Facebook Watch, which initially launched with a mix of short- and long-form TV show-like programming, will soon include content from regular creators.
“We are now bringing videos from Pages into Watch,” the company announced in a blog post this morning. “In our testing, we’ve found that people enjoy discovering and watching a combination of shows and videos in Watch — and for creators, this means their videos may be eligible to show up in Watch to be discovered by a broader audience.”
A Facebook page is a public profile specifically created for businesses, brands, celebrities, causes, and other organizations. Unlike personal profiles, pages do not gain “friends,” but” fans,” which are people who choose to “like” a page.
In addition to widening the content on its Watch platform, Facebook announced plans to open up Ad Breaks to more creators, starting with those who are creating longer, original content that “fosters a loyal community.” The company also plans to open up fan subscriptions to more creators in the coming months.
“We’ve been testing a way for fans to support creators they love by pledging $4.99 (USD) per month in exchange for perks like exclusive content and a special badge highlighting their status as a supporter, and we are now expanding to more creators,” the blog post read.
On the interactive side of things, Facebook is launching a slate of new shows that utilize interactive features like polls and quizzes with the aim of fostering a greater sense of community between creators and users.
“We’re starting with polling for both Live and on demand videos, as well as gamification for Live,” the blog explained. “With these tools, our partners can add a range of new interactive features to videos such as: polls, quiz questions, challenges, and more. These can all be used within an individual video or to create a standalone game show.”
In the coming weeks, a range of creators will begin to incorporate polling and gamification into their shows and videos, including Brent Rivera and That Chick Angel. Facebook also announced several interactive game shows that will be launching in the coming weeks:
– “Confetti” by INSIDER: A live interactive game show made in partnership with INSIDER that will air daily. It will challenge people to answer pop culture trivia questions alongside — and with the help of — their friends. Players can see which friends are playing at the same time, and be able to see how friends answered questions. Players who answer all questions correctly will split a cash prize.
In its latest report on global advertising market trends, released June 18, 2018, MAGNA forecasts media owners’ net advertising revenues (NAR) to grow by +6.4% to $551 billion in 2018 in the 70 countries analyzed by MAGNA. That’s the strongest growth rate since 2010.
MAGNA increases its forecast for 2018 following strong market performance in the first few monthsg. +8% in the US in the first quarter, and +31% for Google and Facebook globally.
The 2018 growth (+6.4%) is an acceleration from 2017 (+4.5%), mostly due to the five billion dollars of incremental ad spend generated around cyclical events in 2018 (US Mid-Term elections, FIFA Football World Cup, Winter Olympics). Neutralizing cyclical revenues, the 2018 growth would be +5.5%, in line with 2017.
Global ad spend remains strong thanks to robust economies (US +6.4%, China +10%, Russia +12%, India +12.5%) and convalescent/recovering economies (Latin America +10%, Middle East +9%). Western Europe lags behind due to low economic growth and political uncertainty (+4.1%).
Digital advertising sales will grow by +15.6% in 2018 to reach $250 billion or 45% of global advertising revenues. Mobile ad sales reached half of total digital spend last year, and will increase to 62% of total digital spend this year. Digital will to represent half of the world’s total advertising sales by 2020.
In the US, advertising sales will grow by +6.4% in 2018 to reach an all-time high of $207 billion, including $4 billion dollars of incremental revenues from cyclical events. Excluding cyclical revenues, underlying growth this year will be 4.7% (similar to 2017).
US digital ad sales will grow by +15% this year to pass the $100 billion milestone (52% of total ad sales). Non-digital ad sales will shrink by -4.6%. National TV ad revenues will be flat while local TV will grow by +10%, OOH by +2%; print ad sales will decrease by -17% and linear radio by nearly -4%.
Next year (2019) will see a slower growth in the US: +2% in the absence of cyclical drivers, although core growth will also slow (+3.6%).
According to Vincent Létang, EVP, Global Market Intelligence at MAGNA and author of the report:
“Global Advertising Spending is going to expand by the strongest growth rate since 2010 this year, as several of the largest markets – including the US, Russia and China – experience robust economic growth. Many consumer packaged goods and automotive brands are freezing or cutting ad expenditure, which hurts the revenues of traditional media types, while digital media, used by millions of small and local advertisers, seems to be immune from slow-down so far. Linear television will enjoy modest growth in most markets however, as cyclical events bring incremental budgets and strong pricing (CPM inflation), offsetting shrinking volume (ratings decline).”
Globally, net media owners advertising revenues (NAR) are projected to grow by +6.4% in 2018, to $551 billion. This is above MAGNA’s previous forecast (+5.2% published December 2017) due to stronger-than-expected market performance year-to-date for digital media sales in particular. For instance, advertising spend grew by an impressive +8% in the US in the first quarter, while for Google and Facebook advertising revenues grew by +31% globally over the period, showing no sign of slow-down.
The major cyclical events taking place in 2018 (The FIFA World Cup in Russia, Mid-Term elections in the US, Winter Olympics in South Korea) will generate five billion dollars of incremental ad spend this year (two thirds of it in the US alone), thus contributing one percentage point to global ad growth. Excluding cyclical revenues, global underlying advertising growth would be +5.5% in 2018, i.e. level with 2017.
Global advertising demand remains strong in countries enjoying a robust economic environment (USA +6.4%, China +10%, Russia +12%, India +12.5%), and is recovering in convalescent/recovering economies (Latin America +10%, Middle East +9%). Western Europe is lagging behind due to low economic growth and political uncertainty, but double-digit digital growth and a minor boost from FIFA World Cup on European soil, will ensure moderate growth (+4.1%).
69 of the 70 ad market analyzed by MAGNA are expected to show some level of growth this year, with Singapore the only market forecast to shrink this year. The fastest-growing regions in 2018 will be Central & Eastern Europe (+9.2%) and Latin America (+9.6%), followed by Asia-Pacific (+6.9%) and North America (+6.3%).
Linear television ad revenues will grow again in 2018 (+3% to $185 billion), thanks to the return of even-year cyclical events, despite the continued, worldwide erosion of reach and ratings. Without the incremental even-year ad sales, TV would be just flat this year (+0.4% globally, -1.4% in the US).
The resilience of television is also caused by sustained demand from big consumer brands in CPG/FMCG sectors (food, drinks, personal care and household goods), media/entertainment, restaurant chains and pharmacy (where allowed). Because some marketers are concerned about brand safety and ROI accountability in digital environments, many brands have paused the long-term diversification of their media mix towards digital formats and have instead remained loyal to traditional linear television in the last 18 months.
That sustained demand for TV inventory, combined with declining supply (ratings) is driving high CPM cost inflation (ranging +5% to +15% in key markets while economic inflation remains below 2%). Strong TV pricing, however, is barely offsetting declining volumes resulting in flat revenues for broadcasters in the France, UK, Italy, Japan and the US (excluding cyclical ad spend).
Television is evolving too. “Advanced television” advertising techniques are gaining momentum in markets like the US and the UK. That includes live linear targeted ad substitution (household-addressable campaigns), on-demand TV content on television sets, and more generally the ability to buy qualified audiences (auto intenders, families with babies or pets…) with less wastage and better engagement, compared to traditional age/gender targeting. Most “advanced” TV campaigns these days are based on cable or satellite subscription and managed through set-top boxes, but the ubiquity of “smart” connectable TVs and over-the-top (OTT) devices creates the opportunity to target all TV viewers, including “cord cutters”, on the big screen around “safe” television content, through on-demand or linear consumption. Companies like Samsung, Roku, and others compete to provide the operating systems of television sets and offer “advanced” targeted advertising solutions to marketers.
Global Digital advertising sales (display, video, search, social) will grow by +15% this year, to $250 billion, slowing only slightly from 2017 (+18%), while offline ad sales (linear television, print, broadcast radio, out-of-home) will decrease by -0.2% to $300 billion. Digital media sales will represent 45% of total ad sales by the end of 2018 and MAGNA anticipates that it will reach 50% of global ad dollars by 2020. It will reach that milestone this year in the US, while the market share of digital media sales is already beyond 60% in markets like the UK or Sweden.
Digital ad spend will continue to be driven by Social (+31%) and Video (+27%) formats this year. Search will grow by +14% to $47 billion and remains the largest ad format.
Despite the scale reached by digital media spend and the controversies that hit some of the media owners in the first half of 2018, digital ad spend has showed no signs of slow-down yet. The combined advertising revenues of Facebook and Google grew by +31% year-over-year in the first quarter of 2018. Nevertheless MAGNA does anticipate a mild slow-down in the second half of the year but so far, spending from small, local, direct advertisers – often re-allocated from below-the-line marketing channels (direct mail, yellow pages) – continues to grow quickly, offsetting any slow-down in the spending from brand advertisers.
The majority of digital ad sales (62%) is now generated by impressions and clicks on mobile devices (mostly smartphones). Mobile ad sales will grow by +30% in 2018 while desktop-based ad revenues will shrink (-2%), due to ad blocking and the rapid shift of digital media consumption towards smartphones and away from computers.
Other media categories will struggle to various degrees this year as they don’t benefit from the pricing power and cyclical drivers of national television. Global Print NAR will decrease by -11% to $54 billion. Radio ad sales will decrease by -2% to 28 billion. This reflects legacy ad sales only(paper, linear broadcast spots). When and where we add an estimate of the digital advertising sales of publishers and radio broadcasters or audio pure-players, it mitigates but doesn’t offset the revenue decline. This is because online display pricing is poor and music streaming is moving towards a premium ad-free model, limiting ad inventory. Podcasting is mostly ad-supported and becoming increasingly popular; it has the potential to rejuvenate the audio media industry, in combination with the rise of voice-activated smart speakers. Just like the television industry did, the audio media industry needs to develop an on-demand leg to balance the linear leg.
The only “traditional” media category to show moderate growth in 2018 will be Out-Of-Home. Global NAR is forecast to grow by +3.4% to $33.5 billion. OOH does benefit from cyclical events but the main driver remains the roll out of digital OOH inventory. DOOH NAR will grow by +16% this year to reach $5.7 billion as new airports, malls and transport system become available for media buying this year. For instance the “old” DOOH system in the London underground is about to be upgraded and expanded, and thousands of screens are to be rolled out in the New York Subway.
Media companies have been cashing in on the world’s appetite for the royal family this spring, and ITN Productions, the in-house production company for U.K. TV news and content provider ITN, was no exception.
ITN Productions’ revenue has mainly come from selling original and syndicated digital content to publishers like the Daily Mail, HuffPost, the Guardian and The Independent to use on their own sites. For the last two years, ITN Production News been distributing this content on YouTube.
ITN Productions has seen a 40 percent growth year over year in revenue from its news, entertainment and royal family coverage on YouTube, although the company wouldn’t share actual numbers.
“Initially, we used this content to grow audiences online, but the revenue from the platforms has become much more prominent. It’s showing greater movement in a positive direction, so we’ve been paying it more attention,” said Joanna Boyd, video syndication account manager at ITN Productions, speaking of YouTube and Twitter.
SocialBlade data shows total subscribers for the royal channel have more than doubled since the beginning of April to 320,000, and average views per day are 1.2 million, up from 300,000 since early April due to an increase in content around Prince Louis’ birth and Prince Harry and Meghan Markle’s wedding. Subscriber growth for ODE and ODN have been steadier, with 300,000 and 500,000 subscribers, respectively.
Armed with the knowledge that people are avid consumers of royal family content, ITN Productions began focusing on this YouTube channel last year, posting more content — footage that would never make it on broadcast, like Queen Elizabeth II getting off a train, for instance — and creating more video playlists to keep people on its channel as well as suggesting relevant videos at points where people drop off.
“We’ve seen the growth in the last year when we started focusing on it as a core part of the news cycle,” said Boyd, adding that on June 14, the second top news story featured the queen and Markle visiting the county of Cheshire. “That’s how big they have become to be the second news story.”
A royal wedding and birth in quick succession is unlikely to happen again, but Boyd is confident the interest will continue. “The children have huge appeal on our channel; people want to watch them grow up,” she said. Equally, the popular videos are ones that typically fall outside the mainstream, like Prince Harry and Markle attending Prince Charles’ 70th birthday party, with 1.6 million views. “Everyone has the royal wedding; we have the story afterward,” Boyd added.
The FIFA World Cup, one of the most popular sporting events in the world, started today with a matchup between Saudi Arabia and Russia. The games, which will take place June 14 – July 15, are expected to draw in over 3.4 billion viewers (almost half of the world’s population), according to the research company GlobalWebIndex.
The event is expected to be watched through every device possible, from smart phones to Laptops to Connected TVs. But for those fans who want to get a closer look at the matchups, without shelling out $1000, Facebook’s Oculus has announced that it will make several of the matches available in VR for free. In addition to the watching the game in VR, Oculus is giving users the ability to watch the games with friends via a co-viewing app Venues.
Launched last month, Venues lets users watch 360-degree live streams of concerts, sports events and comedy nights together with others in VR, while also giving users the ability to speak to each other, just as if they were really sitting next to one another. The app, along with the soccer streams, can be found on Oculus Go and Gear VR, where they can be watched by U.S. audiences. Venues will be streaming four games starting with Sunday’s face-off between Mexico and Germany, followed by Portugal vs. Morocco on June 20, Brazil vs. Costa Rica on June 22, and England vs. Panama on June 24.
In addition to the World Cup, Oculus has also been live streaming a weekly MLB game and weekly standup comedy acts from the Gotham Comedy Club, among other events. The move is part of Facebook’s plan to make Oculus more than just a place to play video games, making the Oculus VR Headsets more attractive for older generations or those who are not into gaming. To that end, last month the social media giant launched a dedicated video viewing app called Oculus TV. The new app acts as a virtual home theater that sits user down in front of a custom-built 3D environment with (what seems to be) a massive screen and virtual seating area. Users have several apps to choose from including Netflix, Hulu, Facebook Video, ESPN, and free OTT TV service Pluto TV.
Channel 4 has announced it’s become the first UK broadcaster to partner with Google’s voice control platform Google Assistant. The integration will mean owners of a Google Home or Google Home Mini device will be able to use the assistant to control Channel 4’s on-demand hub All 4, via Chromecast.
The broadcaster claims users will be able to give commands such as “OK Google, play Googlebox on All 4,” and the Google Assistant will be able to directly load up the All 4 app and the series. Channel 4 made All 4 available on Chromecast back in 2015, and Chromecast has been compatible with Chromecast since last year, but is seeking out new deals with Chromecast’s existing partners to join the dots and make their services compatible with Google Assistant.
The new partnership demonstrates the fine line broadcasters like Channel 4 have to tread between facing up to Google’s threat as a competitor for ad spend, while also partnering with the tech giant where it’s beneficial to do so. Channel 4 has been one of the more active UK broadcasters in joining TV cooperatives designed to counter the digital threat, such as the European Broadcaster Exchange, and struck a direct blow against Google earlier this year as it won a BT Sport advertising contract previously held by Google.
“We have a great track record in partnering with platforms on new innovations, so we’re really excited to be able to launch our first major voice integration with Google, enabling viewers to watch Channel 4 shows quickly on their big screens at homes” said Carl Pfeiffer, head of distribution and platform partnerships at Channel 4.
“We are delighted that Channel 4 viewers in the UK will be able to easily access their favourite TV programmes using simple voice commands. One of the joys of Google Home is to assist in making life’s tasks easier, simpler and more fun for everyone,” said Edward Kenney, head of UK product partnerships at Google Home.
We might expect more partnerships for the Google Assistant to be launched over the coming year as it competes for dominance with Amazon’s Alexa. Just earlier this week, Google announced a partnership with French supermarket Carrefour which will see the two work together on a new “a new grocery shopping experience”.
“There’s a whole thing going on in Netflix right now and in Silicon Valley saying, ‘We’re going to use algorithms to make creative decisions.’ I say ‘posh.’ You can’t. It’s not like making a computer program that can work in the fixed and formal rules of chess.” —John Landgraf, CEO, FX Networks
Is big data a help or a hindrance to creativity? I had the chance to explore the topic with Michael D. Smith, a professor of information technology and marketing at Carnegie Mellon’s Heinz College and Tepper School of Business and the author of Streaming, Sharing, Stealing: Big Data and the Future of Entertainment, cowritten with Heinz College professor Rahul Telang.
Netflix has a lot of data about what we like to watch. It began collecting data years ago, when it was in the business of sending DVDs through the mail. It turned to that data when it began commissioning original movies and series. It was able to make smart decisions about what genres, directors, and actors we wanted to see, and how to fund each project based on expected viewership.
That approach has led to some critics, like FX’s Landgraf, accusing Netflix of programming by algorithm, of replacing intuition, experience, and Hollywood know-how with a computer routine. To critics, the Netflix formula produces hollow results and ignores the value of the creative process.
What Smith and Telang show in their work is that Netflix doesn’t use data for creative decisions; it uses data to match content with viewers. Netflix is excellent at getting out of creative peoples’ way, Smith says. Unlike studios, it lets its talent do its work without a lot of notes or advice. When projects are completed, it uses its data to match them with viewers who will mostly likely enjoy them.
Doing so not only drives views, it also helps with discovery. Netflix churns out a lot of original content, and subscribers could easily feel overwhelmed if they had to wade through it all. But they don’t—they only see the titles Netflix is pretty certain they’ll like.
It’s something the big broadcasters can’t do, Smith notes. Broadcasters can only show one program at a time, so they go with whatever they expect to get the biggest return in each slot. Netflix doesn’t have to turn every show into a blockbuster, so it’s free to create niche hits that appeal to specific groups. The power of Netflix’s data is in microtargeting.
With that in mind, Netflix’s four-picture deal with Adam Sandler starts to make more sense.
Hollywood creatives have been surprisingly vocal about their dislike of Netflix. Consider that Steven Spielberg joined the Netflix hate squad in March, saying Netflix output should be considered TV movies and not be eligible for Oscars.
Some of this comes from wanting to protect the traditional theater model or the glamour of a theater opening. Some people look at Netflix’s data and think it has an unfair advantage.
“Netflix can do things that would be very difficult for Hollywood to copy,” Smith says. “There’s a quote that we use in the book where [Netflix chief content officer] Ted Sarandos is sitting around a table of TV execs and he says, ‘The difference between my business model and everybody else here is that we can hit singles and doubles and the business is just fine.’ I think what he’s saying is the traditional business of Hollywood is, blockbusters are everything. You’ve got to have the blockbusters. It’s hard to sell a piece of niche content in any of the existing channels. What Ted Sarandos is saying is that we can sell niche content. If I can find an audience who likes this and is going to subscribe next month, it doesn’t have to be a big audience. I just have to be able to find them.”
In the 2018 Oscars, Netflix had two big winners, Mudbound, which was nominated for four awards, and Icarus, which won best documentary feature. Both were movies Netflix acquired rather than commissioned, but the company still used its data to find each an audience (after brief theatrical runs). Some Academy members were vocal about not wanting to vote for a Netflix movie.
While studios condemn Netflix’s business model, they’re doing their best to reproduce it. The mergers and acquisitions we’re seeing these days are all about major media companies trying to own customers’ data so they can serve targeted content the same way Netflix does. Models are changing, and studios see they’re at risk if they don’t own the data, so there’s a race to best serve the viewers.
Hastening the arrival of a world in which simulation is indistinguishable from reality, startup Lyrebird has launched an online service that can imitate a person’s voice.
Given roughly a minute of voice samples from a specific person, the upstart’s system can, via an API, convert supplied text into spoken words that sound a lot like the human source.
As if to establish the technology’s potential for spoofing political figures and spreading fake news, Lyrebird has provided audio clips that feature the voices of Donald Trump, Barack Obama, and Hillary Clinton, saying sentences they never said themselves.
The deception isn’t perfect. The voice samples provided sound processed and often the phrasing sounds off. But two years ago, University of Alabama at Birmingham researchers demonstrated that voice impersonation attacks could be crafted to fool automated systems between 80 to 90 per cent of the time and human listeners about half the time.
Lyrebird’s simulated politicians already sound fairly convincing and could be more so with attentive post-processing and background noise added to mask audio artifacts. Further reinforcement may be possible using real-time video face manipulation.
The startup suggests there is a wide range of applications for the technology, such as speech synthesis for people who have lost their voices. And in what’s sure to be a right-to-publicity litigation bonanza, it also suggests co-opting a celebrity voice to serve as a personal assistant, to read text aloud, or as a character in video or gaming products.
The company, based in Montreal, Canada, was founded by three University of Montréal PhD students, Alexandre de Brébisson, Jose Sotelo and Kundan Kumar. Sotelo and Kumar, along with faculty advisors Aaron Courville and Yoshua Bengio, coauthored a research paper [PDF] on using neural networks to generate audio from training samples. The team will be at the ICLR AI conference in France this week discussing their work.
On its website, Lyrebird highlights some of the ethical issues arising from its technology and API. The company says it wants people to understand that voice recordings aren’t necessarily trustworthy.
“Voice recordings are currently considered as strong pieces of evidence in our societies and in particular in jurisdictions of many countries,” the company says. “Our technology questions the validity of such evidence, as it allows [someone] to easily manipulate audio recordings.”
It may also provide plausible deniability for anything actually caught on tape.
Lyrebird is not alone in its effort to enable mimicry on demand. Adobe last November showed off Project VoCo, software it described as Photoshop for audio. VoCo, currently under development, is sound editing software that provides a way to edit sound files by re-typing a speech-to-text track associated with a spoken audio file, given about 20 minutes of audio training samples.
During the demonstration, Adobe developer Zeyu Jin offered reassurance that his company has been exploring safeguards against forgery using digital watermarks.
Marketers plan to dramatically increase their budget commitments to connected TV (CTV), according to the latest SteelHouse survey of both brand-side and agency marketing professionals.
The survey, conducted by independent consulting firm Advertiser Perceptions, found that more than three-quarters (78%) of marketers surveyed plan to buy ad inventory on streaming TV within the next 12 months and while only 2% of those surveyed said they never used video in their ads, 49% use video frequently, 38% use it occasionally, and 11% use it in all campaigns.
The data also showed that an average of 30% of total advertising budgets are allocated to digital video across multiple channels, with 28% of that going to social platforms, 26% to in-stream, 20% to traditional local or national TV, and 13% to in-unit ads. But the survey found that it was the newest category, CTV, also described as IPTV or OTT, that made the strongest impression, garnering 12% of planned video spend.
The survey also found video measurement was still evolving. The top three KPIs for evaluating video inventory were completion rates (49%), impressions/reach (46%), and quality scores including viewability & fraud (44%). However, SteelHouse found that there were differences between marketers and agencies. Marketers identified impression/reach (48%), completion (47%), and click-through (44%) as the most valued metrics, while agencies chose completion (53%), quality scores (45%), and in-target delivery/GRPs (comScore, Nielsen, etc.). Sales attribution was low for both (28%).
With peak TV hovering at almost 500 scripted shows alone, for many content providers the question is not how to break through that glut with a standout original of their own but instead how to make sure the audience can find the content they will connect with on their specific platforms.
“Roku has over 5000 channels,” Rob Holmes, head of programming for the OTT service, said at the ATX Television Festival Thursday. “Our purpose was really to make it easy to find free stuff. …We worked with a variety of partners to make…sort of an end-cap, like you’d find in a supermarket. [The free content] is curated into this experience that’s front and center on the platform.”
Holmes acknowledged that as the landscape changes, there is an “increasing challenge to highlight the great stuff that’s there.”
“We’re going to leave the super high quality, must have, must pay [programs] to the others who are doing it very well,” Holmes said of Roku’s content plans.
For some, attracting an audience without focusing on originals is also about the sheer diversity of offerings.
“We set out to basically reinvent television. We were the first channel to present multi-channel television [online],” Dwayne Benefield, head of Playstation Vue, said, adding that the reason they have been able to have the high ratings they have is because they are doing something digitally that other streaming services are not yet.
Vue also uses “channels” as a way to further curate its content and help users navigate the large amount of choices they have, which Benefield acknowledges could go away in the future but for now has helped the audience narrow those choices down.
While originals are an important side to Hulu’s business, the acquisitions are key, too. Curating content for which the audience is clamoring is key there, and series such as “Golden Girls,” “Boy Meets World” and “ER” have been proven performers in getting viewers staying on the platform for days at a time. “ER,” for example, attracted more than 35,000 bingewatchers who watched every single episode within the first two months it was available on the service.
“We look for those shows that are sort of the comfort food to blend in with [originals like ‘The Handmaid’s Tale’s’] intensity,” said Lisa Holme, vice president of content acquisitions at Hulu.
Hulu also expanded into the live television experience to provide consumers who cut the traditional cable cord a chance to watch series when they air in a more traditional time period.
But whether or not it will expand into hosting or creating live events the way YouTube has, Holme says it’s about, “What’s the right content that matches the right business model that hopefully matches the delightful consumer experience?” So while there are no solid plans to expand in that way today, “[it] could come some time,” she said.
As the success of series such as “The Handmaid’s Tale” proved for Hulu, the evolving landscape does often require the creation of original series to push streaming services forward in a bigger way.
YouTube Red also saw success with “Cobra Kai” last month and certainly hopes to continue it with series such as “Impulse” and “Origin.” The service, which is rebranding to YouTube Premium, gets a lot of pitches for high school set series as well as tech-based shows, said head of scripted drama Jon Wax. But that’s not all they want to be.
“On the drama side, we’re definitely looking for some more premium content that could compete with our brethren…but with probably a slightly younger bent for our audience,” he said.
Both Hulu and YouTube are open to acquiring series that started their lives on other networks. But both Holme and Wax said that the decision over whether or not to “save” someone else’s original comes down to if the “economics of the show and the size of the audience” match.
“The reality is that often when a show has declined over time and lost some of the audience over time and the network decides not to continue with it, that was the right decision,” Holme said.
Look for the over-the-top (OTT) video market to show impressive growth over the next five years. PwC released its Global Entertainment and Media outlook 2018-2022, and forecasts that the OTT space will show a compound annual growth rate (CAGR) of 10.1 percent. The only segment in the entertainment space with a higher CAGR is virtual reality with 40.4 percent, but that’s coming from a low starting point.
As the chart below illustrates, internet advertising, video games/e-sports, and internet access will also see strong gains. Only magazines and newspapers show a decline.
While Netflix is the dominant player in the OTT space and Amazon also invests heavily in content, PwC notes that Apple is making moves to be the third biggest international OTT company by sinking $1 billion in original content. Having exclusive content and the rights to high-profile sports is crucial for expanding subscribers and maintaining market share, the report says.
The growth of streaming is changing the revenue model for video, as more consumers, especially well-off consumers, move to ad-free subscription services. Over 80 percent of home video revenue will come from OTT services by 2022, PwC forecasts.
The report emphasizes the convergence taking place in the entertainment market, where companies are changing their business models to target viewers directly. While these companies have access to more data than ever, the challenge is to keep it safe and maintain the public’s trust.
“As more E&M companies enter direct commercial relationships with customers, whether selling products inside video games or signing up subscribers to OTT apps, they are assuming more responsibility for the protection of credit card numbers,” the report says. “In an age of large-scale hacks, it is natural for users to question whether it makes sense to transact so freely.”