45 years. We know what the consumer expects
from us. We have a very well-developed playbook for how the brand should sound
and look.”
People’s emotional DNA
That means sticking to the brand’s core emotional DNA when showing
work on Snapchat, for example. “We don’t say snarky, mean things about
celebrities. It’s not what we do.” So, even if Snap viewers prefer things a
little salty, People stays true to its own style, regardless of medium.
“We get a lot of data from Snapchat,” Lee said, “and that audience has evolved.
It’s very different from what it was three years ago.”
People’s video content focuses on what Lee called
“the three R’s, the content their readers just can’t get enough of: reality TV,
the British Royal family, and the red carpet. “Streaming is a different level
of engagement. The really passionate audience comes from reality TV.” So, Lee’s
team of 60 to 80 staffers produce a reality-based video show four nights a week
and a Royals show once a week. “Reality TV is a conversation starter,” said
Lee, of the genre’s powerful appeal.
Reality check
The numbers back him up. “We’ve done 100 episodes of ‘Reality
Check.’ And after four episodes, we already had the second most viewed show on
people.com, with 2 to 3 million views of show clips in a week. That is a pretty
good debut for us.”
Pivoting constantly is key and Lee knows how hard his team
works to keep up. “All the parts of video work closely together because we’re
constantly iterating product on a daily basis. It’s a very special kind of
producer who can do three or four formats and keep it all together.”
“What’s interesting about our model is that we’re not tied
to 26-week orders so we can adjust. We have a lot of flexibility which
differentiates us from cable. We can iterate and improve the product.”
Brand building
But, when deciding which next steps to take, “we have to be
very thoughtful, as a media brand with a history and the brand equity we’ve
built,” Lee added. “Where is the growth? How do we amplify the brand and move
into new markets?” Newer platforms like TikTok , he said, are “the solar power.
That’s where the future lies. We have a great brand, but that is no guarantee
of future growth.”
However, Lee feels confident that streaming is essential to
their success. “That’s why we’ve made such a big bet on it. If we’re not in
that space, we’re going to be left behind.”
Lee’s team also partners with Meredith Local Media Group , which has 17 TV stations across the country, which Meredith will leverage when it launches a new daily syndicated television show in September 2020. “That will be the centerpiece of our overall video product.” Lee acknowledged how ambitious this new product is: “Thirty minutes of daily broadcast level TV is a huge amount of work.” The magazine-style show, with “all new and original material really represents a pretty important next step for this iconic brand. It brings us more markets, and more audience. There aren’t a lot of media brands that will have this as part of their media ecosystem. In a company already producing print, digital and video, “this is going to be another evolution of how we all work together,” he said.
Entertaining audiences
When it comes to his other responsibility, Entertainment
Weekly, Lee says a new launch is imminent as well. “We’re really trying to
amplify the brand. We want to go to where the audience is, in local markets.
It’s important for us to reach those audiences.”
EW has announced that it will be working with Jeffrey Katzenberg’s short form mobile video platform Quibi, slated to launch in April 2020. The morning show, which will recap late-night TV, will take a similar strategic approach to the Lee he employs with People. However, he emphasizes that the brands are quite distinct, and that EW is “known as a cultural curator.” That should play well on Quibi, which offers a new audience that Lee is excited to reach.
OTT players and channels are changing faster than the seasons. The spring will bring a crop of new streaming entrants, joining an already crowded market. Still dominated by Netflix, a growing number of major players are drawing video viewers.
In the publishing industry, a remarkable level of transformation is happening by way of mergers that are driven, in part, by capacity to produce video. Recently, Vox Media and New York Media joined forces. This followed close on the heels of the recent tie ups of Group Nine Media and PopSugar along with Vice Media and Refinery29. An underlying theme is upping the production of quality video programming for seeking OTT platforms and rising streaming channels battling for subscribers. So, the question is: How will consumers be watching?
Get SmartTV
The answer is on a Smart TV—whether a Vizio with WatchFree powered by Pluto TV or an LG with LG Channels powered by Xumo—the CTV universe is made up of a growing number of streaming channels (or so-called FAST services). Now, major OTT platforms are following suit with Fire TV’s IMDb TV and Roku’s The Roku Channel.
In this dynamic, programming from media companies is produced in a seller’s market as FAST services look to differentiate with new and, if possible, exclusive content. The goal is to set themselves apart from aggregated CTV ad budgets. The result is that programming is starting to be distributed on 24/7 streaming channels (like the advent of cable news). The end game is to develop an audience that can be channeled to an owned and operated network/app.
Streaming channels that take form of the lean back TV world are also coming over-the-top via leading cable/MVPD companies. For example, Spectrum recently released a skinny bundle that allows viewers to choose what they actually want to watch. And that’s for approximately the same price as an SVOD service like Netflix. The skinny bundle is trending.
Netflix vs. niche
So, here we are. We find ourselves at an interesting intersection of an on-demand world (with active content discovery and viewing) and a programmed channel world with passive watching of round-the-clock streaming content. The king of OTT and SVOD, Netflix, is ad-free. It also set a high bar with premium content licensing and quality original shows as it outspends the competition.
However, we see an emerging universe fueled by
advertising/AVOD and channels that run 24/7 content of essentially any genre of
choice as an expanding orbit of media publishers become producers of OTT
programming. On the sidelines, streaming
sports and leagues are expanding their own OTT plus channels. This delivers
their content straight to fans or through digital upstarts that make sports the
core of their offerings, like Fubo and DAZN.
The best of the bunch
The pendulum is going to swing in a direction that improves the TV experience the most. At the heart of it all is content discovery and recommendation. The next show you’re going to watch is still the biggest unknown. According to the State of Viewing and Streaming study released by Horowitz Research last year, just over one-third (36%) of viewers consider personalized recommendation algorithms helpful in discovering shows. Whereas TV ads, word-of-mouth, and social media are attributed with 35%, 34% and 26%, respectively in frequency of new discovery. The better the content recommendation, the more that will be watched on-demand.
From there, the more
“connected” your TV experience, the more it will look like a digital network
versus a TV network. It will become a more social and shareable experience. The
advertising that puts the A in AVOD will increase in value as it becomes more
data driven complying with user privacy and better in targeting viewers. The
better the social integration, the more that will be watched on constant programmed
channels.
The lessons have been learned
by media companies is that they must maintain their own brand and operated
environments in the world of platforms. However, they must continue to
experiment with publishing channels to direct audiences and own distribution (and
monetization). In the grand experiment of OTT programming, content is being
produced and distributed in 24/7 streams to start up on platforms that garner
the greatest audience for the brand. The future of OTT is here, flipping your
favorite channel.
As children’s digital content consumption has come under the microscope and parents are realizing the extent to which popular online video services fall short of their expectations, federal regulators have voted to take away some of the guarantees protecting traditional sources of educational media. At the same time, others are calling on the Senate to leverage COPPA to reign in platforms’ approach to digital video and to enact new legislation to better keep pace with the rapidly evolving digital video marketplace. Clearly, the industry is at a crossroads and children are increasingly dodging traffic in the form of data collection, ad targeting, and unconscionable content—all of which would be unthinkable in the carefully moderated world of kids TV.
Unsurprisingly, YouTube is often found in the crosshairs when talking about objectionable digital experiences for kids. With issues stemming from lackluster privacy protections enabling extensive collection of childrens’ data to recommendations algorithms pitching inappropriate videos, the video social media network faces pressure from the Federal Trade Commission to turn around its platform. One idea from the company is to double down on its YouTube for Kids platform and effectively quarantine kids content from the rest of the site. However, to date, that approach has had some significant problems of its own.
Of course, it’s easy to see why parents like the service: It’s got tons of available content, it’s easy to find, and probably most appealing of all, the large majority of it is free.
Other services, from new market entries to the larger video services like Netflix, Hulu, and Amazon Prime Video (as well as upcoming competitors like Disney+), to traditional media networks have implemented features to better safeguard children. Companies like SuperAwesome are developing video platforms that take the risk out of kids content online for parents and advertisers. And Superawesome demonstrates the level of interest in this space, having raised $13 million in funding earlier this year, led by Harbert European Growth Capital. It was also ranked one of the U.K.’s fastest growing companies.
What’s changed
While YouTube holds great appeal and attracts massive audiences, it has yet to unseat one medium that has been guided by rules to protect children’s content for almost 30 years. That would be broadcast television. “It’s certainly the most powerful way to reach the biggest audience. You know, the demise of linear TV has been greatly exaggerated,” says Harold Chizick CEO of Chizcomm and Beacon, the largest media buyer in the children’s programming sector.
While the digital offerings from content companies are more robust than ever, and kids end up watching on more screens, Chizick says that there is a key difference: cowatching. Parents and kids are more able to catch content together when it’s on a larger screen where broadcast TV is usually found.
Additionally, the advertising industry has taken advantage of the dearth of younger eyes. And, in practice, kids end up not being able to avoid targeting technology that leverages collected personal information. That’s challenging as there additional protections for kids and their data under the Children’s Online Privacy Protection Act (COPPA) which advocates say the federal government is not doing enough to enforce.
Kid Vid
Although the online kids programming business doesn’t necessarily feel ready for prime time, the Federal Communication Commission voted this week to change the rules and regulations surrounding “Kid Vid” or the broadcast licensing requirements of children’s programming called. The changes were originally larger in scope when first proposed by Republican commissioner Mike O’Rielly last winter, in a vote of three to two among the commissioners, the FCC decided to enact an earlier start time for the programming (6 a.m. instead of 7 a.m.), removal of a mandatory 30 minute length for individual programs, and a reduction in reporting requirements for the broadcasters. Broadcasters will still need to air at least three hours a week of educational and informative content.
These changes make sense because broadcast stations need more flexibility to air other important content like local news and coverage of community events, as O’Rielly said in an op-ed at The Hill. As well, encroaching modernity has heralded the shift from linear TV to digital options meaning the burden of regulations falls only on part of the industry. “Notwithstanding this extensive competition in the video marketplace, local broadcasters are the only ones forced to operate under our Kid Vid rules,” he wrote.
In her dissenting opinion, Commissioner Jessica Rosenworcel said that she was concerned about the reliance on algorithmic recommendations for kids who watch content online. “This [proposal] follows on the heels of reports that automatic recommendation systems can present disturbing videos on the screen, one after the other. As a mother, I am not at ease when my kids before the computer and rely on algorithms to deliver their next video,” said Rosenworcel during arguments before the vote.
Modern regulation
Early on, the changes to Kid Vid had children’s programming advocates—and more recently a group of Senate Democrats—concerned. “The FCC’s assumption that children’s television guidelines are no longer necessary because programming is available on other platforms is simply wrong,” as three children’s television groups said in a fall 2018 filing to the FCC. “To obtain access to non-broadcast programming, households must have access to cable or broadband service, and be able to afford subscription fees and equipment. Many families, especially low-income families and families in rural areas, cannot access or afford alternative program options.”
Christopher Terry, assistant professor at the University of Minnesota Hubbard School of Journalism and Mass Communication agrees. In a phone call, Terry levied criticism at the shifting motivation behind the changes. Originally proposed as a first amendment issue in 2018, he said that was unlikely to fly due to the fact that the FCC has full mandate to regulate the content found on broadcast channel as licensing conditions. The reframing of the changes as a competition problem in an era of changing viewing habits, only came later. Even then, Terry questions who is actually benefiting from more competition.
“There is absolutely no upside for the people who use this programming in this proposal,” says Terry. “The only people who benefit from this is the FCC—they’ve got less paperwork to deal with—and the companies that are going to have more opportunities to figure out ways to get around this.”
With the FCC’s new rules moving forward nonetheless, the need for mature, responsible online platforms for kids content delivery is more critical than ever. Regulators want people to embrace the new online platforms, so there should be a destination which protects the interests of kids and their parents equally as any bottom line.
Digital video in 2019 looks like digital content at the dawn of the information superhighway when it started to be commercialized in formative ways. With booming audiences for streaming video, new OTT video services are gearing up to ‘party like it’s 1999’. While the industry has been overshadowed by Netflix for quite some time, a slew of new “Princes” is making their presence known, including Disney, WarnerMedia, and NBCUniversal.
The OTT service establishment today—spearheaded by Netflix along with Amazon, Hulu, and Apple—spend a staggering $20 Billion plus dollars annually on original content. At the same time, up and comers like Pluto TV are trying to replicate the success of traditional TV over the Internet. And, under the ownership of Viacom, they’ve started to stream premium original content in a channel lineup that now includes BET, Comedy Central, MTV, and Nick.
On the other hand, YouTube is attempting to crossover from being a user-generated network to a general entertainment content destination. And numerous video services have emerged that cater to more niche audiences or content segments. These range from Vimeo’s traction with small business organizations like yoga studios to offerings like Lifetime Movie Club for original drama fans and Britbox for domestic fans of British programming.
The point of saturation will inevitably arrive and the number and mix of AVOD and SVOD will eventually play out. If this concerns you, remember that cable boasts thousands of channels. The digital tuner on a TiVo can access over 1,300 of them. Nationwide, without duplication, there are tens of thousands of channels and over 500 premium scripted shows.
History is a
reliable predictor of the future. Looking back, linear TV grew five-fold in channels
and shows during the golden age between the 90s and early 2010s. Even so, total
viewing time increased by just 15% as monitored by TV measurement companies
like Nielsen. Ultimately, free time and content consumption are on an X-and-Y
axis.
The heaviest TV viewership comes from a core of the total TV
viewing population, which is comprised of those over 55 years old in age. However,
the median age of a viewers for newer and more tech savvy OTT platforms is just
over 30 years old. Clearly, the preferences and expectations of younger
audiences are going to shape plans for premium content offerings in the future.
Keep in mind that the proprietary premium content offerings
of services like this will be a clear differentiator. Consider the much hyped
Disney+ OTT service. In addition to boasting its deep well of animated and
family programing, Disney is also the owner of the Star Wars franchise, which
provides an intergalactic bridge to the post-millennial generation. And let’s not forget that WarnerMedia
will soon distribute the Star Wars of our time: Game of Thrones. That franchise
alone could provide the foundation for a significant OTT presence.
So, what will happen next in OTT as established and upcoming
services prepare to battle? Most likely, the future will not belong to a
handful of OTT services alone. Rather, we’ll see the proliferation of OTT
brands that cater to niches of interest and genres, as well as those providing
general TV style content offerings. These services will range widely in terms
of content and tactics and the growing OTT audience will allow them to propagate
on the Internet like TV channels did on cable.
It is less about who is going to take over OTT and more about who is going to take their audience for a great ride on the TV superhighway.
