I recently caught up with Walt Horstman, SVP and GM of TiVo’s Advanced Media and Advertising business unit. TiVo, which was known for its DVRs, was acquired in the Fall of 2016 by data provider Rovi, and the combined company was renamed TiVo. It is pursuing an ambitious vision of using data to increase the value of relationships among viewers, content providers and advertisers. An edited transcript follows.
VideoNuze: What is TiVo doing with advanced advertising?
Walt Horstman: There is a lot going on at TiVo in terms of advanced media and advertising and data. I’m nearing on my one-year anniversary at the company, and we’ve been really heads down looking at the number of assets that we’ve got across the company, through a lot of acquisitions over the years, that we’ve now consolidated under this business unit, Advanced Media and Advertising, and it’s coming together very nicely with a very impressive set of capabilities. We really are focusing on two key objectives within the media ecosystem. We call these our two Virtual Cycles.
I’m pleased to present the 411th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.
This week Colin and I share details from TiVo’s new Q4 ’17 Online Video & Pay-TV Trends report (download here), which shows how the high cost of multichannel TV subscriptions is leading to a record level of cord-cutting. The TiVo report also shows how SVOD has gained loyalty and that broadcast TV remains critical for many viewers.
All of this adds up to a dynamic which Colin and I only see firming up further: consumers becoming more proactive through more cord-cutting and cobbling together SVOD subscriptions with low cost, “good enough” skinny bundles and/or antennas. Skinny bundles like YouTube TV, which includes broadcast will become market leaders, while those that don’t (or don’t offer a solution like Sling TV does) will be challenged. Absent a new catalyst, we see this as the state of play in the TV industry for the foreseeable future.
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Cord-cutting is accelerating, and there’s a simple, unsurprising reason why: pay-TV service is just too expensive. For the fifth quarter in a row, that’s the finding of TiVo’s Online Video & Pay-TV Trends Report. In Q4 ’17, in response to the question “What factors influenced you to cancel your cable/satellite service?” the price/too expensive answer grew by 6.6 percentage points vs. Q4 ’16 to 86.7%, its highest level ever.
Price/too expensive is by far the most important reason, with the second reason, “I use an Internet streaming service” at 39.7%, actually down 8.6 percentage points vs. Q4 ’16. Next was “I use an antenna to get the basic channels on my TV, at 23%, down 4.2 percentage points vs. Q4 ’16.
If you find yourself watching a lot of video these days, you’re not alone. According to a new global survey from TiVo, the average viewer now spends almost 5 hours a day with video, including 4.4 hours watching and another 28 minutes searching for something to watch. U.S. viewers lead with 5.1 hours watched per day, followed by Brazil, with 4.7 hours. At 3.3 hours per day, viewers in Germany watched the least.
Despite the headlines around cord-cutting, the survey found that pay-TV remains highly popular, with 87% of U.S. households still subscribing (along with 90% in Western Europe and 96% in LATAM). But the survey notes how viewers are experimenting with new options. 64% of U.S. households now have an SVOD service (60% in Western Europe and 71% in LATAM) while 44% of U.S. have a connected TV device (44% in Western Europe and 59% in LATAM).
TiVo has released its Q2 ’17 Video Trends Report, finding among other things that satisfaction with the value of pay-TV among subscribers noticeably increased over the prior quarter even as price remains a major concern, and a driver of cord-cutting.
TiVo found that 31.2% of subscribers said they’re “very satisfied” with the value of their pay-TV service, up 7.5 percentage points vs. Q1 ’17 and 11.6 percentage points over the past 2 years. Another 52.9% of subscribers said they’re “satisfied,” roughly flat with Q1 ’17. Respondents saying they’re “unsatisfied” dropped 6.9 percentage points vs. the prior quarter to 15.9%.
Execs from broadcasters, content owners and tech companies recently joined 100,000 of their peers at the NABShow 2017 convention in Las Vegas. A key focus for many at the show was how to drive breakthrough multiscreen experiences, get consumers to engage more and fully monetize the many opportunities that are emerging.
During the Online Video Conference's “Breaking Through With New TV Experiences” session I moderated, attendees heard about the latest efforts underway by industry leaders to bring more personalization, discoverability and innovation to content delivery. Consumers have an incredible range of choices of multiscreen services that now span beyond VOD and linear to include fast-evolving OTT offerings. Representatives from Comcast Technology Solutions, Amazon, Gracenote and TiVo joined the discussion to shed insight into ongoing work, challenges ahead and what it takes to deliver industry-leading multi-screen experiences. Panelists also pulled back the curtain on the back-end capabilities that will be required to support these increasingly complex services.
IBB Consulting works closely with operators and content owners to help design and execute multiscreen distribution strategies. Many of the efforts and activities that we heard about from the panelists are being undertaken or considered by a range of stakeholders today.
Downloading video for offline playback continues to gain momentum with Showtime announcing late last week that it has enabled downloading of its entire roster of programs from its standalone subscription and TV Everywhere apps at no additional cost. Downloading is available on iOS and Android phones and tablets plus Amazon Fire tablets.
Loyal VideoNuze readers know that I’ve been an enthusiastic downloading proponent for 4 1/2 years, back to when I first experienced TiVo’s implementation of it via TiVo Stream. I immediately saw downloading as a killer app because it allowed high quality out-of-home viewing independent of shaky or non-existent WiFi hotspots and/or eating up expensive mobile data plans (if they could even support video streaming).
I’m pleased to present the 361st edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.
This week Colin and I discuss TiVo’s 16th quarterly Video Trends Report, which we both covered this week (here and here). We agree that the pay-TV industry has painted itself into a high-cost corner. The consequences of this are increases in cord-cutting, cord-shaving and adoption/use of SVOD, reduction in perception of per channel values and budding interest in new skinny bundles.
All of this is bad news for the industry and the report illustrates the specifics of each of these trends.
The report is available as a complimentary download here.
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TiVo has released its 16th quarterly Video Trends Report (previously published by Digitalsmiths, which was acquired by TiVo in 2014) and the key takeaway is that pay-TV’s high cost is creating huge industry vulnerability that is already showing up in increased cord-cutting/cord-shaving and higher penetration and use of SVOD services. It also looks possible that interest in skinny bundles could be fueled by their low cost compared to traditional pay-TV.
TiVo found that in Q4 ’16, 17% of respondents didn’t subscribe to a pay-TV service, and of this group, 19.8% cut the cord in the last 12 months. No surprise, “price/too expensive” was the top factor influencing respondents’ decision to cut the cord, cited by 80.1% of them. But in second position was using a streaming service such as Netflix/Hulu/Amazon, which was cited by 48.3% of respondents.
I'm pleased to present the 348th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.
We lead off this week with a cord-cutting update, based on reported Q3’16 results from the 11 largest pay-TV operators in the U.S. Video subscriber losses expanded a bit, to 255K in Q3 ’16 vs. 210K in Q3 ’15, with a continuing shift to cable operators and away from satellite and telco. As I wrote on Wednesday, depending on how the DirecTV Now, Hulu and YouTube skinny bundle launches in 2017, subscriber losses could accelerate.
We then shift to discussing new TiVo survey data that provides insights about online video viewers’ tolerance for ads. As Colin points out, despite respondents stating they have a low tolerance, their behavior suggests otherwise. That suggests there’s more potential for ad-supported premium video, in addition to the SVOD model that has thrived.
Speaking of ads, I also point out the surprising research from Brightcove this week, that 46% of people who watched a branded video on a social platform then made a purchase. That’s the kind of performance that gets marketers’ attention and could portend an increase of more TV ad dollars moving to social.
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Yesterday YouTube announced YouTube Go, a new mobile app that provides sophisticated new features for offline video use. While YouTube Go will initially only be available in India, it will no doubt be introduced in other geographies once proven in.
YouTube Go builds on YouTube’s embrace of downloading for offline viewing in India and other Asian territories begun nearly two years ago with the introduction of YouTube Offline, which allowed downloading of certain videos for viewing within 48 hours. Earlier this year YouTube added the “Smart Offline” feature that allows users to schedule their downloads to take advantage of off-peak data use.
TiVo has announced its latest DVR, the 4K BOLT+, which includes 6 tuners and 3 GB of storage, comparable to the existing Roamio Pro. The BOLT+ follows the introduction of the original 4K BOLT one year ago, which included 4 tuners and two sizes, 500 GB and 1 TB. Importantly the original BOLT only came in white, while the new BOLT+ comes in black, which will make it fit more elegantly into existing entertainment centers. The BOLT+ retains the BOLT’s sleek, unconventional curved design.
The TV industry is in a race to data enable its ad inventory to keep pace with online video and digital alternatives like Facebook and Google that offer finely-grained audience data at massive scale. Earlier this week TiVo Research and Cadent announced a new joint solution that is another good example of how the industry is creatively pursuing data enablement to build more targeting value across its inventory.
TV ad budgets are being diverted to many different types of digital spending these days, so it’s no surprise to see TV networks and their partners re-asserting the value of TV advertising, especially as the all-important upfronts approach.
The latest evidence is a new study from TiVo Research, consulting firm 84.51 (part of The Kroger Co.), A+E Networks and Turner, which found that for every dollar decrease in TV ad spending, the reduction in sales was $3. The study looked at 15 consumer packaged goods brands which had reduced TV ad spending somewhere between 29% and 75%. The study then measured their sales performance for one or two quarters in the 2013-2014 period.
I'm pleased to present the 292nd edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.
Last month Colin and I discussed on our podcast how the connected TV device market is in flux, and this week’s introduction of the TiVO BOLT and the new Chromecast provided yet more evidence of this (not to mention the new Amazon Fire TV and Apple TV).
Colin and I are both very impressed with the BOLT and its new features (after we use the review units we’ll have more to share). We agree that the new “SkipMode” feature - which allows viewers to skip an entire commercial break for a set of 20 TV networks during primetime - is the biggest news with BOLT.
Beyond BOLT, Google also announced new versions and form-factors for its Chromecast device, which Colin and I have both been big fans since its initial release. Colin reviews Chromecast’s new capabilities, which at $35, makes it an appealing mobile device complement.
Stepping back, both of continue to be struck by how all the innovation in connected TV devices is laying the groundwork for SVOD services (which are making investments in long-form programming) to thrive in the living room.
(Note, we recorded before news broke that Amazon has banned Apple TV and Chromecast from its store, the latest twist in the connected TV device competition.)
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TiVo has introduced its latest product, the BOLT, with key features including faster ad-skipping, 4K support, an accelerated viewing mode and a new form factor which includes a unique curved design. TiVo is retailing the 500GB version for $300 and a 1 TB version for $400, both of which include a year of service (equal to $180).
The most intriguing feature of the BOLT is the new “SkipMode,” which allows one-button fast-forwarding through a recorded program’s entire ad pod. This means that rather than manually fast-forwarding through the ads and overshooting or undershooting to get to the point where the program resumes, the viewer can simply use SkipMode to seamlessly continue viewing (note SkipMode won’t be available for all programs).
I'm pleased to present the 280th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.
First up this week, we discuss binge-viewing’s soaring popularity, most recently illustrated by a new study from TiVo, which found 92% of respondents saying they had binge-viewed at some point. (TiVo defines binge-viewing as watching more than 3 episodes of a series in a day.)
No surprise, Netflix dominates, with 66% of binge-viewers saying they use the service to watch their favorite shows. Interestingly, respondents said that half of their binge-viewing occurs alone, reflecting the broader trend of how personalized and fragmented TV has become given the broad range of options.
Supporting that concept is data from Twitch, the live-streaming gaming site that Amazon acquired, showing that 21 million viewers watched its E3 coverage, more than double the level of 2 years ago. There was a peak of 840K concurrent viewers, 16 times as big as E3’s attendance. The popularity of Twitch, and soon YouTube Gaming which will be huge as well, both illustrate how live-streaming gaming is peeling audiences away from traditional TV viewing.
Listen in to learn more and happy July 4th!
Hulu has announced that it has distribution deals with 5 small-to-mid-sized U.S. pay-TV operators: Armstrong, Atlantic Broadband, Mediacom, Midcontinent and WideOpenWest (WOW!). The deals follow last week's news that Hulu has signed up Cablevision as the first U.S. pay-TV operator to distribute its service.
Like the Cablevision deal, there weren't a lot of specific details shared about pricing or packaging. The 5 operators will be able to offer Hulu's content on their advanced set-top boxes. While the set-tops aren't identified, a number of these operators use TiVo DVRs as their advanced set-tops to offer integrated OTT/pay-TV/VOD experiences.
Discovery and analytics provider Rovi has announced its acquisition of Fanhattan, a startup offering cloud-based discovery solutions as well as the innovative Fan TV connected TV device. Fanhattan combines live TV, VOD and OTT in one search experience powered from the cloud, which is available to viewers either through the web, an iOS device or the Fan TV.
Omar Javaid, SVP/GM of Rovi's Discovery group told me the primary motivation for the deal was Fanhattan's cloud-based unified discovery technology, its team and the products. Fanhattan augments Rovi's existing next-generation discovery products. Rovi's customers include many pay-TV operators (Charter, Dish, etc.), device manufacturers (Apple, Samsung, Sharp, etc.) and online entertainment services (Shazam, Facebook, MTV, etc.).
Charter Communications has begun rolling out personalized video search and recommendations to its 5 million subscribers, using Digitalsmiths' Seamless Discovery Platform. Billy Purser, VP of Marketing at Digitalsmiths told me that Charter actually began introducing this to its web and Charter TV mobile app users over the past 3 months and has now started rolling it out to subscribers with IP set-top boxes.
The Digitalsmiths search and recommendations are based on the company's Unified Data Service, which structures numerous individual data services (e.g. TMS, Rovi, Thuuz, Rotten Tomatoes, Metacritic, Common Sense Media, etc.). This data is then paired with both implicit (e.g. viewer behavior) and explicit (e.g. viewer ratings).