Three OTT service challenges and their solutions!

Keeping service brand front-and-center

For big-name D2C services like Netflix and Amazon, remaining visible to consumers is not a big problem. Most connected TV devices preload the apps and give them a prominent place in the user experience. For smaller providers, their brand could be their biggest asset, according to Arlen Marmel, General Manager of VRV, Ellation:

“I don’t see a lot of people wearing Netflix T-shirts. There are a lot of people wearing Crunchyroll t-shirts, there are a lot of people wearing Formula 1 t-shirts, and other brands they care about deeply. We have to cultivate that. In a pull world, we have to work as diligently as we can to make sure these brands are long-standing and front-and-center for the consumer.”

Video services that identify with a well-defined niche can tap into the passion of the group to help others find the service. Branded merchandise, events, and shareable content are a great way to let the group display their passion and reinforce the value of the service to others in the group.

Short-timer bingeing subscribers

One problem faced by D2C providers is customers that sign up for a free video service, watch all the episodes of a show of interest, and then quit without paying for more than a month or two of service. The behavior is becoming an increasing problem for D2C services. Alexander von Woikowsky, Managing Director of 7TV, a German joint venture between Discovery and Prosiebensat.1, says he leans on multiple business models to help solve the problem:

“With the combination of different business models that we have in our service, we may lose the customer as a subscriber, but our ambition must be to keep him in the universe of our service. We can still keep him in the free world. Then, when we hit the right content for him again, we can upsell him to another pay service.”

In other words, a customer is still a customer even if they aren’t currently paying for service.

Conversions and effective marketing

An effective marketing plan is essential to help people find a D2C service. However, marketing doesn’t end once a consumer signs up for a free trial. What if your conversion rate, the number of people that sign-up compared to the number of people that trial the service, is very low? When I asked Dan Fahy, Vice President of Commercial and Content Distribution, at Viacom what the biggest challenge for D2C services was, he went straight to free-trial conversions and his suggested solution:

“Conversion from trial to paying, which drives your subscriber acquisitions, which goes to your marketing effectiveness. Marketing is a big chunk of your D2C business, and if that’s not effective, it’s a struggle.”

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OTT to Make up 46% of Western Europe TV Revenue by 2023

Over-the-top (OTT) revenues are growing fast in Western Europe. According to Digital TV Research, OTT revenues for TV shows and movies (including ad-supported content) will more than double from $10 billion in 2017 to $23 billion in 2023. At that time, OTT will count for 46 percent of total TV revenue in the region.

During the same period, pay TV revenues in Western Europe will fall by $2 billion. While the trend is clear, don’t look for OTT to eclipse pay TV for several more years.

“I don’t think that OTT revenues will overtake traditional pay TV until about 2027 so there is still some life left in traditional pay TV. There hasn’t been much cord-cutting in Western Europe,” says Simon Murray, principal analyst at Digital TV Research.

Looking only at subscription services, Digital TV Research says revenues will reach $12.5 billion in Western Europe by 2023. That’s an increase from $4.4 billion in 2017. While it’s a fast-growing area, it’s dominated by one player: Netflix counted for 52 percent of the pool in 2017, and will take 57 percent by 2023.

“Western Europe’s traditional pay TV sector is maturing rapidly, but there is still a lot of growth to be had in OTT—including AVOD and SVOD,” Murray says. “AVOD is particularly strong in Western Europe given the market positions of the free-to-air broadcasters. However SVOD revenues overtook AVOD in 2016.”

Read the full report here.

Snapchat introduces new 5 min TV shows

Snapchat has introduced a new format for its original video programming. Snap Originals are TV shows developed exclusively for the app, with new 5-minute episodes released each day.

All the shows will include six-second, non-skippable ads, building an important new revenue source for the company. Snap Originals will feature prominently on the app’s Discover page and will also each have their own Show Portal. Users can swipe up from the show episode and access additional, related content, including interactive, AR experiences with selected scenes, lenses, filters and other entertaining ways to share the show with friends.

Snapchat already offers third-party video content under the format Shows. The company said viewer time spent on Shows has tripled since the start of this year.

Snap also announced that NBCUniversal extended its content production commitments through 2019, and Viacom has committed to creating 10 new Snap Originals. Viacom also committed to syndicating at least 500 episodes of its network’s shows to the Snapchat audience.

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Study: Consumers Who Watch Ad-Supported OTT Are Younger, Higher Income

It turns out there’s a large group of Americans who don’t watch just Netflix or other ad-free video services: 45% of consumers who regularly watch video online say they mainly watch ad-supported over-the-top services.

That’s according to a new study from the Interactive Advertising Bureau. The online-advertising trade group’s research also found that the largest audience segment of ad-supported OTT viewers comprises adults 18-34 years old, and on average they have higher incomes than the overall U.S. population (with 34% of ad-supported OTT viewers reporting income of $75,000 or more).

In addition, consumers who mostly watch ad-supported OTT services skew higher among men; black and Asian consumers; and households with children, the IAB study found.

As a cohort, ad-supported OTT viewers are harder for advertisers to reach through conventional TV (while pure subscription-based video-on-demand services like Netflix, Amazon Prime, or HBO Now do not carry advertising). On average, primarily ad-supported OTT viewers watch 10.4 hours of cable TV per week versus 14.7 hours among TV-only viewers. Meanwhile, about 52% of ad-supported OTT viewers are cord-cutters or cord-shavers, with over one-third citing “better content on streaming services” as a reason for choosing ad-supported OTT over other services.

IAB released the findings at its inaugural NewFronts West advertising event in L.A., which runs Oct. 9-10. Sue Hogan, the trade group’s SVP of research and measurement, said the study points to “the high value that brands should place with increased investment in ad-supported OTT.”

The IAB’s study defined ad-supported OTT video viewers as those who watch video through a free streaming service with ads (such as YouTube, Pluto, the Roku Channel, Crackle or Vevo); via an online pay-TV provider (e.g., Sling TV, DirecTV Now); through a streaming app that requires a cable, satellite or telco login (e.g., Discovery Go, FX app, WatchESPN, Comcast Xfinity); or through a subscription-streaming service that includes ads (e.g., Hulu or CBS All Access with limited ads).

The IAB study also found that the predominantly “ASV OTT” cohort showed higher ad receptiveness than those who mostly watch SVOD or only watch TV — which is not surprising, but a key point for marketers. About 59% of ASV OTT users agreed that “I don’t mind seeing ads if I’m getting to watch content when I want,” compared with 47% of primarily SVOD viewers and 34% of TV-only viewers.

In addition, ad-supported OTT viewers reported spending more on online subscription purchases — $119 per month — than subscription VOD viewers, at $89 per month. ASV OTT fans also are more likely to follow social influencers: 25% said they regularly watch videos from YouTube personalities, vs. 17% of SVOD-dominant consumers and 5% of TV-only viewers.

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MCNs Are Falling in Value

Multi-channel networks (MCNs) are seeing their value fall as per-hour ad income for YouTube content is reaching its peak, according to research from Ampere Analysis.

The research finds that per-hour ad revenue for YouTube content has reached the same level as that of broadcast TV in the US, and is approaching equality with broadcast globally. However while per-hour ad revenue from YouTube has grown, Ampere believes that it has now reached its ceiling in some markets.

This is having a knock-on effect for MCNs – businesses which work with a range of content creators on platforms like YouTube to help with content production, promotion and monetisation. Ampere says that since per-hour revenue on YouTube appears to be peaking, the prospects for continued growth by these MCNs look slim, as they will struggle to derive much more income from their networks of creators.

“As YouTube reaches parity per hour viewed with broadcast TV, MCNs valuations have plummeted. The market has experienced a complete reversal from 2014 when MCNs were changing hands for vast sums on the promise of future profit,” said Richard Broughton, director at Ampere Analysis.

Ampere notes that for a few years back MCNs were changing hands for huge amounts of money, particularly as traditional broadcasters acquired them to diversify their digital offerings and claim a slice of the YouTube ad revenue pie. The researcher says that some were changing hands for values which were 25 or 30 times greater than their net incomes, based off a belief that these companies had potential for impressive continued growth.

Maker Studios for example attracted million in investment from Time Warner, before being bought by Disney for $500 million on 2014; Awesomeness TV was acquired by DreamWorks animation for $120 million in 2015, and ProSiebenSat.1’s Studio 71 was valued at $425 million last year after investment from TF1 and Mediaset.

Ampere’s data however shows that per-view valuations for these companies have dropped sharply. In 2014, the average valuation per monthly view for MCNs was $0.12 (i.e. for each additional monthly view, the company price at acquisition increased by 12 cents). This figure had halved by 2016 to $0.06, and has now dropped to $0.01. In essence, this means an MCN has to bring in twelves times as many views across its network of creators as it did four years ago in order to have maintained the same value.

This drop was evidenced recently as Awesomeness was sold to Viacom for $25 million plus debt, having been valued at $650 million in 2016.

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Amazon has built its own advertising technology for OTT TV

Amazon’s mission to conquer advertising may have a new front — video ad tech.

And in this case, instead of challenging the Google/Facebook digital ad duopoly, Amazon would be looking to insert itself into a battle between Comcast and Google.

Specifically, Amazon has discussed building a proprietary video ad serving product for its own streaming business —and eventually licensing it, according to media executives familiar with the matter. Such a product would be similar to Comcast’s Freewheel or Google’s DoubleClick tools, the people said.

It’s unclear how far along Amazon is in the process of developing this ad serving product. The company is not directly taking meetings to pitch its own ad server, one person said. Instead, the potential product has come up during discussions Amazon is having with media companies about its emerging programmatic ad business via Fire TV devices.

Video ad serving software helps big media companies make sure that the right ads run at the right time and keeps competitor’s ads away from each other,so Coke ads don’t run right next to Pepsi, for instance.

Freewheel, which Comcast acquired in 2014, has been the category leader for a while. But more recently, Google has made an aggressive play with its own alternative.

The stakes are high. While getting big media companies to use their ad tech over a competitors doesn’t necessarily provide Comcast or Google’s a lock on ad budgets, it does enable these companies to get their hooks deeper into media partners.

Playing such a central role in delivering a media companies’ advertising infrastructure provides a Google or Comcast with loads of data on viewership and ad patterns. Plus, the more successful a company like Google is at helping a giant like CBS manage its video ads business, the more opportunities to deepen such a partnership. Or so the thinking goes.

In Amazon’s case, the company is now a solid number 3 when it comes to pure digital advertising. And with the growth in popularity of its Amazon Fire TV device, it’s rapidly growing its footprint in OTT advertising.

Amazon has historically built its own ad tech, first to serve its own ad business before eventually licensing it to partners. But when it comes to video ad serving, Amazon currently employs third parties when streaming events such as The Laver Cup or select Premier League Soccer events.

While media companies may view working Amazon warily (as they already do Comcast and Google), Amazon could have two clear advantages in this sector, if it were to go ahead and build and license an ad serving product.

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Study: 43% of OTT apps abandoned 1 month after download

Some 55 per cent of US households subscribe to at least one streaming service, according to findings from Deloitte, and ESPN+ is the latest example of the rising popularity of OTT, having garnered over 1 million subscribers within the first five months.

But many of these apps experience an unusually high churn rate, according to CleverTap, a mobile marketing and user engagement platform, which has analysed the OTT apps space by reviewing data points across 100 million devices. The report – Industry Benchmark Report for Media and Entertainment (OTT) Apps – which examines performance metrics from some of the most successful media and entertainment apps, found that 43 per cent of all apps are abandoned just one month after download.

Other key findings include:

– OTT applications experience 67 per cent churn within the first two weeks;
– Conversely, only 26 per cent of new OTT app users engage media at least three times within the first month.
– Bringing insights from 8.7 billion data points, the report helps growth marketers benchmark against some of the most successful apps in the OTT industry.
– The report also includes proven strategies and best practices to help OTT companies optimise their content offerings.

“There’s intense competition in the OTT space, and thus the need to differentiate the offering with exclusive content and a superior customer experience becomes all the more important,” advised Almitra Karnik, Global Head of Marketing at CleverTap. “CleverTap’s OTT Benchmark Report provides the essential metrics that mobile marketers can use to benchmark their app’s performance and use data-backed #CleverTips to help engage customers at each stage to grow their app’s revenue.”

“It is fundamental for marketers to monitor the user journey while analysing OTT app’s performance,” asserted Elliot Goldwater, Director, BD & Partnerships at SendGrid – one of CleverTap’s email delivery partners. “Unless monitored end-to-end, key issues can get overlooked. CleverTap’s Industry Benchmark report enables marketers to look at this complete picture, keeping the user at the centre. Along with benchmarks for essential metrics at each lifecycle stage, it provides benchmarks for the percent of users that advance to the next stage, and in how long. These metrics make the report unique — and necessary for every data-driven marketer to have.”


Headlines would suggest that TV is dead, or at least is enduring a slow death.

The reality is that TV viewing is very different than what it was three years ago, let alone 10. How we define “TV” is still being debated. Is it the content, device or pipe that presents it to the viewer? But one thing is clear: With the proliferation of devices now powering TV content in the home, the living room dynamic has radically changed.

The new living room is a hybrid environment, home to the best of linear and digital television. While viewers are increasingly choosing to build their own schedules—comprising a blend of live, on demand and DVR—they tend to gravitate toward the best (and usually largest) screen possible.

FreeWheel’s latest Video Monetization Report (Q2 2018) shows that with every quarter, increasing volumes of digital and dynamically delivered video advertising are accessed via set top boxes (STB) and over-the-top (OTT) devices on the big screen. This now accounts for 57 percent of all non-linear impressions.

As a result, the new living room is not only the point where traditional TV viewing and online content converge, but also the center of a multi-viewer experience. With multiple members of each household gathered around a single TV set powered by an increasing number of devices, the potential for ads placed within premium digital video and broadcast content is vast.

The power of TV, in all its incarnations, to drive advertising impact is greater than ever. Yet, so far, it remains underutilized by many advertisers. As TV evolves, knowledge and capabilities across the value chain must evolve, too.

Keeping pace with viewers habits
The advertising industry must adapt and catch up with the viewing habits of the modern consumer. Unfortunately, legacy organizational, technology and measurement challenges have prevented advertising from following the audiences.

With enhanced addressability capabilities coming to the big screen, advertisers should be following eyeballs and working around the technology limitations that exist today to capture reach and precision opportunities in the most compelling advertising environment: premium video.

The FreeWheel Council for Premium Video has released “A Buyer’s Guide to the New Living Room,” which is intended to help those in the advertising planning and buying world fully grasp the opportunities offered by OTT, STB VOD and addressable linear, and how a holistic approach can harness them.

Some of the key takeaways from this guide:

– Become a subject matter expert in the new living room to gain advantage for your clients while these channels are still nascent and growing
– Create a plan using complementary channels to balance reach and precision, leveraging the common and unique attributes of each
– Work through measurement hurdles and leverage the tools and KPIs that are available to access these engaged yet underserved audiences
– Personalize messaging and manage frequency through addressable options with creative diversity on all campaigns delivered to the new living room
– Optimize for scale by adjusting your KPIs for platforms as necessary such as viewability targets in channels that aren’t able to be measured
– Globally, 81 percent of people use their TV set to watch broadcast TV at least once a month, making it the most popular media channel. Combined with streaming video (69 percent of all adults use the technology, but 86 percent of those ages 18-36), which is increasingly being viewed on the big screen, there is no question that the living room remains a core environment to engage with valuable audiences at scale.

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SVoDs hit by churn

A consumer survey from analyst firm Juniper Research has found that increased churn rates are being faced by video streaming services such as Amazon Prime (-2.9 per cent) and HBO Now (-19.2 per cent) in key markets such as the UK and the US.

Contrastingly, Netflix outperformed its rivals; showing positive adoption rates in both the US and UK (6.3 per cent and 7.7 per cent), opposing the belief that services are discontinued after a trial month.

Juniper’s latest research, Digital TV & Video: Consumer Attitudes and Network & OTT Strategies 2018-2023, found that consumers are burdened with numerous SVoD (Subscription Video on Demand) subscriptions. For example, the survey highlighted that Chinese and US respondents acquire an average of 3 subscriptions each, in comparison to 2.5 in the UK.

“The use of multiple subscriptions suggests that no one provider offers enough to currently satisfy consumers,” noted research author Lauren Foye. “Juniper finds a growing danger in users reducing, or switching SVoD subscriptions, as monthly fees inevitably rise as a result of ever-increasing content spend; Netflix alone is set to spend $13 billion this year.”

The research also found that the curation of content is set to become a growing issue, with the need to engage consumers as critical, lest SVoD providers see unsatisfactory services cancelled. Juniper urges collaboration between OTTs and traditional platforms. For example, Sky hosting Netflix content via its Q platform; a slick and refined user experience.

The survey identified the importance of broadcast. 40 per cent of UK survey respondents stated that they streamed live sports, yet only 6 per cent of these individuals watch sports through online channels alone; consequently streamers continue to utilise broadcast sports.

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YouTube makes video ads more actionable, driving 3.5% CTR for Vodafone


Google’s YouTube is testing video ads that give marketers and brands more ways to interact with viewers who respond to a call-to-action message, per a statement shared with Mobile Marketer. YouTube is experimenting with extensions for its TrueView in-stream ads, which viewers can skip after five seconds, that let audiences do things like find a movie showtime, download an app, book a trip or watch another brand video.

Chili’s, 20th Century Fox, Maybelline and Vodafone are among the brands using YouTube’s extensions for mobile video ads. Vodafone saw a 2.3x incremental lift in ad recall and a 3.5% click-through rate (CTR), a 785% increase from a regional benchmark, from a video ad that had an extension.

The extensions will be available to all advertisers soon, per YouTube.
YouTube also partnered with market research firm IRI to let consumer packaged goods (CPG) advertisers measure their campaigns on the platform. Oracle Data Cloud and Nielsen Catalina Solutions (NCS) already offer measurement solutions for YouTube, while Nielsen MPA helps marketers measure the offline effect from video ads, per YouTube.


YouTube’s rollout of video ad extensions likely will help mobile marketers and brands see more immediate and significant effects from their campaigns on the video-sharing platform. Calls-to-action have been a hallmark of direct-response advertising for years, but the response rates can be very slim when those ads are shown to a broad audience. YouTube’s ability to track individual viewers and keep a record of their viewing habits may help advertisers boost CTR and other kinds of actions because of better ad targeting.

Some of the ad extension formats, which have been in beta testing, have already yielded results. As Google explains in a case study, the Chili’s restaurant chain used “form ads,” a TrueView format geared for lead generation, to urge viewers to sign up for its My Chili’s Rewards loyalty program. Chili’s sought to raise awareness for its 3 for $10 deal, which includes a non-alcoholic beverage, appetizer and entrée for a flat price, and added a sign-up form to let viewers submit their name and email below a video ad. Chili’s campaign led to 7,800 form leads for the restaurant chain, per Google.

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