Below is the full video of the opening season at the recent VideoSchmooze: Online Video Leadership Forum, featuring Dounia Turrill, SVP, Client Insights, Nielsen and Bruce Leichtman, President and Principal Analyst, Leichtman Research Group, with me moderating. It was a fascinating session with Bruce and Dounia dispelling many of the myths around the changing video landscape, while zeroing in on the trends that matter most.
Among the topics we explored were cord-cutting and pay-TV seasonality, how SVOD is substituting for linear TV viewing, how Netflix is penetrated across different demographics, whether CBS All Access and HBO OTT will succeed, why too much attention is paid to millennials' viewing habits, why TV Everywhere is being marketed incorrectly, and how ad dollars are shifting from TV to online video, plus others.
Discovery has unveiled its first distribution deal with Hulu this morning. The most prominent program included in the SVOD deal is "Deadliest Catch." Other programs included are "Mythbusters," "The Little Couple," "Say Yes to the Dress," "Treehouse Masters," "How It's Made" and "Homicide Hunter." The programs will become available on January 1st.
The deal is noteworthy because Discovery has been among the most cautious cable TV networks in licensing its programming to SVOD providers. A deal that Discovery had with Netflix appears to have expired recently with all Discovery, Animal Planet and Learning Channel programs pulled from the SVOD service.
Nielsen has released its Q3 '14 Total Audience report (which is the new name for the previous quarterly Cross-Platform report), the highlight of which is the marked reduction in linear TV viewing across every age group except 65+, with an accompanying surge in online video. I charted the new Q3 '14 data vs. Q3 '13 data below.
The big quarter-vs-quarter change that pops out is the 19.2% reduction in linear viewing per week by adults 18-24. This age group is now watching 17 hours, 34 minutes per week, which is 4h, 11m less than the 21h, 45m a year ago. While this group increased its online video usage by 20.7%, that only accounted for 25 incremental minutes per week.
Bernstein Research has introduced a new weekly tracking report analyzing ad-supported U.S. TV networks' viewership on a year-over-year basis. The first version, released today, shows that for the week of November 10-16, audiences fell again across the board: down 8% for cable networks, 9% for broadcast and 17% for kids-oriented networks specifically. The declines were similar on a quarter-to-date basis as well.
Bernstein has previously calculated that ad-supported TV networks' audiences declined by around 13 minutes per day in Q3, while SVOD viewership increased by around 12 minutes per day, making SVOD the dominant driver of the TV networks' audience erosion.
The WSJ reported last night that next month Nielsen will begin measuring viewership of programs on Netflix and Amazon. This would represent the first time that any sort of granular viewing data by program would be available, offering potentially huge benefits to the ecosystem. According to the WSJ, Nielsen will use its people meters to analyze the audio components of programs. A key caveat is that mobile viewing would not yet be measured.
Two months ago I wrote about the initial success cable operator UPC Hungary had in offering YouTube to its subscribers via existing set-top boxes. Since its May introduction, about 50% of those who could access YouTube had already done so at least once, and more than 50% of them had become repeat users. Now, 2 months later, 80% of those who have access have tried YouTube, with 80% of them returning.
The new data was revealed by Arpad Jordan, CTO of UPC Central and Eastern Europe at the OTT World Summit in London. YouTube access was rolled out in a first phase in May to around 250K HD set-top boxes. In September Jordan said that these first phase YouTube users were watching over a million minutes per day with average session lengths of 45 minutes.
I'm pleased to present the 249th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.
This week we tackle a topic that has gained a lot of recent attention - whether SVOD services (e.g. Netflix, Amazon, Hulu, etc.) are starting to bite into broadcast and cable TV networks' ratings and advertising revenues. The mantra from TV network executives and their studio brethren over the past few years has been that SVOD licensing revenue was purely incremental to their ad revenue.
But a slew of Q3 data, including large declines in C3 viewing (especially among under 49 year-olds), flat-to-down TV ad revenues being reported by TV networks and excellent new analysis from researchers at Bernstein, MoffettNathanson and elsewhere suggest that we may actually be at the beginning of structural audience shift from linear/TV to SVOD, with TV advertising dollars leaking over to digital and online video.
This would obviously be significant new challenge for TV networks/studios, all the more so because their own content licensing deals are the key enabler of SVOD services' appeal in the first place - and thus the shift.
It's a fascinating topic with many long-term implications…listen in to learn more!
(And note, we will dig deep into this topic at the Dec. 4th VideoSchmooze NYC in our opening session with Nielsen's SVP, Client Insights Dounia Turrill and Leichtman Research Group's President and Principal Analyst Bruce Leichtman. Register now to save and to win a TiVo Roamio Plus with Lifetime service!)
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I'm pleased to present the 248th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.
Amazon introduced a new connected TV device this week called the Fire TV Stick, priced at $39 ($19 for Amazon Prime members). We discuss where Fire TV Stick fits in the market - will it cannibalize sales of Chromecast and Roku Streaming Stick? Or, as Colin sees things, will it instead cannibalize its sibling the Fire TV, which is priced at $99?
Next, we turn to YouTube's potential ad-free subscription service, which the company's CEO Susan Wojcicki teased earlier this week. We dig into YouTube's subscription prospects and its challenges. Together with HBO OTT, CBS All Access plus Vimeo and Starz (both of which also announced subscription plans this week), there's been a huge surge of interest in subscriptions, with more likely to come.
Listen in to learn more!
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YouTube, the 800-pound gorilla of free, ad-supported online video, is considering launching a new ad-free subscription-based service, according to YouTube's CEO, Susan Wojcicki. The disclosure came during an interview at Re/code's Code/Mobile event.
While short on details, Wojcicki emphasized flexibility in providing different viewing options to different viewers. She said, "We've been thinking about other ways it might make sense for us. We're early in that process, but if you look at media over time, most of them have both ads and subscription services."
If your head is still spinning from last week's HBO/CBS/potential cord-cutting news, then buckle up, because here's another doozy that seems ripe to be right around the corner: a partnership deal between Netflix and Comcast. You heard that right - two companies that have been sniping at each for years now have a perfect moment to strike a partnership deal with significant upside to both.
First, as far as the deal itself, it would roughly follow the template Netflix has already established with large pay-TV operators in Europe and smaller ones in the U.S. All those deals' details aren't known, but at a minimum they include operators integrating Netflix's app into their IP-based set-top boxes'/devices' UI, certain co-marketing arrangements, and some type of revenue sharing by Netflix (i.e. one-time new subscriber bounties and/or ongoing revenue sharing).
"Content is King." No, wait, "Distribution is King." No, wait, "Content and distribution are equals and need to work together." And on the debate has raged for years about what's at the core of the media and entertainment industry's success. Meanwhile, Netflix keeps proving that data is fast becoming the real king, with profound implications for all players in the industry.
The latest evidence of data's ascendance and Netflix's ability to harness it is the company's new 4 movie deal with Adam Sandler. Opinions about Sandler are all over the board, but in a must-read interview with The Hollywood Reporter, Netflix's content head Ted Sarandos neatly summed up why Netflix made such a big commitment to him:
"The more global we become, the more access we have to global behavior data so we can see what people are watching all around the world. Very uniquely, he (Sandler) stands out for his global appeal to Netflix subscribers. Even movies that were soft in the U.S. outperformed dramatically on Netflix in the U.S. and around the world."
I'm pleased to present the 244th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.
Netflix kicked up a lot of dust earlier this week, when it announced the sequel of "Crouching Tiger, Hidden Dragon," produced by The Weinstein Company, will be available simultaneously as part of Netflix monthly subscriptions and in IMAX theaters when it premieres in August, 2015. The so-called "day-and-date" strategy prompted two of the three big U.S. IMAX chains, Regal and Cinemark, to declare they won't show "Crouching Tiger" on their screens.
The core issue here is whether a meaningful percentage of Netflix subscribers will opt to watch the movie as part of their subscription, thereby cannibalizing potential theater sales. Colin and I agree this risk is high, mainly because a family of four would pay at least $60-$80 just for tickets to see the movie in IMAX, a stark premium over their $8 Netflix subscription.
Admittedly, IMAX is a very unique experience, but with the quality of today's HDTVs and home theater, for many, watching at home is quite stellar. As such, theater owners seem well justified in boycotting the movie to preserve their long-term value proposition.
The "Crouching Tiger" move raises a host of other questions Colin and I also dig into: Will it have a positive impact on piracy? Is Netflix signaling a serious push beyond TV into movies (see also its 4-movie Adam Sandler deal this week)? And, is Netflix shifting toward a more exclusive content strategy?
Click here to listen to the podcast (20 minutes, 28 seconds)
I'm pleased to present the 243rd edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.
Earlier this week both Colin and I were intrigued to see AT&T in the market with a new $39 per month offer putting broadband and OTT front and center, with HBO/HBO Go plus a year of Amazon Prime. Just the low tier of U-verse U-basic TV is included. Colin and I both interpreted this as an aggressive move to attract millennials/cord-nevers.
The offer is also the latest by a pay-TV operator using OTT services as a lure. We've seen several European and smaller U.S. pay-TV operators promote Netflix as well. Colin and I discuss how operators are clearly becoming more flexible with regard to OTT services. We wrap up with a preview of some of the new OTT pay-TV services coming to market and whether a linear TV style package makes sense and whether they too should incorporate OTT services.
Click here to listen to the podcast (17 minutes, 47 seconds)
Here's more evidence that over-the-top video may be pay-TV's friend, not its foe, as conventional wisdom holds. As reported by Broadband TV News, YouTube is enjoying early and widespread success since its recent launch by pay-TV operator UPC Hungary to hundreds of thousands of subscribers there.
Unveiled at the end of May as part of UPC Hungary's first phase rollout of multiple online apps, YouTube is already generating over a million minutes per day of viewing by UPC Hungary subscribers, the highest among the 20 different apps now available.
According to a new eMarketer forecast, in 2014 YouTube will account for 18.9% of the U.S. online video ad market, down from 21.2% in 2013. Still, YouTube will see a healthy 39.2% year-over-year net video ad revenue increase, from $810 million in '13 to $1.13 billion in '14. eMarketer forecasts YouTube's U.S. video ad revenue to continue growing, by 34.2% in '15 to $1.51 billion and by a further 18.3% in '16 to $1.75 billion.
September is here and that means summer 2014 is in the rear-view mirror. For online video and the broader video ecosystem, it was another busy few months, as viewers around the world continue to shift their consumption patterns, with many companies scrambling to keep pace. Below I've distilled my list of the 10 biggest online video stories of the summer - read on and let me know if I've missed something!
I'm pleased to present the 237th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.
This week we dive deep into the question of whether YouTube is indomitable or vulnerable to new competitors. Colin observes that the 45% revenue split YouTube keeps has opened the door for everyone from Vessel (former Hulu CEO Jason Kilar's startup) to Yahoo to others to approach YouTube stars about better deal terms. Major MCNs like Maker Studios (acquired by Disney) and Fullscreen (rumored to be acquired by Otter Media) are expanding beyond YouTube with their own properties.
However, I don't see much changing with the revenue split, except maybe the largest players getting improved terms. For both established and startup content providers, YouTube offers unparalleled audience reach, publishing tools and monetization. I offer a few examples as proof of YouTube's power: PewDiePie (which now has an astounding 29 million subscribers), Vice News (a pure YouTube news channel now able to take over the NYTimes.com's masthead ad) and Sorted Food (a British startup that has gained 870K+ subscribers on YouTube and now tops its Food category).
For all of these content providers and tons of others, YouTube provides an open, flexible distribution platform unlike anything before it in the media business. Ad splits will continue to be a bone of contention, but YouTube is poised to only get stronger going forward.
In an interview with Recode on Tuesday, Sony Computer Entertainment America President and CEO Shawn Layden said the company is still planning to launch a "revolutionary" OTT pay-TV service by the end of 2014.
However, as Intel learned with its own misguided OnCue foray, the big cable network owners aren't enabling any revolutions to occur in the pay-TV industry. To the contrary, they're working hard to extend the status quo. This, plus other factors, means the odds of success for Sony's nascent OTT pay-TV service are extremely low.
Here's a new measure of how deeply online video viewing, and Netflix in particular, have penetrated the living room: 49% of all U.S. households now have at least one TV connected to the Internet, slightly over double the 24% level from 2010. For Netflix, 49% of its subscribers report watching online video on their connected TV weekly vs. 8% weekly use among all non-Netflix subscribers. 78% of Netflix streaming subscribers watch Netflix on a connected TV.
TVs are connected either through game consoles, Blu-ray players, Smart TVs or devices like Roku, Apple TV, Chromecast, etc. The data is according to the 8th annual Leichtman Research Group's Emerging Video Services study.
Binge-viewing is surely one of the most notable cultural phenomena of the past few years. Barely registering as a concept less than 3 years ago, many recent research reports now cite binge-viewing as having been adopted - if not regularly practiced - by a majority of TV viewers (examples here, here, here, here, here, here).
The shift toward binge-viewing has immense implications for the TV and video industries, touching everything from the creative process to programming/distribution decisions to monetization approaches. Some companies are fully embracing binge-viewing and riding its wave, while others are taking a more cautious approach.
Stepping back though, how exactly did binge-viewing become such a cultural phenomenon? I believe there are at least 5 key contributing factors, with the relationships among them creating a perfect storm of growth.