Nov 22, 2015

Week In Review: Catering To Cord-Cutters

Originally published at on November 20, 2015

It’s been a relatively slow week in TV-land, meaning nothing over a 7 on the Richter scale. Still, plenty going on to talk about.

In the last 7 days, we had a number of stories come out about the broadband-only services the MVPDs are starting to offer. Comcast exempted “Stream” from bandwidth caps. Verizon added some VICE programming to Go90. And Cox announced it was launching it’s own OTT service “FlareMe TV.”

While the names of some of these services may be inexcusably lame (Cox!), the concept behind them isn’t: cater to millennial and Gen Z consumers who have zero need for a full-on cable package and get them into the ecosystem where they can be tracked for the valuable data they provide now, and upsold at a later date too.

In the interim, the MVPDs can start serving as the middlemen (middlepeople?) for all the new standalone OTT services the networks are launching, Univision being the latest, with it’s $5.99/month Univision Now. If you only watch a few channels, going the solo route can be cost-effective, but with network apps coming in at $6 a pop, that number quickly adds up. That’s why it’s likely (as we noted earlier this week) that the MVPDs will step in and become the primary vendors for these services along with hardware manufacturers like Apple and Roku, thus sparing the networks the pain of setting up their own billing and collections departments.


Get over your fear of cord-cutting while simultaneously coming to grips with the notion that the world where everyone has an 1800-channel, $150/month pay-TV package is over. Keep on figuring out ways to reach your audience wherever it might be, but realize that you’re not going to disintermediate the MVPDs. Maybe call some of your MVPD contact up this week, see how they’re doing—you might want to get your programming on their soon-to-be-released broadband-only app.


ABC’s Wicked City got that dubious honor, followed shortly by NBC’s The Player (which wasn’t cancelled outright; NBC just “reduced the number of episodes ordered.” Because that’s different.

As we noted last week, networks are coming around to the realization that shows with low ratings sometimes get a second wind via streaming and on-demand. They get the notion that a smaller, more passionate audience trumps a larger, indifferent one.

Figure out how to empower that smaller, more passionate audience. Involve the showrunners and use social platforms and second screen to give them the content they need to enable their obsessions. Listen to what the audience is saying and what moments are resonating. Think long term, not short term.

A new Nielsen study showed that 27% of Roku viewing involves multiple viewers—friend and family watching together.

It confirms what we’ve long suspected—people use their Rokus for Family Movie Night and to binge shows together.


Understand that a lot of binge viewing and other streaming happens on big screen TVs, not just iPads and smartphones and plan accordingly. TV is still a social activity— IRL and on Facebook.

If You Can’t Beat ‘Em, Join ‘Em: Why Cord-Cutting Has Ceased To Be A Threat

Co--written with Jesse Redniss and originally published at

It’s funny how cord cutting, the industry’s biggest bogeyman can seemingly disappear as a threat overnight. Not because of any sudden victory or clever strategy play by the TV Industrial Complex, but rather, because forces have gradually realigned and what was once unthinkable is quickly becoming the status quo.

And so it’s come to pass that no matter how you want to get your TV—streaming services, apps, YouTube or the Titanium Plus All-Channel Cable Package—all options seemingly lead to the same place: your MVPD broadband provider. It’s an easier and more cost-effective solution for everyone to feed off the same ecosystem than to try and create something new. And while viewers may stray from the classic thousand-channel cable TV package, many won’t stray all that far, and many more won’t necessarily stray forever.

Rather than people permanently severing their connection to the MVPDs, what we’ll see instead is people buying alternative packages from those same MVPDs. (Sort of like how supermarket chains now sell the organic food that was once their greatest competitor.) Instead of abandoning Comcast, Time Warner, et al, consumers will turn to them to buy access to streaming services, to individual network apps and to some form of broadband-only service with a skinny bundle and short form videos.

And they’ll do it because it makes business sense for all parties involved.

What’s In It For Streaming Services and Networks

For streaming services like Netflix and Hulu, it makes sense because when they allow the MVPDs to sell their services, they also get a free sales force, a free billing and collections department, and a whole lot of free marketing support. The latter is particularly true for those streaming services likely to be featured in the MVPD’s various promotions (“Get three free months of Netflix when you sign up!”)

If you’re a network launching an OTT app, it makes sense for you to sell your app through the MVPDs too, because of the billing and collection services you won’t have to build and because you’ll have instant access to the 95 million subscribers they have in their respective databases, which, given that you’re building your audience from scratch, is going to seem like a very good deal. And while you may occasionally cannibalize your existing audience, the new Nielsen TAM service will ensure that the views you get on your OTT service will still be counted.

What’s In It For Viewers

While both streaming services and network streaming apps will also make use of services like iTunes and Roku to sell subscriptions, those services can’t offer a single bill for TV and broadband the way the MVPDs can. While this may not seem like that big a deal, if you’re looking at five or six standalone services, plus broadband, the notion of a single bill can be very compelling.

There’s also the prospect of volume discounts, e.g. sign up for six independent services and get the seventh for free. That’s compelling because the networks are unlikely to offer much of a discount on their freestanding apps— CBS All-Access is $6/month, so if you have eight similar apps, that’s $48/month, plus $10 for Netflix, $15 for HBO Now and suddenly your $73/month bill isn’t that small, especially for what you’re getting. If your MVPD can bring that number down as part of a deal that includes unlimited broadband and a landline or cell phone, that’s going to be a lot more attractive than assembling the package yourself.

What’s In It For MVPDs

The MVPDs also stand to benefit from these arrangements. They make their money off of broadband, and the more broadband subscribers they have, and the more broadband those subscribers use, the happier they are. In addition, getting subscribers into their database, even if it’s just to buy a single HBO Now subscription, gives them the opportunity to upsell those customers, get them into the ecosystem and keep them there. That’s why we’re already seeing many (if not most) of the MVPDs introduce some sort of broadband-only service aimed at Gen Z and Millennials (Comcast Stream, Verizon Go90) that bundles traditional television and short-form YouTube-based content meant for consumption on their mobile devices.

A Journey, Not A Destination

The ability to adapt to consumers at various life stages is going to be the key to the MVPD’s success. So while a single viewer in their 20s would likely only need a few subscriptions, maybe to catch up on sports or to binge, when that same viewer settles down and has kids, they’ll likely take a more extensive package to satisfy all members of the family. Again, this may not be today’s traditional cable bundle, but it will include a broad array of options, and, more importantly, bring all the players revenue that’s in line with what they’re making today, whether that revenue comes from advertising, subscriptions or one-off transactions. As we’ve seen in recent months, ad revenue seems to be remaining constant even as the number of viewers goes down, in large part because no other medium offers the same kind of reach.

The Danger Of A Monopolistic System

Before we paint too rosy a picture, it’s worth pointing out the inherent danger of the system that seems to be shaping up: it’s based on a monopoly (or at best, a duopoly) where one company seemingly holds all the cards. Or at least that last mile cord into the home. That’s never a good thing, especially when those MVPDs have traditionally led the list of “America’s Most Despised Companies.” Giving them that much power is not the best idea, but short of government intervention or technological breakthroughs that provide alternate sources of broadband connectivity, there don’t seem to be any realistic alternatives.

As the MVPDs expand the notion of what constitutes “Pay TV” and which services they’re willing to offer, the notion of “cord cutting” will fall by the wayside. Existing networks and other content providers need to adapt to this by understanding that their viewers are on a lifelong journey through the pay-TV ecosystem, with different needs and wants each step of the way. Acknowledging this, and creating options that connect with viewers at each juncture will be the key to their success in the years ahead.

Or at least until the next major shockwave hits.

Nov 16, 2015

Week In Review: Reports Of It’s Death Have Been Greatly Exaggerated

#3 in the TV Week In Review series at TV[R]EV. Where you get the best insights into the [r]evolution in the television industry from people who actually work in it.

This has got to be a most excellent week if you’re a TV executive. There’s been a slew of good news, starting with the fact that ad revenue is up. Way up, according to Ad Age, despite the fact that ratings are down and networks are starting to run fewer commercials.

Ad Revenue Is Up
What’s responsible for this seemingly logic-defying development? It looks like advertisers have finally discovered that nothing gives them the reach and frequency that TV does, even with diminished ratings and less people watching in real time. That’s something TV executives have been saying for a long time, and the ad industry seems to finally be listening.

That’s good news for a number of reasons, among them, it gives credence to the industry’s Holy Grail, that as digitally-delivered television becomes more common, they’ll have more and better data on users and will thus be able to deliver fewer but better targeted commercials, which they can then charge more money for.

Fewer, Higher-Priced Commercials
The “fewer and better targeted” piece also seems to be coming to fruition, as several networks announced that they were cutting back on their ad loads. And while some are quick to see that as a reaction to Netflix and other ad-free services, it’s also a smart business decision: the fewer spots there are, the more valuable those spots become, regardless of how many people are actually watching.

Nothing’s Getting Cancelled
The final piece of good news this week is the fact that no new shows were cut from the networks’ rosters as of this week. That’s the first time that’s happened since the early 1950s. And it’s not because the network programming execs suddenly got really good at their jobs. It’s because the networks, in their infinite wisdom, are finally realizing that the current ratings system is no test of how popular a show is — or will become. They’ve come to believe in the power of the long tail, the notion that a show may actually pick up an audience weeks or even months after it first airs. By letting even low-rated series play out, the networks give them a chance of succeeding in the ensuing months, and, if nothing else, are creating an asset that can be licensed (or even revived) by an online service.

That’s a serious sea change in the way networks view programming, new programming in particular, and that shift to acknowledging, accepting and embracing the long tail, will change the ways shows are chosen, produced and marketed, making the need for an immediate embrace obsolete.

Singing The Yahoo Blues
Three BRaVe Venturers weighed in on this piece over at The Wrap by our friend Jordan Chariton. Andy Marks, Jen Kavanagh and Alan Wolk all reached a similar conclusion, that Yahoo tried to do too many things at once all but assuring they did a half-baked job on everything, and, in trying to both please their current audience while attracting a new one, managed to do neither. Well worth the read.

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Totaling It Up. Will Nielsen Have An Audience For TAM, Or Is It Too Little Too Late?

Co-written with Jesse Redniss. Originally published at on November 9, 2015.

Nielsen finally revealed details and a launch date for its OTT measurement system, dubbed “Total Audience Measurement” and the industry may never be the same. We’re (mostly) impressed with what they’re trying to accomplish and believe that it will kickstart TV Everywhere, so that 2016 will be the year we finally see the radical changes everyone has been waiting for.

Total Audience Measurement: What We Like

Ad Views versus Program Views: Total Audience Measurement (TAM) addresses the issue that in the brave new world of TV viewing, ads and shows need to be measured separately. That’s because someone watching the digital broadcast or VOD broadcast of a show may not see the same commercial load as someone watching the linear feed. Nielsen’s plan is to create two different metrics, one that will allow networks to know how many total viewers a particular show has, and one that allows advertisers to know how many people actually saw an ad.

Just About Every Device: TAM will be able to count views on just about every streaming and mobile device out there: PCs, mobile devices, tablets, VOD and streaming devices like Xbox, Apple TV and Roku. A few niche devices like the Apple Watch won’t be counted, but their low usage rates would not effect ratings anyway.

Bigger Panels: Nielsen is doubling the size of their panels from 20,000 households to 40,000. While we’d still like to see a measurement system that counts every single view, we also realize that no one is going to let the MVPDs (who are the only ones who have that capability) have that kind of power. Given the complex nature of TV rights and negotiations, responsibility for ratings are always going to fall to an impartial third party.

Moving Beyond C3 and C7: Nielsen has the ability to measure way, way beyond the C7 window. The reason they don’t is that the current rules, which date back to 2006, do not allow them to. To remedy this, Nielsen is working with the major ad buying agencies and networks to change those rules, something they say they’re not getting much pushback on. So we should soon be seeing accurate ratings many days out, which will allow for a more realistic picture of current viewing habits.

Moving beyond C7 also acknowledges the rapid growth of ad-supported VOD, which means that views 21 or even 91 days out are as likely to be on VOD as they are on DVR. Those numbers are going to prove very useful to networks when making programming decisions, as they’ll be able to gauge which shows have developed bigger audiences in the off-season — a powerful piece of data since audiences who discover shows via bingeing tend to be far more evangelical and passionate than those who discover the shows via linear.

Measurement For Streaming Services: Sort of. While YouTube and AOL will be fully measured, Netflix and Amazon don’t want Nielsen poking under the hood. But it seems that several of the major studios want to know how their shows are doing on those streaming sites and are supplying Nielsen with audio files so they can find out. We wish Hastings and Bezos would stop being so secretive — we get that they don’t rely on ad revenue, but releasing ratings numbers would allow everyone to know just how popular their new shows are and with whom, data that can influence programming decisions on ad-supported networks too.

What We Don’t Like

Still No Social. As we pointed out last year, the key measurement missing from TV ratings systems is social. While Nielsen does measure Twitter, it’s an open secret that Twitter ratings are reflective of what’s popular with Twitter’s unique audience clusters and not with the viewing population at large. You can see this by looking at the social TV ratings from companies like Shareablee, where Instagram sometimes outranks Facebook, and both leave Twitter in the dust, the latter often accounting for well under 10% of audience interactions.

Adding social ratings, especially social ratings that take context into account, will give a clearer picture of what shows, ads, actors and genres are resonating with viewers. As more and more marketers move toward smarter insights like “emotional resonance” and “advanced sentiment analysis” to derive true meaning behind flat metrics. It will also give a clearer idea of what else those viewers like (Psychographic insights) allowing networks and advertisers to see patterns between the shows and the show’s audiences. In addition, the size of the social audience, Facebook in particular, provides census-level data, which can serve as a check on Nielsen’s panel data.

Or Is There? We keep hearing rumblings about Nielsen adding anonymized Facebook data to the overall Nielsen Twitter TV Ratings data set. When you break down the Nielsen SDK demo process, it seems that Nielsen will be bumping up its data to Facebook anyway in order to attach demo and psychographic info. So, while we can only assume that Nielsen’s next step, after TAM is released, will be to go to Facebook and Instagram and Snapchat (and maybe even Tumblr) and start incorporating their numbers into the social rating, the question remains as to how they’ll do it in a way that’s “fair & balanced” to their long time partner Twitter? If the social TV ratings from companies like Shareablee, which consistently show Twitter responsible for less than 10% of the social TV traffic for most hit shows are any indication, it’s going to be rough roads ahead for Twitter’s relevance here.

Branded Content and Brand Funded Content

As consumers continue to find ways to avoid interruptive advertising, brands are taking a #CreatedWith approach to ad integration, looking to place their messages within the content of the show. As these executions become more popular, Nielsen will need to start measuring their effectiveness as well. This is particularly important if these executions are going to become part of the programmatic buying systems that are all the rage today. Without a way to measure #CreatedWith and other branded integrations, TAM is going to fall short. It’s our opinion this should be the next challenge Nielsen tackles.

What Happens Next

TV Everywhere Explodes. This is the real benefit to TAM. Because once the networks know that all those non-linear views will be counted by a universally accepted measurement system, their objections to TV Everywhere melt away.

Until now, the networks have been (rightly) worried that views on tablets and VOD and streaming devices equaled money down the drain, as those viewers meant lower ratings and thus less ad revenue. Hence all the restrictions on TV Everywhere apps. But now that everything’s being counted, the networks are more than happy to let you watch whenever, wherever and however you want — the more the merrier. They know that when people have more ways to watch TV, they actually do wind up watching more TV. Ratings go up along with ad revenue, and everyone is happy.

The MVPDs, who provide both pay-TV and broadband service will also be more than happy to have you watch TV via an online connection, since the more bandwidth you use, the more money they make. That’s because MVPDs make their real money on broadband — pay TV provides very thin margins.

That means the MVPDs will be rolling out new and improved versions of their TV Everywhere apps, which will be freed from the restrictions they’ve had until now. So you’ll be able to tap into their VOD libraries, watch whatever you want when you’re away from home, pause and rewind, and otherwise enjoy a superior TV experience.

Audience Parting

As OTT viewing explodes (along with the ability to measure it), we will see much more of what we call “Audience Parting” — advertisers buying specific audiences rather than specific day parts. Time shifting will play a huge part in this as well, since buying prime time shows (or shows that originally ran in prime time) is no longer a guarantee of anything — early research shows that there are significant differences in the audiences who watch TV live, the audiences who watch 3–7 days out and the audiences who watch 3–7 weeks out. By buying specific audiences, advertisers will be able to replicate the powerful targeting capabilities currently available online, without sacrificing their ability to reach mass audiences. It may be more work for the networks ad sales teams, but should result in higher fees for the more targeted audience. If Nielsen’s TAM works as expected, audience parting should become the rule, rather than the exception.

A Data Explosion

While Nielsen may begin collecting additional data from all the OTT sites they’ll be monitoring, they’re far from alone. The networks have been busy collecting first-party data on their viewers via systems like Viacom Vantage, NBCUx and Turner Data Cloud and using that to power new programmatic style ad buying programs. These systems will serve to keep Nielsen on its toes as the first party data the networks collect is deeper and less reliant on panels. Nielsen will need to continually innovate to keep pace with TV’s new digital-centric reality, particular when it comes to data. Advertisers will be the real winners however this shakes out, since the more data they have (regardless of its source) the better decisions they’ll be able to make.

Maybe The Future Isn’t About Apps, Tim.

As much as we want to love everything Apple does, the problem with an app-based future, is there’s no program guide, no central organizing system that keeps track of your shows and where they are.
Siri might someday fulfill that role, but for now, for anyone who watches more than just a few hours of TV a week, the MVPD offerings, which combine in-home set top box delivery with full TV Everywhere service for hundreds of channels, will be the way to go, providing access to just about anything you’d want to watch (including short form content from YouTube and others) along with an easy way to find and organize it all. Throw in a single bill for all your TV and broadband needs, and it’s a hard deal to turn down. Comcast has done a stellar job of driving this paradigm to reality.

The Change Is Now.

As all TV begins to feel like Netflix, we’ll be seeing even more changes in the way we watch. It’s the moment we’ve all been waiting for and with the launch of a universally accepted measurement system, there’s nothing to hold it back.

Why We Need A New Definition For “Pay-TV”

It seemed, for a while anyway, that the Great Cord-Cutting Scare of Q2 2015 was an anomaly, and that the MVPDs had managed to successfully stem the number of defectors. But then Dish released its Q3 figures and a prominent analyst examined those figures and then re-examined them and announced that Dish indeed had suffered greater losses than anyone had expected, single-handedly doubling the number of Q3 cord-cutters.

Or did they?

And are those stats a reason to resume the ‘Sky Is Falling’ chant or does the industry need a new definition of what constitutes ‘pay-TV’?

Sling Is Still Pay-TV
The most knowledgeable estimate indicated that while Dish has lost nearly 180,000 subscribers, Sling (its wholly-owned broadband-only product) had gained 155,000 subscribers, for a net loss of only 25,000 for the overall Dish empire.

Given that Dish’s main selling point is the low price of its service, it’s not surprising that many of its subscribers turned to the even-lower-priced Sling option. I’d also argue that those customers, who are paying somewhere between $25-$50 a month for the service, are still pay-TV customers. Their service may come over the internet and it may consist of a very skinny bundle of channels, but in many ways it is more like traditional pay-TV service than most of the current cable and telco pay-TV systems.

Sling does not have DVR or VOD capabilities for most of its channels and thus all of its programming needs to be watched live, with all the commercials intact. That sounds a lot like pay-TV to me, especially because all the revenue from Sling is going into the pockets of Dish, an established player in the pay-TV space.

I’d make the same argument about Verizon’s new Go90 service and Comcast’s Stream, the latter in particular as it offers all four of the major broadcast networks and HBO. These broadband-only services may have a different delivery method than cable or satellite pay-TV, but beyond that, the product is essentially the same.

A Blurry Line
As we move forward, the line between what constitutes pay-TV and what doesn’t will continue to get blurrier. MVPDs are already beginning to offer Hulu, Netflix, Amazon and other services that had previously only been available via separate OTT subscriptions. That trend will no doubt continue since it’s easier for all parties involved: the MVPDs get to keep their straying customers, the streaming services get additional sales and billing support, and the consumer gets a better price and a single bill.

As such, I’d propose a new definition of pay-TV: any service that offers an array of options from a variety of established TV content providers. This service can be as skinny as Sling or as broad as FiOS Platinum, but if you’re buying the right to watch network programming from someone who is aggregating rather than creating said content, you’re buying pay-TV.

Originally published at TDG Research on November 12, 2015

Week In Review: Cord Cutting. Still Not Happening.

Welcome to Edition 2 of the new Friday Week In Review edition of TVREV. Where we’ll be examining the top stories of the week in detail, looking at why they matter and what you should do about them.

Much to the dismay of the tech community, pay TV’s numbers held fast this quarter, with Comcast in particular coming on much stronger than in Q2. While the MVPDs are not gaining any subscribers, they’re losing them in teeny tiny increments. What many seem to forget is that a number that makes for a great Business Insider headline is actually a rounding error for an industry that has close to 90% penetration. This past quarter, those numbers were considerably smaller — Comcast, for example, only lost 48,000 subscribers, which constitutes 0.02% of their user base. Certainly not the stuff trends are made of.

WHY IT MATTERS: Pay TV is proving increasingly difficult to kill off. As TV Everywhere takes off in light of the new Nielsen OTT measurement system (TAM) it’s going to be even harder to eliminate. It may evolve — several MVPDs are following Dish’s lead and offering internet-only “skinny bundle” packages — but the appeal of a single bill, a program guide and DVR and lots of free channels is hard to beat.

WHAT YOU NEED TO DO: Keep on keeping on. There’s no need to drastically alter your pay TV plans or worry about a music-industry style collapses. Keep an eye out for broader trends around cord cutting, but right now nothing is.

The suddenly hot Hulu introduced yet another layer to their viewing model: viewers will have the option to watch a :30 interactive ad up front, allowing them to skip the two and a half minutes worth of interruptive advertising that would otherwise follow. While this option will initially only be available for viewers of Fox family shows on mobile devices, Hulu has plans to roll it out platform-wide.

WHY IT MATTERS: At a time when interruptive advertising gets less and less respect (and, more importantly, views) the industry is looking to find alternatives. Interactive advertising is appealing as it allows marketers to get in the more hard-sell messaging many of them miss in other “new advertising” formats like native, branded and #createdwith

WHAT YOU NEED TO DO: If you’re a network, think about what adding interactive ad units, and offering them as an alternative to interruptive ones, would do for your bottom line. If you’re a network whose viewers lean heavy on the fast-forward button, then interactive makes sense as well. If you’re a marketer, think about what your brand’s interactive ad might look like. And hit up Joe Marchese at True[X] to learn more about what they have to offer.

In what’s rightly being hailed as a significant legal victory, the MPAA has managed to get the plug pulled on illegal streaming site PopcornTime. PopcornTime had Hollywood very freaked out because the interface looked prettier than Netflix and the platform made pirating movies a snap.

WHY IT MATTERS: While this probably isn’t the last we’ll hear of PopcornTime, and similar sites, there may just be a realization that there are financial consequences to piracy. Regardless, the ability of the MPAA to shut it down should have a chilling effect on others who are looking to do the same.

WHAT YOU NEED TO DO: Nothing. Piracy is still a real concern, sites that illegally stream movies and TV shows are more of a threat than download sites because they provide instant gratification. PopcornTime is still problematic in that it proved the value of a well-designed interface for video-based file sharing sites.

Chasing innovation wherever they can find it, Twitter changed the icon for the favorites logo from a cold-but-bold star to a touchy-feely heart. Users reacted badly as the overall feeling was that the star was less about praise than acknowledgement and Twitter had (once again) fixed something that wasn’t broken.

WHY IT MATTERS: With quarter after quarter of flatline user growth, Twitter (and their new CEO Jack Dorsey) need to prove that they’re doing something to promote user growth. A heart probably isn’t it though, fellas.

WHAT YOU NEED TO DO: Treat the heart the same way you treated the star. Not worth stressing out about. You might also want to offer a prayer to the social media gods that Twitter figures out how to do something about that shrinking user base. Before said shrinking user base does something to Twitter.


Hulu’s Interactive Ad Play: Is This The Dawn of the Post-Advertising Era?

This week we saw the first sign of what the post-advertising era might look like when Hulu announced that they would start running interactive ads using technology from recent Fox acquisition TrueX. Viewers would have the option of watching a 30-second interactive ad at the beginning of a show that would allow them to then skip the two-and-a-half minutes of interruptive advertising that would otherwise follow.

The TrueX ads will initially be introduced on all Fox programming on Hulu, and advertisers like Mondelez are already on board.

So is this the future of advertising or is it just a case of Fox trying to find an audience for a company in its portfolio?

Interactive ads are likely a future of advertising — one of several formats that will replace interruptive advertising, rather than the future of advertising. The TrueX/Hulu formula of showing the ads before the program airs allows viewers to watch the show for free without interruption, while still ensuring that the content owner makes a profit. That sounds like a win-win situation for everyone involved.

As more and better data becomes available, and user targeting becomes more refined, viewers should begin to find that most of the ads they’re being served are for products and services that actually interest them. This will make the interactive format even more valuable, as it increases the likelihood that viewers will actually interact with the ads, which in turn increases both engagement and effectiveness.

A Better User Experience 

User experience will be a key differentiator for television services in the coming years, and the ability to watch entire programs without interruption will be a critical feature. As the movie industry has long known, viewers are happy to put up with some advertising before the show in exchange for an uninterrupted viewing experience afterwards. This is especially true for viewers watching on a digital platform where viewing can be assumed to be more intentional — the viewer has purposely set out to watch a specific program, versus randomly channel surfing just to see what is on TV.

More Like ‘Real’ Ads 

Interactive advertising should also prove to be quite popular with brand managers as the ads feel more like ‘real’ ads, with strong selling messages and calls to action. This positions them favorably in regard to their ‘new advertising’ competitors, native advertising and branded content. Many marketers feel those formats soft peddle the brand sell too much and would welcome the more traditional structure of interactive ads along with their easily trackable feedback loops.


Hulu now effectively has three ways for viewers to watch its programming, and this may prove to be a harbinger for how the industry evolves. Those with higher incomes or higher levels of involvement with the programming can choose to pay $11.99/month to avoid advertising altogether. Those who want to interact with a thirty-second ad at the beginning of a show can then avoid interruptive ads during the show, while those with a lesser degree of involvement can just sit back and watch ads (or, more likely, use the ad breaks to check their Facebook accounts.)

Take those models, throw in a smattering of native ads, product placement and branded content, and you just might be looking at the future of TV advertising.

Originally published at on November 5, 2015.

Twitter's User Problem

Twitter announced its latest earnings this week, and the one thing that stood out during the call was the lack of any significant user growth. In addition to sending Twitter’s stock prices downwards, the revelation served to highlight the social platform’s biggest problem: its inability to attract a broad user base of the sort that might prove useful to the television networks they’ve spent so much time and effort trying to attract.

Adding insult to injury, Twitter released its first ever TV commercials on Tuesday night during Game One of the Mets-Royals World Series and the spots, which focused on Twitter’s new Moments feature, were routinely trashed. “Confusing” and “Incomprehensible” were two of the more printable epithets.

While many observers blame Twitter’s problems on the fact that it is can seem impenetrable for newcomers, I think the problem is more basic than that. I think Twitter’s problem lies in the fact that only a certain percentage of the population is comfortable putting their thoughts out there publicly and there’s nothing the platform can do to get them over that psychological barrier.
So rather than fight that problem, Twitter needs to roll with it. They need to make it easy for people to become “read-only” members, creating a version of the app that allows them to read tweets and possibly favorite them, without any pressure to retweet or respond.

That means accepting that for many users, Twitter will be a broadcast medium rather than a social one.

I don’t see that as a problem however, as given the large number of celebrities and media figures already on the platform, Twitter already functions that way for many users.
What’s more, this setup will make Twitter a more attractive platform for TV networks, who are looking to use it as a way to drive tune-in. By giving users a way to see all the second screen content a show is putting out, while receiving notifications each time their favorite shows and/or actors update their accounts, Twitter can give TV networks the type of delivery system they’re looking for.

This will be a win for both parties, for as I outlined in my recent report on Social TV, Twitter is currently headed for a significant decline as linear viewing tapers off (making a real time platform less relevant) and as networks increasingly see social as a paid platform (making their stagnant user base less attractive.)

A Change Has Got To Come

A read-only platform does not have to mean the end of Twitter as a social platform for those who want it. But if Twitter is serious about growing its user base, it will need to become proactive about creating a user experience that appeals to a broader base of users. This is critical, as one of the frequent complaints about Twitter that I hear from network executives is that the current user base consists of dozens of niche “villages” created by specific types of users, making it hard for programs who don’t hit those demographics to get any sort of traction on Twitter. A broader, more accessible platform will eliminate that issue.

To learn more about the future of Social TV, check out my new report at TDG Research