During its second annual upfront on Thursday, Hulu had a clear message for marketers: Overlook online video at your own risk. “Online video is exploding,” said Jean-Paul (JP) Colaco, Hulu’s head of advertising. It’s a “tremendous time of transformation … and Hulu is the catalyst for that growth.” Complementing fresh content -- and enough star power to rival any network event -- Hulu revealed a slew of performance metrics on Thursday. In February alone, U.S. consumers watched 2.5 billion videos on Hulu -- which amounted to about 1,000 videos a second -- according to Colaco. Along with representing 20% of the overall online video marketplace, Hulu now claims a 40% share of the premium video market, he said. The original Hulu service continues to ramp up users and content, while Hulu Plus -- the company’s U.S. subscription service -- surpassed 2 million paid subscribers in the first quarter of the year. "That represents an incredible opportunity for advertisers to reach consumers across a range of devices and platforms," Colaco said. Along with appearances from Megan Hilty of NBC’s "Smash" and documentarian Morgan Spurlock, Hulu used this latest upfront to present a number of original projects, including “Battleground,” a drama with comedic moments set in the world of political campaigns, and Spurlock’s “A Day in The Life.” Hulu also debuted several new products in development, including “Don’t Quit Your Daydream,” based on a documentary by Adrian Grenier that features a cast of famous musicians traveling across America in search of could-have-been musical artists, and “Flow,” based on the life of a hardworking kid from the wrong side of the tracks who was framed for a crime he didn’t commit. As for advertiser commitments, Colaco said it was too early to talk about any deals. “Advertisers are in the [upfront] mindset right now,” he said. “They’re allocating billions of dollars, and they should think about allocating a significant portion of their budgets to online video." Following HBO and, more recently, Netflix, Hulu broke into original programming this past January. Soon after, the online TV service ordered “Battleground,” 10 new episodes of “A Day in the Life” and “Up to Speed” -- a six-part documentary from Richard Linklater, director of “The School of Rock” and “Before Sunset.” Original content is seen as a way to complement Hulu’s ad-supported model. While Hulu Plus exceeded the company’s expectations in 2011 -- reaching a reported 1.5 million paying subscribers -- ad revenue was lower than estimated during the second half of the year. (Overall, Hulu said it had $420 million in revenue in 2011.) Securing its status as a natural go-to for advertisers, Hulu just committed to only bill brands and agencies for ads that viewers watch in their entirety. The 100% completion rate commitment includes all ads sold by Hulu itself, and will apply to both Hulu and Hulu Plus. In beta for several months, Zenith Media, General Mills and Horizon Media helped Hulu test the new model. More recently, Hulu introduced its ad swap product, which allows viewers to replace existing ads for those they feel are more relevant. Since the launch of ad swap, Hulu has seen over 9 million substitutions, according to Colaco. The company also drew attention to Hulu Latino, which already has a dozen content partners, and Spanish-language shows, which it says consistently beat their English-language competitors in the ratings.
Video on demand grew at a rapid pace in 2011 -- the fastest of any alternative TV platform and potentially very lucrative, per Rentrak. VOD climbed 17% -- 1 billion transactions -- to 8.8 billion in 2011. More than three-quarters of those transactions -- 6.8 billion -- were for free content, so-called free-on-demand. Rentrak, the media researcher, claims "the potential value of the ad inventory in these programs is at least $1 billion." Rentrak estimates there are an average of five hours and 17 free-on-demand television shows watched per month. Overall, more than 55 million U.S. homes have access to all VOD -- paid and free. The average home spent eight hours per month watching paid and free VOD content. The company says each month, 33.8 million set top-boxes accessed free content. Looking at total "TV Entertainment" category, Rentrak says -- in terms of "transaction" -- that Free-On-Demand programming is now the top category, up from third place last year. "We like to think about VOD as the power of 8-plus," stated Cathy Hetzel, corporate president at Rentrak. She added that "in the eight years since VOD has taken off, homes now watch eight hours of VOD a month and 80% of that is free TV programs, with more than 80% of the free TV program viewing occurring after the first three days of availability on-demand."
The biggest broadcast story this season seems to have nothing to do with the fortunes of any particular network but rather with the audience erosion, especially in younger demographic groups, that so many of their shows are suffering this spring. Where have all the viewers gone? That depends on whom you ask. I’ve been covering television long enough to know that the arrival of longer days and warmer weather always brings with it a reduction in the available television audience, particularly in the first hour of prime time. And this season has been warmer than average, especially in the Northeast. I also have to wonder if the problem doesn’t have something to do with the accuracy of audience measurement systems, which I assume becomes even more challenging with the behavioral shifts of the season, especially when factoring in same-day, three-day and seven-day DVR playback. All of this can’t help but generate confusion, and that brings up a question I have been asking for years. Why can’t minute by minute audience measurement for the millions of televisions and DVRs connected to cable be readily available at the touch of a button? Surely the technology is there. As for concerns about the privacy of the television viewer, aren’t they somewhat outdated now that so many people live so much of their lives online? Perfect privacy is so pre-millennial. For all of us, every esmail, every online chat, every download, every online financial transaction and every area of every Web site we visit (and the amount of time we spend at each of them) can be tracked or accessed by a number of entities, sometimes on an anonymous basis, sometimes with our identities and personal data attached. Given all that, would anyone truly feel violated if significant interested parties were automatically informed that he or she favored “Smash” over “Castle” or continuously clicked back and forth between the results show editions of “Dancing with the Stars” and “The Voice”? Frankly, I think the uptick in broadcast series erosion this spring has more to do with programming and scheduling than other matters. Let’s start with content. I consider myself an avid television viewer, but during the last few weeks I have found the experience of watching most of my favorite broadcast series to be something of a chore. I believe there are several reasons for this. First, there have been so many series of extraordinary quality on pay and basic cable networks during the first four months of 2012 that they have spoiled much of the rest of television, at least for me. A steady diet of FX’s “Justified” and “Archer”; AMC’s “The Walking Dead,” “The Killing” and “Mad Men”; HBO’s “Game of Thrones”; Showtime’s “Nurse Jackie,” “Shameless” and “The Borgias”; and Starz’ “Spartacus,” to name but a few, have left me less than interested in much of what broadcast has had to offer. And that doesn’t include the fun to be had with such shows as Comedy Central’s “Tosh.0” and “South Park,” TV Land’s “Hot in Cleveland,” E!’s “The Soup” and “Fashion Police” and Syfy’s “Face Off.” I’m not alone in feeling this way. For millions of people, the only show that matters is HGTV’s “House Hunters.” Significantly, most first-run episodes of the shows listed above run in the 10 p.m. hour, when it is dark out all year ‘round. They are the shows that dominate conversations in classrooms and offices, and at cocktail parties and backyard barbecues. How can all those tired and/or tiresome 10 o’clock dramas on the broadcast networks hope to compete, especially when daylight savings time is working against any momentum the networks may hope to build earlier in the evening? The only 10 o’clock show on any broadcast network right now that is at least trying to offer something different is NBC’s “Smash,” and it’s having as tough a time as most other shows. Oh, wait. I forgot to mention ABC’s “Revenge,” a uniquely engaging serial that is telecast on Wednesdays at 10 p.m. Which brings me to my next point about late-season audience erosion: There is simply no way to over-estimate the damage that is done to even the best broadcast shows by the rerun interruptions that continue to plague the business. When are the networks going to properly address this issue? For many shows, momentum built in the fall is dissipated by a prolonged break from first-run episodes in December and January. Slipping in two original episodes in early January only to slide back into repeat mode doesn’t help. Everything is very robust again when the February sweeps kick in, but by mid-March reruns are wrecking havoc all over again. I enjoy “Revenge” as much as anyone, but the fun I was having with it last fall has faded considerably from January through April. The same is true of CBS’ “The Good Wife” and The CW’s “Vampire Diaries.” These are just three of the many fine broadcast shows that have had to endure the negative impact of herky-jerky scheduling patterns while also trying to hold up opposite considerable competition from cable. As for audience declines earlier in the evening for the talent competition behemoths -- Fox’s “American Idol,” ABC’s “Dancing with the Stars” and NBC’s “The Voice” -- that likely has to do with format fatigue, given the number of such shows on network schedules all year long. I might be oversimplifying here, but it could be time for the broadcast networks to transition to a different scheduling model. Break the year into two-half seasons and put shows in one or the other. Let viewers settle into viewing patterns. And let absence make the heart grow fonder when a broadcast series finishes a season, as it does when many cable shows end theirs. This would likely result in fewer episodes of most scripted series per season, but that’s what viewers seem to want, because fatigue clearly sets in around March or April, and that is likely also contributing to broadcast’s current concerns. Even the best shows wear out their welcome after a while.
Hi folks, This Thursday edition of VideoDaily Roundup has a distinct television bent to it. First up, Google's GRP: the search giant's latest pitch to attract TV dollars online. Next we'll look at a startup that's making TV Everywhere cheaper for content owners, followed by the Starz network signing a TV Everywhere deal with DirecTV. After that, Akamai warns that video consumption may lead to a possible bandwidth crunch, and finally we ask: are brands ready to buy video inventory on exchanges? Google Joins GRP Race So Google is going to start using gross rating points (GRPs), the metric used to buy and sell television ads, to sell display and video inventory. Marketers everywhere should rejoice, right? Not so fast, says All Things Digital's Peter Kafka. The GRP is supposed to simplify the complex world of online ad buying -- yet several companies, including Facebook, Tremor Video, AOL (which use Nielsen Online Campaign Ratings) and comScore, are all offering advertisers some version of the GRP too. As Kafka says, three competing versions of the same metric will not make the process of buying online advertising much easier. Moreover, many folks in the industry are not sure that TV-like metrics are even appropriate for online advertising. All of which is to say that someone needs to win here before the $190 billion in TV advertising migrates onto the Web. Dyyno Brings TV Everywhere to the Media Masses Keep an eye out for Dyyno, a Palo Alto-based startup that rolls out custom video portals that can distribute live streaming, VOD and linear TV across computers, tablets, smartphones, Android set-top boxes, and OTT services like Google TV and Roku. Yesterday at the National Association of Broadcasters meeting, Dyyno introduced a cloud-based TV Everywhere service for cable operators and media companies across these devices and services. The offering is really for smaller MSOs, virtual MSOs and content aggregators. While not the first cloud-based TV Everywhere solution, what sets Dyyno apart is the speed with which it claims it can go to market with the new product (4-8 weeks), and its extremely low price point. For example, Dyyno claims that a company looking to offer 20-25 channels would need just over $100K to get up and running. A larger company with 150 channels or more would need closer to $1 million. After that, Dyyno requires a monthly revenue share of subscription, pay-per-view or ad revenues. Starz Aligns with DirecTV Everywhere After turning up its nose at Netflix’s offer to re-up its digital streaming rights agreement, the Starz network has decided to align with traditional satellite TV operator DirecTV instead. Under the agreement, Starz and DirecTV subscribers will be able to view the premium network’s movies and series on smartphones, tablets, game consoles and anywhere else you can access DirecTV Everywhere, the satellite operator’s still-in-beta TV Everywhere product. So, how much more did DirecTV offer Starz? Unfortunately, financial terms of the deal were not disclosed. Liberty Media-owned Starz becomes one of the first programming partners for DirecTV Everywhere, which is scheduled to launch later this year. DirecTV joins the likes of Comcast, Cablevision, Dish Network and content owners like HBO in launching its TV Everywhere initiative. Akamai: Video Consumption Could Lead to Bandwidth Crunch At the NAB show in Las Vegas this week, Akamai's Will Law, a principal architect at the content delivery network’s media division, warned that the Internet could be facing a bandwidth crunch, especially as more and more people watch online video. He used the example that if 10 percent of a global online subscriber base of 80 million tried to stream video simultaneously at an average speed of 3 mbps (which is probably not fast enough to stream a video seamlessly), the global bandwidth usage would be 3X Akamai’s current peak usage for all Web traffic. So does that mean we’re headed for technology Armageddon? Luckily, Law said technologies like video compression codecs are becoming more efficient, computing capacity continues to rise, and storage density is growing even more rapidly, which will help ease the problem. But he added that the future would also likely see ISPs shaping user bandwidth consumption with creative pricing models and data caps. Is Transparency Keeping Advertisers Away from Real-Time Video Ad Buying? In a video interview with Beet.TV, Mullen’s Group Digital Media Director Gina Preziosa shares, among other things, her thoughts on video ad networks versus video exchanges. She says that Mullen works with ad networks like BrightRoll, YuMe and Collective the most, because “they sort of sit in the middle; they have premium content, they have decent rates.” However, when it comes to working with DSPs to buy inventory on a video exchange, she says: “Going to the bidding level just doesn’t work for a lot of our clients…clients want to plan their budgets, they want to know where their ads are going to be seen. The DSPs and the exchanges don’t offer you that on the front end.” In other words, transparency is king: “my clients just aren’t willing to throw money at us and put them on an exchange,” Preziosa says. “I really like working with the networks because you get a good competitive rate, but you’re still around good content.”
The reports are unrelenting: Network shows continue to have lower ratings. Where will it all end? One sign could be studios taking a more active role in marketing their shows. Bruce Rosenblum, president of Warner Bros. Television Group, leaves no doubt that the current network/cable/syndication system will continue for some time. That’s because, as a business, Warner still wants its high-rated comedies to run on a broadcast network, which works best for promoting other shows via promos. But part of the financial model could change drastically. Currently, each network allots specific and valuable promotional time to marketing its own shows. But continued ratings erosion could put Warner Television “in a position where we have to pay the marketing expense -- much like the theatrical side of the business,” Rosenblum said at NAB, as reported in TVNewsCheck. With theatrical movies, studios spend tens of millions to market films. Since TV networks essentially “pay” for the marketing of studios’ shows through on-air promo time, Rosenblum said, “that's why our margins are so much higher [in TV] than the theatrical model.” Just like consumer product companies that these days look for additional marketing impressions through alternative media platforms -- cable, syndication, local TV, or digital areas -- those who own TV shows, like the studios, might need to do the same. That said, Warner Bros. is a different kind of studio. For one thing, it produces a tremendous amount of network and cable programming for all type of networks. Unlike Paramount, Universal, Fox and Disney, Warner doesn’t have a major broadcast network in its overall corporate portfolio. Other studios, with lesser TV production slates -- such as Sony and Lionsgate -- will need to do the same promotion-wise if Rosenblum’s projections come true. Does that mean studios will advertise their shows on competing broadcast networks and other platforms? Better still, will some of these marketing dollars represent a new source of ongoing ad revenue for the networks? Social media and digital airing have been credited with pushing the marketing envelope for broadcast and cable shows. But network TV marketing time is still perhaps the most valuable medium for nearly all consumer product and service marketers. We may see ratings continue to drop for sometime, with little change in the TV economic system. But an early sign that things are really changing could be witnessing, say, a “Two and a Half Men” spot running on NBC or ABC.
CIMM is taking a pro-active role in advancing new media nomenclature and processes with both its Lexicon(terms and definitions associated with return-path data measurement) and Asset Identification Primer (glossary of asset terms). These documents form the basis of this column, which offers a common language for RPD nomenclature that can expedite the rollout of the data for its many industry applications. Last week’s column (Return-Path Data Lexicon: Bandwidth) discussed the importance of bandwidth in accessing content and the challenge of apportioning enough bandwidth for speedy access while still managing costs. This week we examine the terms and definitions for bandwidth apportionment and optimization. How can cost, efficiency and customer satisfaction be balanced? Bandwidth OptimizationSee also: QAM, Switched Digital Video CIMM DEFINITION: Managing the trade-off between the cost and the efficiency of delivering video. NOTE - Bandwidth is one of the primary cost concerns cable and telecommunications operators deal with when considering new consumer or advertising applications. Bandwidth optimization solutions have been developed to accommodate the growth in consumer applications including HD video and higher broadband speeds and advertiser applications such as household addressable TV advertising. (Source: Visible World) SDV abbr Switched Digital VideoSee also: Advanced Advertising, Bandwidth Optimization CIMM DEFINITION: CIMM DEFINITION: A method of distributing digital video, utilizing bandwidth more efficiently by only broadcasting channels that have been requested by at least one household within a cable service area. (Source: CableLabs) 2: “Switched digital video refers to a network scheme for distributing digital video by managing network bandwidth resources. Switched video sends the digital video in a more efficient manner so that additional programs may be available for users using he freed up bandwidth. One of the core technologies that can make advanced advertising in linear programming a reality for cable operators.” (Source: BigBand Networks) 3 : “A telecommunications industry term for a network scheme for distributing digital video via a cable. Switched video sends the digital video in a more efficient manner so that additional uses may be made of the freed up bandwidth. The scheme applies to digital video distribution on cable TV systems using QAM channels, or on IPTV systems.” (Source: Wikipedia) Please refer to the CIMM Lexicon online at http://www.cimm-us.org/lexicon.htm for additional information on these and other terms.
Turner Broadcasting made the toons everywhere model part of its upfronts this week. During its presentations the company announced that live streaming of Cartoon Network programming would commence “shortly.” This will include access to the current programming content on the Web at the CartoonNetwork.com site as well as across the iOS devices already served by the CN app. It is going to be a hit. VOD cartoons have always been a quiet giant in mobile content. I got a personal glimpse of this in its very early days. Verizon sent me the first VCast phone with its small VOD trove of clips six or seven years ago. I passed it across to my daughter, hoping to get a dazzled response, but was met with disinterest. Okay, video on a phone -– tiny, tiny TV. What is the fun in that, was her response. “Ooh, wow, SpongeBob,” she said when she finally drilled down far enough to find the Cartoon Network stash among the nests of folder. Old-timers may recall that the VCast and Sprint TV interfaces were as inviting as a row of file cabinets -– exactly what they were. At any rate, the prospect of having SpongeBob on demand was enough to turn her. She had discovered what many VCast customers with kids had already found -– these things are great babysitters. Cartoons were a surprise early hit on mobile video because they were the perfect confluence of medium, content and use case. The shows themselves were by structure already short enough for easy sampling or full-length mobile rendering. The gadget was perfect for passing on to a kid. And the use case was, well, just about any airport, car back seat, or waiting room where kids get fidgety. A live stream of Cartoon Network programming may not be as compelling as the streams in a news app like CNN’s, largely because the distinction between the on-demand and live programming is so slight. The existing CN app for iPad, for instance, is every bit as good as the Time Warner sister company’s HBO Go. Subscribers to the partner cable stations can unlock enormous back catalogs of cartoons and live programming. But even better than the HBO Go app, CN’s is a persistent promotion of the network even to non-subscribers. The app is filled with clips that for many kid vid mavens will be good enough. The real killer use case for kids and CN’s live stream may well be as a spare TV in the house. When kids get pushed off of the other available screens by big brother playing "Mass Effect 3" or the parents insisting on watching those Big Bang reruns for the fiftieth time, the juniors will have an ever-ready extra TV. I am all for it. Speaking as a dad who had to suffer through years of SpongeBob, Dexter’s Laboratory and Jimmy Neutron toons playing relentlessly on the family TV, this toons everywhere thing came a decade too late. But let’s hope it will save the next generation of parents from having to figure out -- what the hell is SpongeBob’s deal, anyway? I still don’t get it, and I had to watch (or ignore) all of those episodes at least fifteen or twenty times.