Content being used to drive consumer purchases isn’t a new idea, but streaming is breathing renewed interest, with a variety of different strategies and implementations. A number of interviews and articles illustrating the trend have recently caught my attention.
Given its commerce, content and technology capabilities, Amazon is primed (pun intended) to be a major player. In an interview at IAB’s Annual Leadership Meeting a couple of weeks ago, Amazon Studios’ COO and Co-Head of Television Albert Cheng talked at length about how the company is using its Prime Video app on certain connected devices, along with its “X-ray” feature, to enable seamless viewer transactions. Albert highlighted successes the company has had with Rihanna’s “Savage x Fenty,” Heidi Klum and Tim Gunn’s “Making the Cut” and NFL Thursday Night Football.
At its ONE21 developer conference this morning, NBCUniversal announced plans to launch its NBCU Audience insights Hub, which will contain all of its first-party audience data. The “proprietary data clean room” will give authorized partners permission to run restricted queries across their and NBCU’s audience data without exposing users’ personally identifiable information.
Using the NBCU data, partners will be able to discover overlaps in their audiences to drive better targeting and cross-platform campaign planning. Partners will gain access to NBCU’s linear TV APIs and certified reach measurement models to improve efficiency and effectiveness. NBCU plans to add to its measurement capabilities so that partners can do their own self-service multi-platform attribution. The clean room framework is being powered by Snowflake and VideoAmp is the first measurement partner to be integrated.
The Wall Street Journal is reporting that the fees CBS, Fox, NBC and ESPN each pay to broadcast NFL games will double or more in new long-term agreements currently being finalized. Once again we are presented with the incongruity that sports rights are escalating even as the pay-TV subscriber audience able to watch these networks is shrinking.
As the Q4 earnings season wrapped up, the contraction of pay-TV was again in the news this week as analysts tallied the final losses for 2020. MoffettNathanson pegged the subscriber loss in 2020 among traditional cable, satellite and telco operators at approximately 6 million, with virtual operators (e.g. YouTube TV, Hulu, etc.) offsetting it by adding approximately 2 million subscribers.
I’m pleased to present the 532nd edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.
This week we dive into some of the key data from NBCUniversal’s new Cross-Platform Consumption Report, which revealed that for its entertainment programming, 76% of viewing by 18-34 year olds is now done on-demand. For 35-49 year olds it’s 69% and even for 50 year-olds it’s 50%.
The report points out that connected TVs have become the fastest growing device for consuming on-demand content. Colin and I see this only accelerating and we also discuss new CTVs that have been unveiled in the past week by Amazon, Roku and Google (Chromecast). The consumer experience keeps getting better and for $50 there are multiple solid choices.
Click here to listen to the podcast (24 minutes, 50 seconds)
I’m pleased to present the 523rd edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia. As always we wish our listeners all the best and hope everyone is staying well.
Peacock launched nationally this week and Colin and I are both impressed. The user experience and value proposition to advertisers are both strong. As more library and original content is added, it’s only going to get better. However, Peacock’s distribution is currently limited without deals with Amazon Fire TV and Roku, which is why Comcast’s own Flex device is critical. Peacock is also entering a highly competitive SVOD/AVOD market; it is poised to play a lot of different roles for NBCU and Comcast.
Listen in to learn more!
Click here to listen to the podcast (25 minutes, 59 seconds)
Peacock launched broadly yesterday, though as a Comcast Xfinity broadband subscriber, I’ve had access to it for several months using my Flex device. I’ve spent a bunch of time with it and have been quite impressed. That the Peacock team put it together during the pandemic is quite a feat.
Some of the highlights to me are the very strong UI, the comfort food of popular programs like ’30 Rock,” “Parks and Rec,” “SNL,” and others, plus plenty of movies, the modest ad load of 5 minutes max per hour and the “Channels” which are about 30 virtual linear networks sorted into a traditional program grid.
As I’ve spent time with Peacock and followed the pre-launch coverage it’s become apparent how many different roles Peacock is poised to play for NBCU and its parent Comcast. Here’s a quick rundown:
NBCUniversal used its One Industry Update livestream to emphasize that improving the viewer and advertiser experience remains a top priority. Laura Molen, President, Advertising Sales and Partnerships, said “this moment has only accelerated our efforts to make the ad experience more engaging for consumers and more effective for advertisers.” She continued, “I know we talk a lot about commercial time - and we’re still committed to bring that number way down.”
Now that NBCU has revealed its launch plan, pricing and forecast for the Peacock streaming service, some quick math shows how much Comcast missed out on by not buying out Disney’s stake in Hulu. VideoNuze readers will recall this is what I proposed back in May 2018 (“Why Comcast Should Take Control of Hulu”) when Comcast and Disney battled to take over Fox. With Disney and Comcast each owning around 30% of Hulu at the time, as well as Fox owning around 30% and AT&T 10%, it was clear that whoever ultimately bought Fox would assume majority ownership of Hulu.
At the time I articulated all the reasons why, as part of any deal Comcast might make to step away from Fox, it should negotiate to take control of Hulu. Instead Comcast prioritized Sky (which it ultimately bought for $39 billion) and made a subsequent deal with Disney to sell off its Hulu stake. Disney also acquired AT&T’s approximately 10% stake in Hulu, making it Hulu’s 100% owner. Taken together, the moves make Disney CEO Bob Iger look like a genius, even if Disney was overcoming a late entry into the streaming party.
Comcast could have likely acquired the 70% or so of Hulu it didn’t own for around $13-15 billion, based on the $5.8 billion Disney ended up paying Comcast for its 30% share (Comcast also has an upside based on Hulu’s valuation in 2024) Comcast could have done this in reverse. All of this is assuming Disney would have sold its share to Comcast. My hunch is there was a deal to be had if Comcast had said it wouldn’t bid up Fox’s valuation, in turn saving Disney billions of dollars. All in all, it would have been a very modest deal for a company Comcast’s size.
I think all of my original reasons why Comcast should have acquired Hulu still stand up pretty well a year and a half later. But now some quick math also reveals that acquiring could have generated nearly $6 billion/year for Comcast and NBCU and the springboard it could have become for Peacock, before even factoring in cost savings. I suppose it is worth keeping in mind that had the deal gone the other way, Comcast wouldn’t have received the $5.8 billion for its share in Hulu, but then again Comcast didn’t need the cash, so does that really matter?
In my view there are 5 key things to understand, 3 that relate to subscription revenue and 2 that relate to advertising revenue.
This afternoon at 4pm ET, Comcast will host an Investor Meeting to share details about NBCUniversal’s upcoming Peacock streaming service. It is a session comparable to what Disney and Apple did last year for Disney+ and Apple TV+ respectively (and what AT&T/WarnerMedia will do for HBO Max). So we all get to learn all the official information about Peacock: pricing, availability, content, overall strategy/fit with existing businesses, marketing, etc.
Following the format of other investor days, we will hear from senior NBCU and Peacock executives, and likely someone from Comcast. Matt Strauss, an old friend of mine, who was moved over from Comcast to become Chairman of Peacock and NBCUniversal Digital Enterprises late last year, will no doubt be the maestro of this afternoon’s session. All the dribs and drabs of information that have been shared by the company previously will be reconciled with all of the rumors and speculation that have gurgled up from around the web.
Last Friday afternoon CNBC reported that NBCUniversal is “leaning toward” making the free, ad-supported version of Peacock, its upcoming streaming service, free, with everyone getting unrestricted access. This would be a change from restricting it to Comcast’s cable and broadband subscribers only, as originally intended. The ad-free version would still carry a fee.
Which direction Comcast decides to go will say a lot about whether it sees Peacock’s primary role as helping Comcast grow and defend its core cable/broadband business, or having NBCU become a bona fide competitor in the “streaming wars” developing with Netflix, Amazon, Disney, WarnerMedia, Apple, etc. How should Peacock’s value be optimized - by restricting access to serve the Comcast’s cable/broadband business, or to be guided by the market and help NBCU build Peacock into a large OTT business?
NBCUniversal’s SVOD service will be known as “Peacock” and will launch in April with over 15,000 hours of content. As expected, classic shows like “The Office” and “Parks and Recreation” will be exclusively on Peacock, along with “30 Rock,” “Cheers,” “Frasier,” “Will and Grace” and numerous others.
Peacock will be available both ad-supported and ad-free, though NBCUniversal didn’t announce any pricing just yet (Peacock will be included at no charge for Xfinity subscribers). SVOD pricing has been under pressure since Disney announced initial Disney+ pricing at $6.99/month, with Apple TV+ following at $4.99/month. HBOMax is likely to be at the high end around $14.99/month.
Perhaps the most noteworthy thing about Netflix’s solid Q4 subscriber growth was the company’s ongoing success with a pure ad-free subscription model. Netflix is becoming even more unicorn’ish among big video providers in completely eschewing ads. Virtually every other major video provider (aside from established premium TV networks like HBO, Showtime, etc.) is reliant, at least in part, on advertising (Amazon’s ad-free approach gets an asterisk because of the outsized role Prime/free-shipping still plays - and even Amazon is now integrating ads in various ways, see below).
In fact, though we’re barely a month into 2019, there are signs everywhere of advertising’s growing role in the future of the video industry.
Consider just the following:
I’m pleased to present the 451st edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.
First up this week we talk about Sling TV’s new initiative to promote third party SVOD services, including to consumers who aren’t subscribers to its underlying virtual pay-TV service. Colin and I differ about its potential and whether Sling TV has “permission” to pursue this. We debate the upside of a separate new Sling TV initiative to provide a layer of free on-demand content. We also dig into Hulu’s new emphasis on SVOD aggregation which seems promising to both of us.
We then shift to discussing NBCUniversal’s plan to launch its own direct-to-consumer (DTC) service for non pay-TV subscribers. Colin is somewhat underwhelmed, while I think it’s a step in the right direction and too early to tell how aggressive the offer will turn out to be.
Less than 3 weeks into the new year, it’s clear that big video providers are continuing to experiment and jockey for position.
Listen in to learn more!
Click here to listen to the podcast (24 minutes, 53 seconds)
Last Friday, NBCUniversal officially launched WatchBack, an iOS-only video app that’s meant to gather data on viewing behaviors while offering users a broad range of content and the opportunity to win weekly sweepstakes. It’s an intriguing new spin on how content providers can mine value from direct-to-consumer apps in order to optimize their programming.
I spent a little time with WatchBack and found it to be easy to use with a variety of content providers and programs to choose from. Upon opening the app for the first time, I was asked to register, primarily so I could begin participating in the weekly sweepstakes. However I was able to proceed without registering, though I was required to select my 3 favorite genres, so WatchBack could start recommending content.
A critical challenge facing video providers is how to balance distribution of their content on platforms vs. on their owned & operated properties. At the recent VideoNuze Online Video Ad Summit, we dug deeply into this topic in a session featuring Trevor Fellows (EVP, Digital Sales and Partnerships, NBCUniversal), Paul Kontonis (Chief Marketing Officer, WHOSAY Viacom), Blake Sabatinelli (CEO, Newsy E.W. Scripps) with Lorne Brown (CEO, Operative) moderating.
Each of the panelists did an excellent job articulating the specific benefits they seek out in platform deals such as incremental reach, enhanced branding and stronger monetization. They talk about how platform distribution deals work and why advertising is central, the role of data and demographic fit, why producing compelling, premium content is paramount, how they choose to allocate finite resources among various platforms and why scale matters so much, among other topics.
For anyone considering how to monetize video everywhere, while maintaining a strong O&O presence, the session is really valuable.
I’m pleased to present the 409th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.
On this week’s podcast we dig into NBCUniversal’s decision to reduce the number of ads in commercial pods by 20% and ad time by 10% across all its networks in prime time. Colin and I agree that it’s a clear recognition that the traditional TV ad experience isn’t sustainable for viewers or advertisers.
But how the move will ultimately work out for NBCUniversal isn’t clear. Colin is skeptical that the math is going to add up, citing larger industry headwinds, such as Netflix’s massive content investments, that will keep depleting TV audiences. While the challenges are steep, TV does have certain inherent advantages and the move is a start in the right direction. It will be fascinating to see how things unfold.
Listen in to learn more!
Click here to listen to the podcast (24 minutes, 6 seconds)
Yesterday, NBCUniversal announced plans to reduce the number of ads in commercial pods by 20% and reduce ad time by 10% across all its networks in prime time. The move will almost certainly meet its goals of creating a better viewer and advertiser experience. But an overarching question is whether it will ultimately benefit NBCUniversal and the broader TV industry? The answer to these questions lie in whether NBCUniversal can make the math work on fewer ads and less ad time.
Obviously it’s a risky move for any business to reduce the quantity of what it sells, betting that customers will be willing to pay more for a scarcer resource. But basic laws of supply and demand are in NBCUniversal’s favor: when supply is reduced, then even at constant demand, prices should rise.
Our afternoon keynote interview at the recent SHIFT // Programmatic Video & TV Ad Summit was with Mike Rosen, EVP, Portfolio Sales and Strategy, NBCUniversal. Mike was interviewed by Matt Prohaska, CEO and Principal, Prohaska Consulting and shared a fantastic insider’s look at how the TV industry is evolving.
Mike discussed a range of topics including how NBCUniversal has organized itself around audiences instead of verticals with content a key focus, how he defines the term “programmatic,” why data comes up in every single meeting and how it feeds NBCU’s optimization platform, what the “new” currency is and the challenge of giving up legacy approaches, which industries are adopting custom segmentation approaches first, how to overcome attribution challenges and much more.
Watch the session video now!
I’m excited to share that Mike Rosen, EVP, Portfolio Sales and Strategy, NBCUniversal and Jon Stimmel, Chief Investment Officer, Universal McCann, will be our keynote speakers at our 3rd annual SHIFT // Programmatic Video & TV Ad Summit on Wednesday, November 29th in NYC.
Mike will be interviewed by Matt Prohaska, CEO and Principal of Prohaska Consulting, focusing on how NBCUniversal is innovating with programmatic. NBCUniversal has moved aggressively to enable ad buyers to use data and technology to buy its inventory. It most recently announced Target as its first self-serve programmatic client for national inventory, powered by 4C Insights. In addition to discussing NBCUniversal’s own efforts, Mike will address how TV networks can embrace programmatic to compete more effectively.
Jon will be interviewed by Matt Spiegel, Managing Director, Marketing & Technology Solutions at MediaLink about how UM is driving clients’ business outcomes with automation and data-enablement for video and TV ad buying. Jon will also address more broadly how programmatic is impacting agencies and what they should be doing to adapt and succeed.
Mike’s and Jon’s keynote sessions highlight a jam-packed day of exciting sessions covering all aspects of programmatic video and TV. I’ll be posting the full SHIFT program shortly.
Early bird registrants save $100, with all eligible to win one of three Roku Ultra 4K Streaming Players. Further discounts are available on 5-packs and 10-packs. Startups and students can register for a reduced $245 ticket (contact me for the code).
I hope you’ll join us for this must-attend day of learning and networking!
Learn more and register now!
NBCU is enabling clients to buy national TV ads using a self-serve programmatic TV approach. The new private market arrangement is powered by technology provider 4C. NBCU already works with AOL, TubeMogul and Videology to enabling programmatic buying of its ad inventory. The first client using the self-service approach is Target, which will be able to meld its first-party customer data with NBCU’s own audience data to target certain viewers with ads.
Target’s agency of record is GroupM’s Essence, which is where Adam Gerber, formerly SVP of Client Development and Communications at ABC, was recently appointed SVP of Investment for North America.