Today I’m continuing our “In Focus,” series, in which I preview one of the sessions at our 8th annual VideoNuze Online Video Advertising Summit, coming up on Tuesday, June 12th, including what I hope you’ll learn and why I think the topic is important.
In focus today is our 1:35pm session, “Is Data Living Up to Its Potential?” which includes George Musi (EVP, Data, Analytics, Insights, Blue 449/Publicis Media), Lance Neuhauser (CEO, 4C), Bre Rosetti (SVP, Director of Strategy and Innovation, Havas Media) and Vikram Somaya (SVP, Global Data Officer and Ad Platforms, ESPN), with Dan Punt (Managing Director, FTI Consulting) moderating.
Data has become the most important ingredient in the advertising ecosystem, driving how tens of billions of dollars of annual spending are distributed by advertisers eager to micro-target their desired audiences and achieve the highest return on ad spend. It is no secret that Google and Facebook in particular, have used their massive troves of user data (sometimes to their detriment), to help advertisers’ quest for targeting and efficiency in the digital world.
On Disney’s earnings call earlier this week, company CEO Bob Iger shared some details about ESPN’s new sports streaming service that will launch this spring and cost $4.99/month. Based on the initial reveal, it seems like a sports super-fan product that will give Disney some incremental revenue, but won’t be a game-changer in the broader pay-TV or online video worlds. It’s a refresh of the existing ESPN app powered by newly-acquired BAMTech technology.
Iger described 3 main features of the new ESPN app:
By now we’re all familiar with the 3 big announcements Disney made yesterday: 1) a plan to launch its own entertainment-focused SVOD service, in turn sunsetting in 2019 its Netflix licensing deal for Disney/Pixar content, 2) a plan to launch an ESPN OTT service and 3) spending $1.58 billion to buy another 42% of BAMTech and take control of that business.
Focusing on Disney’s entertainment SVOD service it looks pretty clear now that by signing the original December, 2012 licensing deal with Netflix, Disney blew a big strategic opportunity to get in front of the trend toward direct-to-consumer online distribution.
Screens are now omnipresent with viewers fluidly shifting their consumption depending on their circumstances. At our recent Online Video Ad Summit session, “Best Practices in a Multiscreen World,” panelists discussed what’s worked well for them in multiscreen, including workflows, measurement, monetization, quality of experience, storytelling, brand safety and much more.
The session included Josh Arensberg (VP, Head of Corporate Development and Strategy, Comcast Technology Solutions), Patricia Betron (SVP, Multimedia Sales, ESPN), Scott Doyne (SVP, Product Strategy, Turner), Julie DeTraglia (VP, Ad Sales Research, Hulu), with Dan Punt (Managing Director, FTI Consulting) moderating.
Watch the video (35 minutes, 52 seconds).
Say this for Disney - in just the past couple of years or so it has moved to cover virtually every bet for how online video might impact the company in the future.
With its Maker Studios acquisition, Disney expanded into YouTube-style content creation for kids and millennials. With DisneyLife, it’s moving into SVOD entertainment beyond its pivotal output deal with Netflix. Now with Hulu, it’s addressing cord-cutting and the potential of skinny bundles (as well as with deals with DirecTV Now, Sling TV and PlayStation Vue). And finally, with its new $1 billion BAMTech investment, it’s adding platform capabilities for direct-to-consumer live sports streaming. Plus, with the forthcoming ESPN OTT service, it will test its own direct-to-consumer sports offering.
One of the big benefits of online video advertising is vastly improved audience targeting beyond typical demographics found in traditional TV. TV networks are responding by investing significantly in data and audience segmentation to stay competitive.
What they’re prioritizing, how they’re overcoming key challenges and how these efforts synch with online video and other digital initiatives were all in focus at our recent Video Ad Summit session, “Optimizing Video Ad Targeting Through Data and Insights.”
The panel featured Gabe Bevilacqua (VP, Product Management, Viacom Vantage), Denise Colella (SVP, Advanced Advertising Products & Strategy, NBCU), David Ernst (VP, Audience Measurement & Innovation, Discovery Communications), Mark Gall (Chief Revenue Officer, Alphonso), Vikram Somaya (SVP, Global Data Officer, ESPN) with Mike Chapman (Managing Partner, Accenture Strategy) moderating.
For anyone seeking a better understanding of how TV networks are moving beyond purely demographic-based targeting, the session offers a ton of insights.
Watch the video below (33 minutes, 23 seconds).
I'm pleased to present the 290th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.
On this week’s podcast we do an in-depth Q&A with our guest Lee Berke, who runs LHB Sports, Entertainment and Media, Inc. Lee has helped dozens of teams create and implement sports TV networks. He has a wealth of insights into the role of sports in pay-TV and how online and mobile video are causing leagues and teams to adjust their traditional distribution strategies.
Sports are a key driver of increased pay-TV rates and as VideoNuze readers know, I’ve been writing for years (examples here, here, here) about the billions of dollars non-fans pay each year in the form of a “sports tax” - subsidizing expensive sports networks they never watch. With the advent of robust, inexpensive OTT entertainment programming options, the pay-TV multichannel bundle has come under more pressure than ever, with subscriber losses peaking in Q2 ’15.
In our Q&A with Lee we explore these issues and how he sees OTT impacting teams, leagues and sports TV networks. Lee believes TV will remain the most significant revenue source in sports for the foreseeable future, but also sees the leagues more aggressively experimenting online to serve a new generation of fans. Lee also describes how he’s advising teams, particularly on how to maintain flexibility and capitalize on new technologies.
Listen in to learn more!
Yesterday, the National Hockey League and Major League Baseball Advanced Media announced a multi-faceted 6-year deal in which MLBAM will pay $600 million to take over distribution and operations of NHL’s GameCenter LIVE and Center Ice online subscription services (including via pay-TV operators), manage all of NHL’s web sites, manage all of NHL Network’s operations (including taking over ad sales) and jointly develop new digital products. As part of the deal, NHL is reportedly getting a 7%-10% stake
in MLBAM, which is also reportedly going to be spun off (finally) from Major League Baseball. (clarification, per MLBAM spokesman, NHL's stake is in BAM Tech, the technology arm of MLBAM)
That’s a mouthful, but what it amounts to is a major expansion in MLBAM’s scope of business, instantly morphing the company from being primarily a provider of technology services supporting rights-holders to being a multi-platform distribution company in its own right. As such, MLBAM may have just become the most disruptive force in sports TV, signaling to every broadcast and cable TV network which has an interest in sports TV - from CBS, ABC, NBC, ESPN and on down the line - that the ground just shifted underneath them. Here’s why.
I'm pleased to present the 284th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.
This week we turn our attention to ESPN, which was prominently in the news on Monday, when Disney CEO Bob Iger stated that he believes it’s inevitable that long term ESPN will be sold directly to consumers, instead of in the traditional multichannel bundle. To be fair though, Iger wasn’t ready to put any timeline on this move, so it’s clearly not happening any time soon.
As Colin and I discuss, there are many online video trends unfolding that make ESPN’s world more complicated. These include a decline in the number of ESPN subscribers over the past few years due to the proliferation of OTT entertainment apps that are diminishing the appeal of the multichannel bundle, pushback by pay-TV operators focused on cost containment and skinny bundles (e.g. Verizon’s Custom TV), the aggressive moves by leagues to roll out their own online-only streaming packages, the wide availability of sports-related information online and more.
We hash out what all of this means to ESPN and where things are likely heading from here.
Listen in to learn more!
Disney CEO Bob Iger was interviewed on CNBC’s “Squawk Box” this morning (see below embed) and offered a surprising long-term vision for ESPN, saying, “Eventually, ESPN becomes a business that is sold directly to the consumer, where there’s an engagement that ESPN will know who their consumers are, will use that information to customize the product to enable personalization, to engage more effectively and offer advertisers more value as well. That’s longer-term. I think there’s an inevitability to that, but I don’t think it’s right around the corner.”
It was the first time that I’ve heard Iger articulate so clearly how he sees ESPN’s future unfolding. Iger made the comments in the context of describing the huge distribution, promotion and consumption changes roiling the media landscape. Iger observed that despite a fall-off in pay-TV subscriptions, he doesn’t see the ecosystem changing significantly in the next 5 years, and that it was impossible for anyone predict with conviction how the media world will look 10 years from now.
I'm pleased to present the 281st edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.
Earlier this week SNL Kagan released an updated forecast of fee increases for pay-TV operators to carry broadcast and TV networks. Using that data Colin modeled what DirecTV’s programming costs would be and how they would translate into higher subscriber rates and lower margins.
No surprise, Colin’s analysis further highlights how expensive pay-TV is becoming. Colin and I discuss how this directly translates into more cord-cutting and cord-nevering given the range of inexpensive, high-quality OTT options.
All of this is happening against a backdrop of kids abandoning TV altogether. That trend was illustrated by new research from Miner and Co. Studio, which revealed that 57% of parents of kids age 2-12 say their kid prefers a device OTHER than the TV to watch video. Worse, almost half of these parents said sometimes as a punishment they take their kid’s device away and instead make their kid watch TV. We discuss the implications. (make sure to watch Miner’s video interviews too)
Listen in to learn more!
I'm pleased to present the 271st edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.
We had recorded last week's podcast just prior to the news that Comcast was dropping its merger bid for Time Warner Cable, so first up this week we share thoughts on why the deal collapsed.
In my view, the perception of the deal transformed from being cable-centric to being broadband-centric, largely due to the rise of online video usage. As a result, Comcast, post-merger, having 57% of American broadband connections under the new 25 mbps definition, became a sticking point (never mind that it actually has 56% on its own, reflecting its aggressive broadband infrastructure upgrades).
This is a key irony of the deal's failure - Comcast has invested billions in technology, but its woeful customer service ultimately undermines these investments and defines its reputation. In a hypothetical world where Comcast was a "most admired company," (like Apple, Amazon, etc.), I think it's quite possible regulators would have actually welcomed the Time Warner deal.
We then turn our attention to Verizon's "Custom TV" packaging and ESPN's lawsuit. As I explained in Has Verizon Put ESPN Into a Public Relations Headlock Over Opaque "Sports Tax?" I think Verizon is making a brazen move to reign in sports costs. Colin and I agree it's the most startling thing yet to happen in a tumultuous year for the pay-TV industry.
Listen in to learn more!
We've seen a lot of surprising moves in the pay-TV industry in 2015, but at the top of the list has to be how Verizon is trying to put ESPN into a public relations headlock with its new "Custom TV" packaging plan.
If you haven't been watching this closely, Verizon announced "Custom TV" last week. Under the plan, Verizon FiOS subscribers can take a base package of 45 channels, including the 4 broadcast TV networks, for $54.99 per month, and get 2 "channel packs" which are smaller groups of genre-based such as lifestyle, Entertainment, News & Info, Sports, etc. Additional channel packs are $10 per month.
So-called "skinny bundles" of TV networks face long odds of success given the dispersion of actual TV viewership, cross-ownership of broadcast-cable TV networks by media conglomerates and underlying economic realities, according to a new analysis by MoffettNathanson.
The conclusions align with points I made in last Friday's podcast and previously, as I've asserted that the "Swiss cheese" channel lineups found in skinny bundles will lack broad appeal. This was a central finding from recent Bernstein research as well. Conversely, bulking up channel lineups with more TV networks (as Sony has done with its new PlayStation Vue service) eliminates the opportunity for a cost-savings value proposition that would resonate most with would-be cord-cutters or cord-nevers.
Sling TV has received an enormous amount of attention since being announced last month at CES. Some hyper-enthusiastic observers have heralded Sling TV as a sign that traditional pay-TV is on the verge of crumbling. But, having now spent some time with Sling TV, I think a more accurate assessment of Sling TV is that it is fundamentally an old school linear TV service, modestly freshened up with a new online wrapper. In its current form, Sling TV looks very unlikely to gain much traction.
I'm pleased to present the 235th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.
First up this week, Colin recaps how well the recently wrapped-up World Cup did with live-streaming. As Colin notes, the final game delivered 1.8 million concurrent live viewers. Also interesting was how mainstream streaming mid-day games seemed to become. Unlike March Madness games, which have always been streamed in the workplace somewhat surreptitiously, World Cup streaming seemed completely acceptable.
Continuing our sports theme, we then turn to a WSJ article this week which revealed that the NBA is seeking to double the approximately $930 million per year in TV rights fees it receives from Disney/ESPN and Time Warner/Turner when these deals expire after the 2015/2016 season.
If the NBA were to succeed, and gain $2 billion or so in fees, that would translate into around $20 per year for each of the approximately 100 million U.S. pay-TV subscribers (even more when you factor in the pay-TV operator's retail margin).
The dirty little secret of these super-expensive sports deals is that ALL subscribers pay - whether you're a fan or not - meaning the "sports tax" on non-fans is getting bigger all the time. With escalating pay-TV bills, the big question is whether non-fans will become heavier cord-nevers and cord-cutters.
Listen in to learn more!
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ESPN has reported a slew of viewership data for the 2013 college football season across both traditional TV and digital platforms. Of note, WatchESPN recorded a 20% increase in average live game usage vs. 2012, to 32,000 live unique viewers. Though that's a healthy increase, the incremental viewership WatchESPN represents is still quite small compared to TV viewing. ESPN said that its networks averaged nearly 1.9 million viewers for the 254 regular-season games that were broadcast. Across all of its networks, a total of 189 million people watched games.
Yesterday's VideoSchmooze drew 230+ attendees for a full morning of deep dives into the hottest topics in the industry. One of the sessions focused on mobile video and featured executives from ESPN, PBSKids and VEVO, which are already achieving huge mobile viewership, plus technology provider Beachfront Media, which is powering many popular mobile video apps. While I was moderating, my partner Colin Dixon took notes and he shares his observations below.
Mobile Video Experts Share Insights at VideoSchmooze
by Colin Dixon
At the VideoSchmooze event in NYC Tuesday I sat in on a panel moderated by my podcast partner, Will Richmond, entitled Mobile Video Rising. And according to the panel participants, it is rising indeed. We were treated to a host of eye-popping data showing just how far video to tablets and smartphones has come.
Damon Phillips, VP of Watch ESPN and ESPN3, said that two thirds of smartphone viewing occurred outside of the home. This is very different from other data I heard in June of this year that said that 64% of smartphone viewing and 82% of tablet viewing occurred in the home. Mr. Phillips went on to say that he was very surprised at the length of time people watched. On a smartphone, 15 minute viewing periods are common, while tablet viewing can go the whole length of a game. With respect to the smartphone, this led Mr. Phillips to comment that ESPN targeted shorter subject matter at the devices. The long viewing times on tablets, however, suggest it is being used as a TV replacement.
AOL has scored a huge coup with a deal announced today to syndicate ESPN video content across its owned-and-operated sites, plus its distribution network of 1,700 publisher sites. ESPN video in AOL will be accessible on desktops, smartphones, tablets and connected TV devices.
Importantly, the deal underscores the allure of online video syndication. By choosing to syndicate through AOL, ESPN concluded - despite its already formidable presence as the top-ranked sports property online - that AOL's distribution network could provide still further online reach and monetization potential. That's no small statement, and it is a testament to both AOL's video growth over the past several years and to the strength of the "Syndicated Video Economy" concept I began talking about back in 2008.
I'm pleased to present the 194th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia. First up this week we discuss CBS CEO Leslie Moonves' remarks on CNBC essentially declaring victory in the company's retrans dispute with Time Warner Cable because it had preserved its ability to license its programs to Netflix and Amazon. Listeners will recall that 3 weeks ago on the podcast we talked about how OTT licensing was at the heart of the dispute and the consequences for TV Everywhere.
Next we transition to questioning whether there's any real benefit for TV networks and pay-TV operators to stream linear channels to connected TVs. Colin observes that recent data from the BBC indicating very low levels of linear streaming on connected TVs appears to question the value of the Disney-Apple TV and Time Warner Cable-Xbox 360 deals. We speculate that these are mainly meant for 2nd or 3rd TVs that don't have pay-TV set-top boxes.
Last, we chat briefly about the massive 3-part series that the NY Times ran just before Labor Day on ESPN's dominant role in college football - a long, but fascinating read. As I wrote, it's well worth the time for anyone interested in the influence of big time TV money not only on college sports but also on the broader American higher education system.
Click here to listen to the podcast (17 minutes, 41 seconds)