VideoNuze Posts

USA Today Sports Digital Media and NeuLion have announced a strategic partnership for video syndication and original productions. The deal includes NeuLion College, a network of 170 NCAA sports properties and USA Today Sports' extensive collection of digital sports sites plus Gannett's 120+ local media properties. Dave Morgan, president of USA Today Sports Media Group and Chris Wagner, EVP of NeuLion filled me in on the deal yesterday.

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These are highly uncertain times for global TV manufacturers. As IHS reported last week, sales of TVs declined by 6% in 2013 to 225.1 million units, following a 7% contraction in 2012, creating first ever back-to-back down years for the global TV industry. IHS pinned the blame for the declines mainly on market saturation and difficult economic times.

To rebound from the doldrums, TV manufacturers are betting heavily on consumers upgrading to 4K TV and Smart TVs. 4K, or Ultra-High Definition TV, has significant challenges with content availability, price and picture quality differentiation it must overcome to go mainstream. Meanwhile, although the price premium for Smart TVs has shrunk, bringing them closer to conventional HDTVs, their value proposition is still not widely understood by consumers and access to online content is still very limited.

In this already difficult climate, another challenge for TV manufacturers is now taking shape from a whole new category of devices: low cost streaming sticks.

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The 17 largest broadband ISPs in the U.S. added over 2.6 million subscribers in 2013, down almost 105K vs. the approximately 2.7 million subscribers they added in 2012. These ISPs now have 84.3 million subscribers, with cable TV operator ISPs having 49.3 million (58%) and telco ISPs having 35 million (42%). The data comes from Leichtman Research Group.

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The U.S. pay-TV industry lost 105K video subscribers in 2013, the first time in history that the industry has contracted on a year-over-year basis. The industry ended 2013 with approximately 94.6 million subscribers vs. 94.7 subscribers at YE 2012. The 105K loss is a swing of 280K vs. the 175K the industry gained in 2012. (see chart below)

The data comes from Leichtman Research Group, which has tracked the top pay-TV operators' video subscriber numbers for years.

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I'm pleased to present the 218th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia. Both of us have continued to observe signs of how online video is coming of age, and today we discuss some of them.

We start with news that Comcast will begin selling episodes of "House of Cards" in its Xfinity online store. Putting aside the question of why someone would buy an episode for $1.99 when they could binge-view all 26 episodes in a month for $7.99, both of us thought it's noteworthy that the largest cable operator believes an online-only series is worth selling (and note too, the deal was done with Sony Pictures, and that Verizon also has been selling the series).

Then there was the report that Disney might acquire Maker Studios, a pure-play online video / YouTube content provider. While Colin and I get a chuckle out of the idea that the Disney flag could fly over Epic Rap Battles and PewDiePie, we agree it would be a smart bet to gain reach into the all-important millennial segment.

Then we turn to the $18 million investment by Warner Bros. in Machinima, an online video gamer-centric content creator also targeting millennials. The 2 companies already had a successful collaboration with the "Mortal Kombat: Legacy" web series. No doubt the new investment will spur more gamer-centric originals for distribution by Warner Bros.

We wrap up by discussing just how important millennials are to the video's future. Recent data suggest this group is still pretty glued into the pay-TV ecosystem, but their behaviors are changing fast, in turn leading established media companies to focus on online video more than ever.

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According to data from ad management platform company Vindico, interactive video ad impressions are up 77% from a year ago. It also found that on average, brands can expect a nearly 3x engagement lift when utilizing interactive ads vs. repurposed TV ads.

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As people splinter their video viewing across multiple devices, reaching them across screens  with video advertising has become has become a growing imperative. Still, TV is tried and true, and the tools for planning, managing and measuring cross-screen campaigns are not yet widely understood.

To help illustrate early success of cross-screen advertising, Videology has published 4 case studies on different clients who augmented their TV campaigns with online video buys, resulting in significant improvements to audience reach, brand awareness, offline sales and market share.

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