For Operators Delivering Ads As Part Of TV Everywhere, Deployment Is Key

TV Everywhere? Hardly. Four years after Comcast Chief Executive Officer Brian Robert and Time Warner Cable CEO Jeff Bewkes introduced their concept of TV of the future at the Cable Show in Los Angeles, a service that would deliver a plethora of content to subscribers at any time anywhere, the initiative remains stalled.



While more than 90% of pay-TV homes in the U.S. have access to TV Everywhere (and even more in Canada), fewer than one-third of subscribers are even aware of the service that was supposed to deliver content to consumers on TVs, tablets and smartphones. And just 15% use it.

Part of the reason is that cable, IPTV and satellite operators have been hesitant about promoting a product they’re not sure can pay for itself, let alone be profitable.

Content costs, especially to deliver on multiple devices, are rising; in many cases, MSOs are still negotiating the rights they need to use that content. Cost of delivery has also been a hurdle, although new services have begun to appear on the market that will help hold operating expenses down.

By far, the biggest concern operators have is monetizing.

In 2012, companies spent nearly $70 billion on TV ads in the U.S. That’s forecast to top $75 billion by 2017. U.S. ad spend on online video has so far been only a fraction of that amount, forecast to hit about $4.1 billion in 2013.

"The 30-second (TV) slot remains unmoved by the numerous online formats emerging and represents a single, monolithic spending format compared to the relatively fragmented state of online," says Strategy Analytics analyst Leika Kawasaki. That’s likely to change as technology makes it easier to pair advertising to live and on-demand streaming video based on content.

By 2017, in fact, eMarketer projects that spending on online video advertising will top $9 billion, better than 12% of the traditional TV spend.

Much of that spend will be on mobile.

In 2013, mobile video will be just 13% of all digital video ad spending, about $520 million. By 2017, analysts expect it to be 30% of all digital video ad spending.

Research from Parks Associates shows that younger viewers have more easily adopted TV Everywhere than their older counterparts. Aside from age, those younger adopters aren’t very different from traditional cable subscribers. They have similar education, income, even marital status.

Pay-TV operators, especially those who are struggling with declining subscriber numbers, eventually will be more aggressive in the promotion of TV Everywhere products if they want to reduce churn and engage younger audiences.

As more users move to online video, advertisers will have to follow.

Getting the right advertising to those users, and doing it in a way that doesn’t increase opex or capex, will be critical. Equally as critical will be the ability to deliver those ads seamlessly, offering users the quality TV experience online and on their mobile devices that they already get on television sets.



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