VideoNuze Posts

You would have to have had your head buried in the sand these past few months not to notice that Amazon has become the “it” company everybody can’t stop talking about. Whether buying Whole Foods, innovating its Echo smart speakers, challenging Blue Apron in meal kits, introducing its own Geek Squad to compete with Best Buy or countless other initiatives, all of a sudden Amazon seems to be omnipresent. And with an estimated 80 million Prime members, Amazon is in fact now literally present in many people’s day-to-day lives.  

Amazon has what it calls “pillars” (Prime, e-commerce, cloud, etc.), and it’s becoming clearer by the quarter that video is fast becoming another one. In video, the company’s efforts are wide-ranging - devices (Fire TV), original content (which is included in Prime and on which it is spending billions), licensed content (also in Prime), live sports (with its NFL Thursday night deal), SVOD distribution (via its Amazon Channels program for 3rd party and original services), digital video premieres (with its Amazon Video Direct program), international (expanding its own SVOD service to 200+ countries) and technology enablement (with AWS and acquisitions like Elemental). In sum, Amazon is already operating in virtually every part of the video value chain.

Despite all of this, I believe that Amazon’s video efforts are still completely under-appreciated. With a number of industry trends coming into view, Amazon’s video momentum could significantly increase and carry it straight into the heart of the pay-TV industry.

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I’m pleased to present the 381st edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

This week we discuss both Comcast’s and AT&T’s Q2 ’17 video subscriber results, which were dramatically different, and what we see as the implications.

First, Comcast, lost 34K residential video subs in Q2 ’17, as compared with losing just 4K in Q2 ’16.  Colin and I differ in our interpretation, with him more concerned that Comcast’s streak with X1 has likely run its course. I’m more sanguine because as I look more broadly, over the past 4 quarters, Comcast has managed to turn in exceptional performance in the face of massive cord-cutting headwinds.

By contrast, AT&T’s core video businesses - Uverse and DirecTV - have been hemorrhaging subscribers over the past year, and Q2 highlights how deeply discounted and bundled DirecTV Now is the only bright spot in video for AT&T.  But as I explain, the company’s willingness to all but give away its skinny bundle to preserve its wireless business has potentially profound long-term consequences for the entire pay-TV industry, with Amazon increasingly well-positioned to be a big winner.

Listen in to learn more!
 
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Video ad tech provider Extreme Reach has released its inaugural Benchmark Report for video advertising for Q2 ’17, finding, among other things, that video ad completion rates, viewability and time spent have all increased over the past year. For everyone in the industry, these numbers are encouraging signs that video ads are maturing and resonating with audiences, which will in turn help drive more spending.

Key highlights of the new report include:

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With AT&T reporting its Q2 ’17 results yesterday, the pivotal role that the company’s DirecTV Now skinny bundle is playing in sustaining its wireless business is becoming increasingly clear. It has never been any great secret that DirecTV Now, which now has approximately 500K subscribers, was meant to be bundled with AT&T’s wireless service, but the speed with which it is already contributing to the wireless business is quite noteworthy.

In supporting slides and on the earnings call, AT&T CFO John Stephens repeatedly called out the role DTV generally and DTV Now specifically are playing, particularly in reducing post-paid wireless churn (the type of wireless service most readers of this post have). At .79%, Q2 marked the lowest-ever quarter of post-paid churn.  More broadly, post-paid churn is down 25 basis points since the close of DirecTV deal.

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Niche programming provider ZoneTV has partnered with Microsoft and Ooyala to introduce a set of customizable AI-driven linear TV channels that will be made available in partnership with pay-TV operators using IP-enabled set-top boxes.

ZoneTV will leverage 6,000 hours of video that it has licensed across a number of different content categories to create specialized linear channels. Then, as the viewer consumes the content that has been characterized using Video Indexer algorithms from Microsoft Cognitive Services, a more and more personalized channel is presented for subsequent viewing.

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U.S. adoption of Netflix, Amazon Prime and/or Hulu is up to 64% of homes, an increase from 47% in 2014, according to Leichtman Research Group. Of those who have one of these SVOD services, 51% now have more than one of them, up from 35% in 2014.

On our podcast last week, Colin and I talked about how the number of people taking multiple SVOD services has become a central trend in the industry and is helping spur growth for all providers. Both Amazon’s Jeff Bezos and Netflix’s Reed Hastings have insisted over the years that people will take multiple services, and that appears to now becoming reality.

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I’m pleased to present the 380th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

Earlier this week Netflix reported its Q2 ’17 results, with domestic and international subscriber additions exceeding even the most optimistic Wall St. forecasts. But as Colin and I discuss, it is extremely murky what actually drove the strong performance. In fact, Netflix’s Q2 ’17 varied dramatically from prior years, creating a roller-coaster feel that makes it almost impossible to predict where Netflix is heading next.

Highlighting the confusion is that Netflix management again emphasized the role of its original content in driving the Q2 numbers. Yet independent research just a couple months ago indicated that in Q1 ’17, 85% of Netflix’s U.S. streams were actually licensed content, despite the many billions the company has invested in originals. To top it off, Colin reports that he repeatedly hears industry friends say “there’s nothing on Netflix to watch.”

There’s no question Q2 reinvigorated the Netflix growth story. But what’s behind that story feels harder to understand than ever.

Listen in to learn more!
 
Click here to listen to the podcast (24 minutes, 32 seconds)

Click here for previous podcasts.

Click here to add the podcast feed to your RSS reader.

The VideoNuze podcast is also available in iTunes...subscribe today!

Videology has released its latest Knowledge Lab research report which is focused on first-party data and how it is being used to help target video ads.  Among the highlights of the report are that 25% of video campaign impressions Videology now serves use first-party targeting. Overall, the percentage of video campaigns using first-party data has increased from 5% in 2015 to 11% in the first half of 2017.

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