Commentary

Cable and Broadcast in TV Everywhere's Bed; In-Stream Engagement Strong

Perhaps the most important story to emerge from the TV upfronts isn’t the next hot hour-long drama or new sitcom. It’s the burgeoning reach of TV Everywhere thanks to ABC’s announcement that it’ll allow live streaming of its shows via its iPad and iPhone app. The Watch ABC option will be available in New York and Philadelphia to start, and then ABC will introduce it to six more cities where it owns local stations.

The catch? Viewers must be authenticated pay-TV subscribers to watch.

That key underpinning indicates that TV programmers remain in bed - understandably so - with their service providers. Broadcast networks aren’t jumping into TV Everywhere unless their provider partners are holding hands with them. Last summer, NBC required digital viewers of the Olympics to be authenticated pay-TV subscribers, while Fox offers shows online first to pay-TV subscribers. ABC has long been a digital leader among TV networks. It was the first to offer shows on iTunes, and the first to stream its shows online in its own full episode player, and I’m betting this live streaming option will also mark the start of more broadcasters offering their shows digitally in the same fashion. If TV Everywhere takes hold then, it will do so with cablers and broadcasters in lockstep. At the end of 2012, 90% of North American service providers offered TV Everywhere services, Parks Associates said in a recent report.

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As TV programming widens its reach to more devices, that migration raises the question of when and how ads will be seen and sold. For starters, many broadcasters have said they expect digital programming to be a larger part of their upfront presentations, while some broadcasters are even pitching digital fare during the current selling season. Univision even presented at the recent Digital Content NewFronts.

When it comes to ads running in digital video, the ad technology firm Pointroll reported recently that the click-through rate for in-stream videos it served last year was 0.62%. That’s four times the rate for both mobile and rich media ads. Pointroll said the interaction rate for in-stream video ads clocked in at 5.7%, compared to 4% for rich media and nearly 1% for mobile.

In addition, more than two-thirds of in-stream video ads were watched all the way through, while only 40% of mobile ads were viewed to completion. The data comes from a study of about 2 billion video ad impressions.

“As the report clearly outlines, multi-screen consumer engagement matters,” Pointroll said. “With more than 88% year of year growth in mobile ads delivered and 37% in in-stream video, it is clear that advertisers are delivering more multi-screen campaigns while consumers are adopting more interactive behaviors across the non-PC channels.”

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