As expected, Hulu announced its skinny bundle offering today at its NewFront/Upfront presentation. Dubbed “Hulu With Live TV,” and priced at $39.99 per month, the service includes 50+ live and on-demand channels, 50 hours of DVR recording, 2 concurrent streams and 6 profiles.
Hulu With Live TV is the latest skinny bundle to come to market, joining Sling TV, DirecTV Now, YouTube TV, PlayStation Vue and others rumored still to come from Comcast, Verizon, etc. All of these skinny bundles are vying for a slice of the approximately 15-20 million broadband-only homes in the U.S. (and growing). And though they won’t say it, they’re also looking to draw some of the approximately 95 million existing pay-TV subscribers who are questioning the value of their expensive multichannel bundle as their viewership moves to SVOD services like Netflix, Amazon and others.
Showing growing confidence in its ability to deliver more precise ads for clients, NBCUniversal announced this morning that it is committing $1 billion of ad inventory in advance of the upfronts for clients who want to buy targeted ads across NBCUniversal’s portfolio. The move is the latest by TV networks to enable data-driven ad buying in order to better compete with digital behemoths like Google and Facebook which are increasingly pursuing traditional TV ad dollars.
With the move, NBCUniversal is guaranteeing that data-driven campaigns will deliver “precisely defined customers” on its platforms, part of its “Symphony” strategy of tapping into all of its broadcast and cable TV networks, digital properties, distribution partners, theme parks and talent.
NBCU is balancing audience-based targeting conducted though a variety of data and platform initiatives with ads sold the traditional way, based on context and Nielsen metrics. That was one of the key takeaways from a keynote with Dan Lovinger, NBCU’s EVP, Advertising Sales, NBC Sports at our recent SHIFT // Programmatic Video & TV Ad Summit.
In a wide-ranging interview with Wall Street Journal senior editor Mike Shields, Dan discussed how NBCU’s Audience Targeting Platform (ATP) enables the company to re-optimize upfront buys across its entire portfolio, using its own data. Dan contrasted ATP with the company’s recently-launched NBCUx for Linear TV, which allows advertisers to bring their own data and then review all available scatter inventory to create an audience-targeted media plan.
As Dan explained, both approaches are meant to give advertisers more flexibility and efficiency in reaching desired audiences. While the use of data is core, Dan sees data more as a commodity, with the real value being how and where it’s being applied. And while audience-based targeting is gaining momentum, Dan noted that context is still very important and many advertisers remain focused on that.
In the interview Dan also discussed how NBCU is expanding its access to more digital inventory via deals with BuzzFeed and Apple News. He also elaborated on digital viewership in the recent Rio Olympics and how those ads were sold, especially how NBCU structured deals with both Facebook and Snapchat. Dan also highlighted how NBCU has reduced its ad loads in VOD and is very focused on optimizing the viewer’s experience, among other topics.
NBCU has become a leader in the use of data and automation to mine more value from its broad portfolio of networks and digital inventory. Dan’s interview offers great insights about how NBCU is thinking about data and evolving its business going forward.
Hulu announced yesterday that it has struck deals with 21st Century Fox and Disney for access to over 35 different TV networks for Hulu’s skinny bundle, slated to launch in early 2017. The agreements are no surprise given Fox and Disney are Hulu’s two primary investors, along with Comcast (which has a back seat role per restrictions related to its NBCU acquisition) and Time Warner, which recently took a 10% stake in Hulu.
But the devil is in the details, because when it comes to Hulu’s ability to include live broadcast feeds in its skinny bundle, the Fox and Disney deals only get it a small part of the way. Fox owns 17 stations around the country and Disney owns just 8. Since there are 210 DMAs in the U.S. that means Hulu needs to strike agreements with lots of different local station owners to enable a standardized nationwide skinny bundle offer including local broadcast feeds.
Each week brings more innovation, product announcements and new business models to the ever-changing video industry. This week was certainly no different, and news from 3 companies - Google (a deal with CBS for its Unplugged skinny bundle), VUDU (a new ad-supported on-demand movie offering) and LeEco (a range of new products from the Chinese giant, including TVs and content) - caught my attention. Each has the potential to cause further industry disruption, or amount to nothing. Below I share thoughts on each.
Last Thursday night felt like a milestone moment to me in the continued mainstreaming of online video viewing. At 9pm, I turned on my 46-inch Insignia HDTV, toggled to input 3, grabbed my Fire TV remote control, scrolled to the app section, downloaded the Twitter app and began watching the Jets play the Bills over my 100 mbps Comcast broadband connection in pristine quality. Just like that I was watching an NFL game outside the traditional TV ecosystem.
The whole process took just a few minutes and likely could have been accomplished by the least tech-savvy among us. On the surface it might seem like a relatively trivial undertaking, but in reality, the experience reflected the significant technology and consumer behavioral advancements that have taken place in just the past 10 years or so. Every one of these advancements was critical in enabling the Twitter broadcast. And every one of them is also causing the seismic changes roiling the broader TV industry.
I'm pleased to present the 336th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.
Like tens of millions of others, Colin and I have been watching our fair share of the Olympics. And like lots of others as well, instead of watching on linear TV, much of our viewing has been via the NBC app. Although linear TV viewing of the Olympics is down this year, NBC has reported that over 2 billion minutes have been streamed.
That reflects a broader shift in viewing behavior over the last few years as consumers move from linear to on-demand viewing using various devices. Colin and discuss the implications of this and what we might see in 2020.
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Click here to listen to the podcast (23 minutes, 44 seconds)
I'm pleased to present the 331st edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.
Broadcast TV networks are taking different approaches to online video and this week saw updated online initiatives from Fox and ABC with the former announcing live-streaming of its primetime lineup in all 210 U.S. markets and the latter launching updates to its online service including classic shows, original digital series and more.
Meanwhile NBC is gearing up for the Olympics in 3 weeks, which promises to be the most ambitious online sports event to date. And CBS is continuing to aggressively pursue its own independent path online, even as recent rumors have the network participating in YouTube’s forthcoming online subscription service.
In this week’s discussion Colin and I review the Fox and ABC moves, comparing and contrasting them as well as NBC’s and CBS’s approaches.
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One of the highlights of the recent Video Ad Summit was the keynote interview I did with Marc Debevoise, who was just promoted to be President and COO of CBS Interactive. Marc oversees strategy and operations for all of the CBSi’s 25+ entertainment, sports, news, technology, gaming and media brands. Marc has also led the development of the CBS All Access SVOD service and CBSN 24/7 digital news service.
In the interview Marc shares the 3 biggest market trends that are guiding CBSi’s strategy and what’s ahead. We discuss in detail the strategic drivers behind the launch of CBS All Access and CBSN, including advertising strategies for both and how well they’ve been accepted by viewers. Marc shares lots of details about viewers’ profiles, how they engage with the two services, the devices that are most successful and how CBS is using them to broaden its appeal to younger viewers. Marc also explains how original programs (e.g. “Star Trek” and “The Good Wife” spinoff) are playing a big role in CBS All Access game plan.
We also talk about how CBS has become a leader in online sports, trailing only ESPN overall in the first part of 2016. Streaming the Super Bowl to connected TVs was a big milestone earlier this year and Marc discusses why CBS decided to do this and what impact it will have on streaming other sports. We wrap up by looking ahead to big challenges that CBSi is addressing.
There is a lot of skepticism floating around about the role of broadcast TV in the fast-evolving online video landscape, but Marc does a great job of explaining all the moves CBS is making to remain a leader.
Watch the keynote interview (35 minutes, 30 seconds)
One of the most interesting panel discussions at the recent Video Ad Summit was “Reaching Audiences at Scale: Will TV Succeed in the Digital Age?” which included Adam Gerber (SVP, Client Development & Communications, ABC), Mike Germano (Chief Digital Officer, VICE Media), Melissa Kihara (Global VP of TV & Video Products, Xaxis), Bob Toohey (President, Verizon Digital Media Services) and Lorne Brown (Founder and CEO, Operative) moderating.
It’s no secret that video viewing is fragmenting and linear TV is declining as new video sources proliferate and behaviors change. Still, TV networks are running fast, distributing programs in new ways, investing heavily in data to better enable targeting by advertisers and leveraging social media to better engage viewers.
As Adam pointed out, research suggests that scale in long-form ad-supported online viewing is dominated by TV networks. But as he also pointed out, scale in data and audiences is dominated by platforms like Facebook and Google. This is one of the key sources of tension for advertisers - how to combine the best of both, to achieve scaled, targeted, efficient, effective, trusted advertising in premium video?
The panelists agreed that for lots of reasons the market is nowhere close to reaching this nirvana state. They explored all the reasons why, along with things that are being done to move the ball forward. For anyone trying to better understand how TV is evolving in the digital age and what role it will play, it’s a fascinating discussion.
Watch the video now (39 minutes, 48 seconds).
I'm pleased to present the 321st edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.
Hulu was in the news in a big way this week, confirming a WSJ report that it plans to launch a skinny bundle next year. As I wrote on Monday, the move raises numerous questions, which Colin and I debate on this week’s podcast.
Absent more information, I’m still somewhat skeptical. It feels very risky to me for Disney and Fox to convert Hulu into a pay-TV competitor. It’s also not clear that the economics of a direct subscriber relationship are superior to the steady flow of monthly retransmission consent and affiliate fees. Finally, I wonder about how big the addressable market is and how appealing the Hulu skinny bundle actually will be, particularly from an all-in cost perspective.
Colin, on the other hand, is much more optimistic. He doesn’t believe there’s much risk, thinks the economics are better going direct and believes the service can be very appealing. So clearly we’re coming at this from very different angles.
Listen now to learn more!
Click here to listen to the podcast (24 minutes, 40 seconds)
With so much uncertainty in the TV and online video industries these days, I keep telling myself to never be surprised by anything anymore. But last night, when the WSJ headline, “Hulu is Developing a Cable-Style Online TV Service” popped up in my Twitter feed, I have to admit it tested the boundaries of my imagination.
The most immediate head-scratcher was that such a move would position Disney and Fox, two of the three network shareholders in Hulu (along with Comcast, which is now a silent partner due to terms of its NBCU acquisition) as direct competitors of pay-TV operators, their biggest distributors. These companies spend billions of dollars per year to carry the very same TV networks that would now be included in the skinny Hulu lineup.
I'm pleased to present the 319th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.
Colin and I are back from NABShow where I produced the 2-day Online Video Conference, which included 52 speakers over 15 sessions. One of the highlights for me was doing a keynote interview with Michael Paull, VP of Digital Video at Amazon who oversees the company’s new Streaming Partners Program (SPP).
As I wrote yesterday, SPP will likely have a majority of U.S. SVOD services included this year, putting Amazon in the undisputed role as THE third-party distributor of SVOD in the U.S. Colin and I dig into why that is potentially so critical and the implications it could have for Netflix and the pay-TV industry. (Colin provides a personal example of how Amazon hooked him on a subscription to Tribeca Shortlist which he never would have found on his own).
We then transition to specific takeaways from NABShow. Colin notes that many vendors were demonstrating how online video can be delivered with guaranteed quality and user experiences, making online video every bit as good as TV itself. For pay-TV operators specifically, the imperative to move video services online has never been higher.
Listen now to learn more!
Click here to listen to the podcast (23 minutes, 41 seconds)
TV programmers like Viacom and AMC are in the same position that print companies like The New York Times and Conde Nast were ten years ago. As consumers moved to reading content online, the legacy publishing companies figured they could replicate their business on a new channel. No one could believe that a tech company with no real content could compete for brand advertising budgets. We all know how that played out.
Now, consumers are cutting the cord and moving to digital channels to watch TV. There is more to lose on both the buy and sell side during this time around. TV advertising is considered by advertisers to be the holy grail of inventory, and they don’t want to lose it any more than the TV companies do. However, the siren song of audiences at scale and with technical ease could change their minds.
I'm pleased to present the 311th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.
First up this week we discuss NBCU’s announcement on Wednesday that it will allow select advertisers and agencies to buy ads programmatically in its linear TV networks. It’s another important step in advertising becoming more data-infused and targeted, though as I explained, it’s not yet a full-blown programmatic offering like we’ve seen in video and display. Colin and I dig into the details.
We then turn to new research on connected TV adoption and forecasts. Colin details findings from 3 different sources, which differ from one another. We attempt to reconcile them, although not fully successfully. Regardless, connected TVs remain one of the pivotal areas of online video, providing access to high-quality long-form content in the living room.
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NBCU made a big move to embrace audience-based buying yesterday, announcing that select advertisers and agencies will be able to use data and automation to buy ads on linear TV. The expansion of the company’s NBCUx platform represents the most significant step by a TV network group yet to adopt a programmatic approach to buying traditional TV ads. NBCU called its initiative “unprecedented.”
Overall, the quality of streaming of last night’s Super Bowl was strong, although I experienced inconsistent latency across different devices I was using. As shown in the images below, I set up an informal lab in my house, with the game on Comcast, via X1 (center), Roku TV (left rear), Amazon Fire TV on an Insignia (right rear), CBSSports.com (front left and right) and Verizon Go90 (front center).
As can be seen, each device is lagging behind the CBS broadcast feed on TV and to a different extent. I measured the latency at a few points and it seemed to get worse as the game progressed. For Lady Gaga’s national anthem, the Roku and Amazon feeds were approximately 40 seconds delayed, but by the end of the game, each was over a minute delayed. The online streams were approximately half this delay and the Verizon stream still slightly better.
Continuing the trend of making live sports available to viewers across a wide range of devices, CBS will stream live coverage of this Sunday’s Super Bowl 50 broadcast to viewers both online and through an expanded network of over-the-top connected TV devices, including Xbox One, Apple TV, Roku and Microsoft 10. This decision by CBS and the NFL to allow, and even encourage, the consumption of the premier sports event of the year through connected TV devices is significant for 5 reasons:
The NFL announced yesterday that it was splitting broadcast rights to Thursday Night Football in 2016 and 2017 between CBS and NBC. The WSJ reported that each network will pay $225 million for the annual rights, a 50% increase over the $300 million per season that CBS alone had been paying.
But the higher broadcast fees are just the beginning of how the NFL will more fully monetize the upcoming seasons. More intriguing were the sentences from the NFL’s press release: "The NFL is in active discussions with prospective digital partners for OTT streaming rights to Thursday Night Football. A deal announcement is expected in the near future."
The numbers used to analyze the video ad market can be cut in many different ways.
According to the IAB, video ad spend on desktop totalled US$2.0 billion, or 7% of digital ad spend, in the first half of 2015. The peak body also listed mobile video spend, a figure of less than US$300 million for the period, in its H1-15 Internet Advertising Revenue Report.
Yet we know more than this is being spent on digital video. The IAB’s report doesn’t capture ads sold in over-the-top (OTT) TV content, programming which can be delivered via desktops as well as a range of other connected devices. Data from The Diffusion Group in April forecasts ad revenue from OTT TV will reach US$8.4 billion in 2015, a number well below broadcast TV’s expected $60 billion haul.