Jun 30, 2015

USA Hacks Into Netflix's Formula With Mr. Robot

Originally published at TV[R]EV on June 30, 2015

A clandestine group of hackers takes on an evil corporation, breaking into emails and rooting through their files. That’s not the latest headline getting buzz on Twitter, but rather the plot of Mr. Robot, a new sci-fi series that just launched on USA Network. What’s newsworthy though is not so much the big-budget, multi-touch campaign the network used to launch they new series—but rather where they chose to launch the series and the audience they chose to target.

There were seven main beats to the interactive campaign, each one building on the first. What’s notable about all of them is that they didn’t run on TV, but rather online or as guerrilla tactics. USA’s plan seems to be to go after the long tail, to create devoted viewers who will watch the show online, via VOD or a streaming service. Purposely ignoring the high-Nielsen number premier is a bold move, but one we think was very warranted here. It’s also a road map for how shows might go about building the sort of hardcore involved audiences that are necessary for success in the new world of television. It’s a tactic Netflix more or less invented, and we’ve been wondering when the cable and broadcast networks would take it up.

Jun 25, 2015

Live on NPR's Morning Edition

I am on NPR's Morning Edition show this morning with Ned Ulaby, talking about YouTube, Vessel and Facebook video.

You can read the article at NPR.com

or listen to the segment here:

Jun 22, 2015

Time Is Running Out For The 30-second TV Commercial

interior clock face tower
Time will soon be called on the traditional 30-second television spot. Photograph: Charlie Riedel/AP

Originally published at The Guardian on June 22, 2015

The 30-second television commercial, once a cultural touchpoint, has lost its relevance in today’s world. It’s doomed to be relegated to the dustbin of 20th-century artefacts, right up there with cassette players and dial telephones.
TV commercials had their heyday in the 1960s when people had a surplus of time, particularly in the evenings after work. There were no emails, text messages or social networks to keep up with. Work and life had distinct boundaries, and TV was limited to a handful of stations that only broadcast during certain times of day.
Commercials were a part of the TV experience, a window onto the new world of packaged goods, automobiles and airline travel. They were an efficient way to learn about these products without having to get up from the couch.
The result of all this is that TV commercials feel like relics of a simpler era, one where the entire family gathered around the TV set each night to watch a limited set of programming without the ability to pause, fast forward, rewind, check Facebook, check Twitter, look something up on the internet or send a text message. They certainly don’t feel like 2015, and statistics indicate that viewers are assiduously avoiding them.
study last year by Arris showed that 84% of respondents wanted to fast forward through the ads they watch, while 60% of them download or record shows so they can skip commercials. Even Super Bowl ads have lost their effectiveness: a 2014 study showed that 80% of them do not increase sales for the companies running them.
The increased use of smartphones and tablets also detracts from TV commercials’ relevance. Last month, researchers found that viewers who focused just on the TV screen were able to recall 2.43 out of every three brands mentioned, while smartphone and tablet users only managed to recall 1.62 on average.
Thanks to the internet, advertising’s even losing its role as an information source: A study by Mindshare earlier this year showed that the percentage of Americans who said advertising helped them learn about products and services dropped from 52% in 2005 to 41% in 2014.
So then, what sort of brand message is appropriate today? What can a brand do to get its message across to consumers in this new media environment without giving up the massive reach that TV commercials can bring?
The answer isn’t yet clear, but one place to start is branded content or native advertising. By sponsoring programming the viewer might want to watch purely for its entertainment value, the brand message does not feel quite so onerous. The emphasis here is on entertainment and on adopting the voice of the site, or the network the programme is showing on. The brand message is not buried, but it’s not front and centre either – a compromise many marketers still struggle with. Branded content and native advertising has proven effective online, such as on Buzzfeed, and there’s no reason to think that it won’t effectively translate to TV, where viewers will actively engage with it, versus the passive experience they have with old-school TV commercials.
Another option is to come to terms with the fact that many (if not most) viewers are watching TV on their own schedules and to start treating shows like in-cinema movies. That means limiting advertising to pre-roll ads only, where it’s less likely to be perceived as annoying or interruptive since it comes on before the viewer has had a chance to become involved with the show. It can even be followed up by a page on the show’s website that has a list of “sponsors” (which sounds better than advertisers), with links that allow the viewer to have a deeper engagement with the brand, anything from downloading coupons to watching a demo to straight-up e-commerce. 
TV commercials won’t disappear overnight – they’re still far too effective – and they won’t disappear for all the usual ”TV is dead, the internet is king” reasons. They’ll disappear because the modern consumer no longer has the patience to sit through a four-minute pod of eight 30-second sales pitches. As a result, their effectiveness will slowly wither away, leaving them as artefacts for historians as they study the latter half of the 20th century.

AdBlocker Blockers: Treating The Symptoms, Not The Cause

Originally published at TV[R]EV on June 22. 2015

A hot topic this past week has been the growth of new ad blocker blockers (that’s not a typo—we’re talking about software that blocks ad blockers and stops them from working.) Given the impact of ad blocking software, it’s sure to be a hot topic along the beaches of Cannes this week, particularly among ad tech types.

Ad blockers are big news because the number of people using them is both huge and rapidly growing. As with most things tech-related, there are conflicting stats, but a recent study by Reuters showed that 40% of UK internet users utilize some form of ad-blocking software, while an Adobe/PageFair study conducted in the US, showed that number at 28%, with a 69% year-over-year increase. Even more troubling, 41% of the more tech-savvy 18-29 year old cohort were using ad blockers. So figure the number is somewhere between the two and factor in mobile, where Apple allows adblockers to run on iOS.
The answer, the industry hopes, is in the invention of anti-ad blockers, software that sounds as if it’s stepped right out of Dr. Suess’s Sneetches tale, that prevents the ad blockers from working. Buzz last week was around Sourcepoint, an ad blocker-blocker from ad tech vet Ben Barokas whose Sourcepoint just raised $10 million in Series A funding.
From where we’re sitting, few things could be as counterintuitive as ad blocker blockers. Forcing users to sit through ads they thought they were avoiding doesn’t exactly lead to good will. And how long till a virtual arms race breaks out as the ad blockers come up with ways to bypass the blocker-blockers, who’ll then roll out an update that stymies the blockers, and so on and so on.
The way to stop users from turning to ad blockers, to paraphrase my colleague Jesse Redniss’s recent answer to similar question, is to make ads people don’t want to avoid. And while that sounds like common sense, you’d be surprised at how difficult that is for most brands.
Or maybe you wouldn’t be.
Most of the online advertising we want to avoid is interruptive advertising: we’re online to do something in particular and we just don’t have time to listen to yet another brand’s sales pitch. The more we can avoid that sort of advertising, particularly if it pops up, rolls over or takes over the page, the better life is. Native advertising and branded content, particularly the #CreatedWith variety, are another story. Users will engage with those because (if you remember therules laid out here by Andy Marks last week) they are first and foremost entertainment. Not sales pitches.
So even if the user doesn’t want to engage with these units right away, they don’t want to block them either. This is content they might want to watch, certainly something they are not rejecting out of hand and if it interests them they will engage.
And that is how you eliminate the need for ad blockers. For as our friends in the medical field have learned, it’s far more effective to treat the cause than to treat the symptoms. Something the ad tech community ignores at its own risk.

Jun 15, 2015

A Field Guide To Networks and Studios

Vox had a great story last Friday about how Netflix doesn’t own any of its own shows—they’re all the property of the studios who made them.

This seemed to confuse a lot of people, while at the same time engendering a conversation among TV insiders about how little understood the notion of studio ownership was, particularly among the sort of tech blogger who lives to proclaim the death of television.

So, a little enlightenment.

Most networks do not make their own shows. (There are exceptions.) They buy their shows from studios like Sony and Lionsgate, who put up all the money for the production costs and for making the pilot. (Most of the time. There are, on occasion, exceptions, particularly when a big name star is involved.)

Now I bet you’re wondering why the networks do this, because it seems like making TV shows is the fun part of the business. And the answer is a four-letter word: Risk.

Most TV shows fail. Most pilots don’t get made into TV shows. Most scripts don’t get made into pilots. You see the pattern here? While it’s fun to work on a successful TV show, the vast majority of TV shows aren’t successful and they cost millions of dollar to make (even a pilot will cost millions of dollars) so if you’re a network executive, you may not want to take on that amount of risk, particularly since production is not your forte.

Take Netflix. They get to pick and choose among the best shows the various studios have come up with without putting any initial skin in the game themselves. They’re often bidding for these shows against competitors like HBO and Amazon and that may cause the price to be higher than it would have been if they’d made the series themselves. But in their minds, that’s okay, because it’s still less than what they would have lost if they’d made a pilot and it flopped.

So then why do the studios do it? If it’s so risky and there are so many flops, why bother?They do it because there is a huge potential upside. A hit series can be worth hundreds of millions of dollars for everyone involved: actors, writers, producers, studio executives. And while hit series are not the rule, there are enough of them that they are not the exception. For the studio, there is money to be made from selling rights to streaming services like Netflix, from DVD sales, from syndication and from overseas rights. That money—which can be in the hundreds of millions of dollars—does not traditionally go to the network that airs the show (there are, as always, the occasional exceptions), and successful studios and production companies are able to stay afloat (and then some) by successfully intuiting which shows are going to be hits and running with them.

As we’ve said, it’s a very complicated business.
Why bother with the networks at all?

That’s an excellent question and one we’ve been hearing a lot the past year or so. The answer is marketing and promotion. The networks spend millions to market and promote the shows they air because the more people who watch the show, the more advertising revenue the network brings in. If a lot of people are watching a show, it gets renewed again and again and everyone gets rich. The networks are good at promoting shows, even in this age of audience fragmentation, and they’re a safe bet.

That said, there’s been talk (and to date, it’s just that—talk) about putting together a show with top-notch talent and a name director, all of whom have large social media followings, and taking it directly to consumers via a website and/or Roku channel. It’s an idea that might work, but no one’s willing to take a chance on it yet. (“Yet” being the operative word here—as OTT continues to explode, the odds of success will look more promising.)

Everything else is changing, why not distribution?

Twitter Is A Broadcast Network. Not A Social Network. Deal With It.

Dick Costolo started his career at Twitter with one of the classic tweets of all time. He ended with an equally ironic blast, but what happened in between was often not very pretty.
Costolo had something close to an impossible job: take the only social media platform that huge swaths of humanity seemed to actively dislike and turn it into something profitable and long-lasting.

Twitter’s biggest problem has always been the size of its audience, its inability to expand beyond the odd amalgam of media types, celebrities, teenage girls, urban youth, techies and porn stars who make up the bulk of its user base, so that it’s able to attract the sort of mass audience advertisers and data collectors can find on Facebook.

In his defense, Costolo was a very smart guy who made some very clever moves. Chief among them was the decision to launch third party tweet ads.
Dick Costolo
This was a brilliant move because all those people who “hate Twitter” are generally intrigued by what’s trending on the platform, and so the ability to surface tweets from actors, journalists and the like on third party sites (with embeddable, clickable video, no less) promises to be a huge win.

Where Costolo kept getting tripped up however, was in the Attracting New Users department. According to eMarketer, Twitter’s monthly user base will grow 14.1 percent this year, down from 30 percent growth two years ago, with a projected user growth rate of just 6 percent by 2019.

We all know why that is, and yet so few of the Silicon Valley crew are willing to say it: You need a certain type of personality to feel comfortable tweeting. It does not come naturally to most people. And more importantly, it never will. Posting on Twitter is the internet equivalent of standing up in front of a crowd and giving a speech and that’s just not something most people would do without a compelling reason, like having a gun pointed at their head.

In a heartfelt 8,300 word essay released earlier this week, investor Chris Sacca outlined some ways he felt Twitter could save itself. Some made a lot of sense, like his suggestion that Twitter introduce a live public feed where TV shows could introduce tweets from “the actors themselves, the show’s official account, some parody accounts, hobbyist commentators, and celebrities who are known to be big fans of the show.”

We like this idea, and we liked it when we first introduced it in reference to third party Twitter ads back in February. Which is not to suggest that Sacca plagiarized us, but rather to suggest that it’s such an obvious solution, Twitter would be foolish not to run with it.

Where Sacca trips up however, is in his suggestion on how to get people over their fear of public tweeting. His solution is to ask leading questions like ““Who influenced you the most growing up?”, asking users to comment on controversial articles, or, worse still, asking users to post pictures of their “goofiest ever Halloween costumer.”

And this is why Twitter is in trouble. Because anyone who understands human nature or user behavior (your pick) knows, beyond a shadow of a doubt, that no one is going to respond to any of those suggestions, certainly not when their answers will appear in public. It’s hard enough to get people to respond when the only people seeing their responses are their friends (Facebook). People who regard the whole notion of publicly sharing their thoughts as frightening/ridiculous/egomaniacal are not going to start tweeting pictures of their Halloween costumes. Least of all their “most ridiculous” ones.

What Twitter needs to do is get over the notion that it’s a social network and embrace the notion that it’s a broadcast network. They need to start thinking about viewers, not users. Let the core users provide the content. And figure out a way for other people to see that content, in all its live and immediate glory, without having to sign up for a user account (a viewer account is another story) and/or feel like a loser when they realize they have nothing they want to tweet about.

Twitter is a great platform and we are big fans, but if it keeps trying to be Facebook Lite, it’s going to fail miserably. Double down on the broadcast, on the live, on the immediacy, lay off trying to get people to become “users” rather than “viewers”, and things (Twitter stock among them) may finally start to look up.

 Originally published at TV[R]EV on June 12, 2015 dick costolo on Twitter_ _@anthonynoto I love you too. #dmfail_

Jun 8, 2015

Keeping PeriKat On The Up and Up

In the age of selfies and “citizen journalists,” it seems only natural that live streaming would become a trend. Over the years a number of companies have tried to make personal broadcast streaming a reality, but two newcomers appear to have succeeded: Meerkat and Periscope, the former a startup backed by the likes of actor Jared Leto, the latter a startup purchased by Twitter only a few months ago.

They both burst onto the stage in April during the Floyd Mayweather/Manny Pacquiao fight (known on the interwebs as #MayPac). The reason? Dozens of people were live streaming the $100 pay-per-view broadcast of the fight. Unsurprisingly, HBO and other rights holders were a bit unhappy about these unauthorized broadcasts, and even more unhappy about what they felt was Twitter’s lack of a serious response to their takedown requests.

Many in the industry rolled their eyes at HBO, noting that the shaky, hand-held streams were hardly a replacement for an HD broadcast and that the network was getting all bent out of shape over nothing.

So were HBO and other rights holders justified in coming down hard on Periscope and Meerkat? Or was it, yet again, much ado about nothing? Change is inevitable, right?


A View by Any Other Name

So just how long is a video view? For YouTube, it’s 30 seconds. For Facebook, it’s three seconds; which may well be why the social network was able to grow its daily video view count from one billion views per day in September 2014 to three billion in January 2015, and four billion in April 2015.

This new ‘minimalism’ also extends to digital advertising. To qualify as a view, the Interactive Advertising Bureau (IAB) requires only that “at least 50 percent of the ad’s pixels are visible on a screen for at least two consecutive seconds.

Why am I bringing this up? Good question.

First, it helps make sense of Snapchat’s recent claim that its 100 million users are watching two billion mobile videos a day (about 20 video views a day per user). Second, it provides a cautionary tale of what happens when there are no standards and every platform creates its own metrics, making it impossible to compare apples to apples. (Or even apples to oranges. Although, given the wide variety of methods used by various social platforms to measure video, it is actually more a case of comparing apples to elephants.)


Newfronts and Upfronts Have One Thing In Common-Data

Originally published at TDG Research on May 21, 2015

If there was one common theme from this month’s Upfront and Newfront presentations, it is that the other guys have no idea what they’re doing. That was particularly true when it came to advertising, the raison d’etre of both events.
The MCNs and other online video providers who make up the Newfronts kept hammering home how avidly people watch commercials on their sites, given that they can’t fast forward through them or run to the kitchen for a snack. The networks, on the other hand, spent much of the Upfronts talking about fraud and “viewability,” the implication being that people may not like their 4- minute commercial pods, but at least they’re actually seeing them.

What both sides need to realize is that, by focusing on the other’s negatives, they are only hurting themselves. They’d do much better to point out the things they have in common, as those are far more valuable to advertisers.

The value of video advertising, no matter where it runs, is engagement. It’s an immersive way for a brand to get its message across and it works well to establish an image for the brand (pitching a broad idea – e.g., Pepsi means youth, Nike means sports – versus selling a specific product or service.)


Multiple Pain Points: PromaxBDA Conference Explores The Challenges of Marketing TV Series

Originally published at TV[R]EV on June 8, 2015

The PromaxBDA conference, which is coming up on Tuesday in Los Angeles, highlights just how challenging marketing TV shows has become these days.


Once upon a time, the playing field was pretty level in the sense that there was a stable media environment: People turned on the TV after dinner and left it on until 11PM (10, if they lived in the Midwest.) They watched one of the three major networks and if you wanted to drive tune-in for your new prime-time series, you ran a promo during prime time. Sure there were billboards and print ads and transit posters and all, but promos and PR were the way to go.

Compare that to today’s landscape, where marketers need to navigate a range of outlets, from social media platforms to online to mobile to time-shifted television all in the hopes of chasing a rapidly-moving target called “tune-in,” that may or may not happen at the time the show is first aired and may or may not carry the same commercial load.

Changing viewing habits are hard enough, but then there’s social media, with different platforms playing different roles for different demographics and the marketing team having to make sense of it all while trying to get actors, writers, producers and showrunners to play along. Or at the very least, contribute the occasional tweet.


New platforms like Snapchat make the game even harder, as not only does the marketing team have to get itself up to speed, they’ve then got to go and convince the network executives that the platform is worth spending money on.

PromaxBDA runs for three days (Tuesday-Wednesday-Thursday) at the JW Marriott in downtown L.A. The actor Joseph Gordon-Levitt will be delivering the opening keynote speech. Other featured speakers include Viacom’s Doug Herzog, comedian Tig Notaro, and producer Greg Berlanti, Many of the panels will focus on the challenges of marketing television and other entertainment properties and what to look for in the future.

In what promises to be one of the more popular panels, the Truth Company’s Linda Ong, Hulu’s Jim O’Donnell, TV[R]EV Founder Jesse Redniss, and Giant Spoon’s Alan Cohen will join moderator Frank Radice to explore the latest industry buzzwords and what they mean. Look for some great infographics on here all week around that topic.

Badges are still available from the PromaxBDA website.

Netflix Rising

Originally published at TV[R]EV on June 3, 2015

Not content to disrupt the television industry on several continents, Netflix garnered headlines this week with a couple of surprise moves.

The first was a site redesign that introduced a black background, horizontal cover art and easier scrolling. The point, according to Navin Prasad, Netflix’s lead product designer was to make the site feel less like a video store. While the screen shots we’ve seen (SEE BELOW) indicate a sharp looking redesign, what’s significant here is that they’re bothering to do a redesign at all: the site is already notably prettier and more functional than its competitors and we have not heard much (any) consumer whining about the layout.


Which is exactly when you should do a redesign.

It’s a sign to your customer base that you are always thinking about them, that you are constantly improving things, even things that currently work pretty well. That’s a sure sign of a forward-thinking company, one that is going to retain its users loyalty for years to come.

On the flip side of that lovely thought comes this development: Some users reported that they were starting to see promos for Netflix original series show up in the form of pre-roll ads, leading many to wonder if this was a prelude for Netflix rolling out a full-on ad-supported model. That notion has been raised before by detractors analysts who claim the service will not be able to support itself on $8.99 subscription fees alone. It’s a conundrum for Netflix, because the more successful their original programming is, the more original programming people want, the more their costs go up. They can view some of those production costs as marketing expenses, but it’s unclear if there’s a point at which their production expenses overtake whatever benefits they are getting from them.

That said, CEO Reed Hastings was quick to proffer a vehement “No way, José” to talk of Netflix introducing advertising, taking to Facebook to quash the rumors. While Hastings was quite adamant, we wonder how long Netflix can withstand the tide of advertising and whether they will introduce a two-tiered system: an ad-supported model that viewers can watch free of charge, and a subscription model they’ll have to pay for.

It’s an interesting proposition, as it works well with apps, where the paid version of games like Angry Birds rake in millions, but not so well for Spotify, whose paid version still needs to grow its user base. That may have everything to do with how intrusive the advertising is for frequent users, and the value they place on the content itself. Whether it’s the future of Netflix likely depends on how many new subscribers they feel an ad-supported model could bring in, taking into account both potential ad revenue and the value of the data they’re able to collect from those new users.

If that is indeed in the cards, then their ability to attract users to an ad-heavy site is one reason why their current emphasis on providing a superior customer experience may someday prove to be a very wise call.


It's Time For The Golden Age of Measurement

Co-written with Jesse Redniss and originally published at TV[R]EV on June 2, 2015
An article last week in Bloomberg asked whether TV’s second Golden Age was coming to a close, whether a glut of quality original programming made monetization difficult, particularly given that “(a)dvertisers don’t pay for [binge] viewing, leaving networks with fewer ad dollars to invest in more original programming.”
From our standpoint, Bloomberg was asking the wrong question. What they should have been asking is why television still doesn’t have a system in place to measure all that delayed- and binge-viewing. Especially when it’s become the preferred viewing method for so many people.
The current system, of live, C3, and C7, worked for a system where live viewing was king. But that king has been deposed, and by not adapting, the industry is just leaving money on the table. Of course there will be the “exceptions” that continue to drive the livelihood of this outdated methodology: Sports, Big Events, EMPIRE, Walking Dead etc.. but remove that programming slate from the equation and we’re left with a well exposed artform whose true value is being massively devalued
A recent study by Freewheel showed that 64% of OTT TV views took place eight days out from the original air date, or later. That’s a huge shift, and by not looking to measure those views, the industry is doing itself and its audience a huge disservice. The technology is there to count those viewers. All that’s missing is a tacit agreement between advertisers, networks and MVPDs that those views are important and should be included in the ratings. (Don’t get us started on the state of measurement today. As we recently pointed out, social stats are also sorely missing from the ratings.)
golden age_freewheel paragrah
A few reasons we feel so strongly about this is that quality original content not only makes good business sense, it keeps the notion of storytelling, as an art form, alive and well. Let’s explore this a bit. First, there’s the long tail. High-quality content shot on HD has longevity– there’s no reason to think people won’t be watching shows like Mad Men or Lost five or ten years from now. Just look at the reported $180M Hulu paid for 180 twenty-year-old episodes of Seinfeld. It’s not because Hulu thinks a show about nothing has no value and it’s a perfect example of the long tail in action.
seinfeld (1)
The second reason is that devoted niche audiences are far more valuable than larger audiences who are only moderately involved in a show. Devoted niche audiences will continue to watch a show for years, talk about it online, fund and follow reunions or remakes and serve as passionate brand ambassadors, bringing new viewers (and their money) to a show. That sort of audience only occurs with quality original programming, which is why we continue to believe it is a strong investment.
Interruptive advertising isn’t the only way to reach devoted audiences. Native, #CreatedWith advertising and branded content utilizing the actors and/or writers from the show can deepen the bond viewers feel for a brand. Ditto product placement and branded promotions: Shows with involved audiences are going to see much higher long-term rates of return on these tactics than shows people watch just because they happen to be on or because they have a strong lead-in. Can we say “Reality Show Free Fall” of the sort we’re seeing rock the current programming slates?
Writing off quality original programming, in particular the costs associated with it, is a grave mistake. While not all high production value programming is going to be successful (it’s art, not science, and thus nothing is ever going to be a sure bet), the payoff will be much greater than it is for the sort of “meh content” no one feels strongly about. With the current trajectory of awards we see Netflix and Amazon garnering, it’s clear to see that the emperor does have clothes and he’s decided to start mixing and matching his wardrobe and buying online.
What’s needed to make sure quality original programming remains a smart investment is a new Golden Age of TV Measurement, one that takes into account the way we watch today. It’s a system that will benefit audience, creators and programmers alike, one that’s easily implemented.
So why is no one willing to step up to the plate?
golden age_final photo

OTT Is All About Live and Other Takeaways From the Q1 Freewheel Report

Originally published at TV[R]EV on May 26, 2015

Live sports, or more precisely it’s role in the nascent OTT ecosystem was the main story from the latest Freewheel Video Monetization Report, which measures ad viewership on digital video. The amount of live content overall is growing tremendously, up 140% year-over-year (YOY) with most of that coming from live sports (82%). That’s good news for programmers and operators as much of that viewing comes from behind the Authentication Wall: 57% of long-form and live views are from behind the Wall. Live SPorts.pdf (page 10 of 32) That number pales in comparison to the astounding YOY growth of authenticated viewing overall: a whopping 328% increase which is matched and bested by the 499% growth rate in authenticated views for sports. And while much of that growth can be attributed to availability—many more sporting events are now shown live via OTT—the numbers still represent an eye-popping growth rate in the number of people watching live sports online. Where they’re watching it is of interest as well. While many in the tech world assume everyone has an iPad, a Roku and an Apple TV, the fact is that even with authenticated programming, most OTT views still come from laptops and desktops: 65%. (SEE CHART). Authenticatd Device Chart Streaming devices (Roku, Chromecast, Apple TV et al.) are rapidly catching up though, with 19% of authenticated views and a whopping 380% YOY growth rate. Streaming devices are especially popular with viewers of live content: Live represents 73% of all ad views on streaming devices but only 7% of all ad views on smartphones.

So what’s the takeaway?

  • Live Viewing Is Growing: As programmers perfect the infrastructure that allows them to broadcast live events (live sporting events in particular) via OTT, the number of viewers is growing too, at an astonishingly rapid clip. This indicates a real demand for access to live sports across all screens, particularly by those who are currently pay-TV subscribers. 
  • Don’t Write Off The Laptop/Desktop Crowd. When 65% of your audience is watching on a laptop or desktop (versus 19% on a streaming device) it’s foolish to dismiss that as the behavior of a few holdout fuddy-duddies who haven’t gotten with the streaming device or iPad program yet. Smart programmers will plan for laptop/desktop viewing, particularly on live sports where it’s easy to add in additional content, content that can be further monetized. 
  • Pay Attention To Roku. While all streaming devices are experiencing a growth spurt, Roku is starting to dominate the market. As I pointed out last week in Apple Is Flunking TV 101, Roku now has a whopping 43% of all OTT ad views (up 37% year to year) while Apple TV has just 20% (down 36% year-to-year.) That’s a huge gap and unless Apple makes some bold choices on the next release of it’s Apple TV device, Roku appears poised to walk away with the streaming device market. Put them on the top of your “companies to talk to” list. 
  • Discount The MVPDs At Your Own Risk. All the noise about cord cutting and cord nevering aside, the number of pay-TV subscribers who are watching OTT TV is skyrocketing: authenticated views are up 328% YOY and that number is particularly significant around live events, most of which require MVPD log-in. Viewers are quickly understanding the value of their pay-TV providers TV Everywhere apps and they’re using them to watch live sports on a range of devices. Even when they’re watching via a network’s own OTT app, the necessary authentication (and the data that goes with it) is supplied by the MVPDs. 

So that’s where we stand after just one quarter of 2015. If we look at the year like a football game, no one’s pulled away with the lead yet and there’s plenty of time to catch up. That said, clear trends are emerging and if you’re a smart players you’ll be paying attention to them

The Real Loser In The Charter-Time Warner Deal: The Set Top Box

Original published at TV[R]EV

While most MVPDs would love to see the set top box go the way of the dinosaur, Comcast has been betting on their X1 box, a sleek, 21st-century device that they had hoped to make the industry standard. That was, at some level, part of the motivation behind the Comcast-Time Warner deal: to create critical mass for X1 so that it would be virtually unstoppable.

Only now that’s not going to happen.

While Charter and Time Warner are unlikely to do away with set top boxes in 2015, they both seem to be fans of the BYOD (Bring Your Own Device) theory which says that set top boxes are clunky, poorly designed, expensive to maintain (it costs an MVPD something like $200 every time they need to roll a truck) and the unreliability of cable installers contributes heavily to the public’s low impression of MPVDs. Which is why companies like Time Warner and Charter would love to do away with them and let viewers buy their own Rokus, Apple TVs or tablet/smartphone apps.

Time Warner was one of the first MVPDs to launch a TV Everywhere app on Roku. Charter’s CEO Tom Rutledge has often expressed his displeasure with set top boxes and is looking to introduce a cloud-based UI which could also easily be ported to a streaming device or connected TV once the old boxes gave out.

Either way, they new entity (should Congress approve the marriage) seems ready to exit the set top box game and that’s bad news for Comcast. The goal with the X1, which Comcast hopes to license to other MVPDs, isn’t to own the set top box market as much as it is to own the firehose of data that comes with owning the interface: Comcast would be able to know what shows people were watching, saving, recording, favoriting and sharing on other MVPD systems, data that would in turn be very valuable to the networks and other programmers.

Maybe next time.