Colombia’s OTT tax reform may lead the way internationally

Colombia’s decision to start taxing over-the-top (OTT) players may lead to other countries following suit, according to market research firm Ovum.

Ari Lopez, principal Latin American analyst at Ovum, the reform of Colombia’s tax regulation at the end of 2016 may affect the OTT industry worldwide.

“Colombia has become one of the first countries to tax OTT players, and Ovum believes that more countries will start imposing taxes on Internet companies,” said the analyst’s note.

The debate around how to tax Internet services isn’t new, but Colombia’s approach its quite innovative.

“A key question is how to tax companies that are based abroad. The new Colombian law states that banks processing payments for OTTs on credit, debit and prepaid cards must collect the tax due before sending out the proceeds, overcoming the challenge of collecting taxes from companies that don’t have a company established in Colombia,” says the analysis.

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Can Facebook Get Users to Watch Video On Their Connected TVs?

by Will Richmond

Yesterday Facebook shed more light on its plans to get users to consume a lot more video, by announcing that it will launch a connected TV app soon for Apple TV, Amazon Fire TV and Samsung Smart TV, with others to follow. In addition to the blog post, Facebook’s VP of Partnerships Dan Rose was interviewed at Code Media and provided more details on Facebook’s overall video strategy.

The connected TV app will allow users to watch videos shared by friends or Pages that they follow, live videos and recommended videos. Perhaps the most interesting use case is watching videos that you saved while scrolling your news feed.

Of course the whole idea of a connected TV app being relevant to Facebook users is predicated on the company’s aggressive push into video. In yesterday’s interview, Rose talked at length about the role of the new “video tab” in the Facebook UI which acts as a central repository for live and on-demand videos, augmenting what is seen when scrolling the News Feed.

To accelerate the appeal of videos around 5 minutes long, Facebook is also investing modestly in original video headed up by Ricky Van Veen. However, Rose made clear yesterday that Facebook’s model is very much a revenue share approach with creators. With all these initiatives, Facebook has determined that the News Feed-only user experience is not entirely conducive to optimizing consumption, thus the rollout of video tab, and now the connected TV app.

As I pointed out a couple of weeks ago, all of this amounts to a pretty significant reinvention of how Facebook wants users to engage with it going forward. So the looming question is how successful will Facebook be with this transition? The answer is vitally important to Facebook, because all of this is being done in service to one very specific goal: to drive more ad revenue from video, which is the key way Facebook can continue its 50%+ quarterly revenue growth. That ad revenue is most likely to come by shifting TV ad spending.

Interestingly, the most natural way of fueling video ad revenue would be to pursue pre-rolls, which are the industry’s workhorse ad unit and would be accepted in the video tab and connected TV environments especially if highly targeted (Facebook CEO Mark Zuckerberg has rightly pointed out in the past that pre-rolls would not be appropriate in News Feed). I asked Rose whether pre-rolls were on tap after his interview (see the 26:35 cue point below), but he was noncommittal.

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Nearly half of young millennials use ad blockers

The adoption of ad blockers by millennials could continue to be an obstacle for advertisers targeting young people, according an eMarketer’s forecast.

To put things in perspective, overall, usage of ad blockers in the US will grow 16.2% this year to 75.11 million users. That’s slightly lower than the 85 million forecast in June. So while overall usage is not yet widespread, eMarketer found that 36.68 million millennials (41.1% of those born between 1981 and 2000) will browse the Internet on a device that has an ad blocker enabled.

Within that generation, 18-24-year-olds are the heaviest users of ad blockers; 49.9% of them will use one (or 51% of Internet users within that age group). In the early days of ad blocking, penetration rates among 18-24-year-olds and 25-34-year-olds were similar. However, the gap is widening as the younger group adopts them in greater numbers.

“Millennials are more likely to have an ad blocker enabled than those in any other demographic group,” said eMarketer forecasting analyst Shelleen Shum. “Those in this group are more tech savvy than older adults, more willing to adopt new technology and tend to spend more time on the internet browsing and watching videos.”

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Who Says Journalism is Dead? – by Mark Effron

Journalism models are changing rapidly. But don’t make the mistake of thinking the craft is dying, says media veteran Mark Effron. At J-schools, students demonstrate the “desire to find out what’s really going on,” and the fact they are anxious “to communicate that through vivid language and strong images, gives me hope for their future, and the future of journalism.”

Forget the angst over “fake news” and the threats to journalism. We are living in a new golden age, thanks to the travails and missteps of the Trump administration and the outsized personality of the man in the middle.

During the era of the Pentagon Papers and Watergate, led by The New York Times and The Washington Post, (along with a few others and the networks news organizations) there was a thrilling sense of one-upmanship, as each of the top news organizations competed to come up with new revelations, scoops, insights. Woodward and Bernstein were the role models for us young journalists. I remember Katharine Graham addressing my graduating class at The Columbia University School of Journalism and thinking: someday I will work for that company.

The Post was talking truth to power, was unbowed, and the journalists making the difference were just a little older than I. (I ended up spending over a quarter century at that company, overseeing the news for the Washington Post Co.’s station division.)

And here we are again.

Yes, the journalistic models have been smashed by the end of the print model and the rise of digital, with its uncertain revenue stream. Yes, there are fewer journalists producing less journalism in a bigger digital space that makes it possible for falsehoods to roar like waves over truths.

But still.

I marvel at how after an election period where holy data overcame common sense in some cases, journalism is enjoying a golden moment.The sheer amount of stories broken by The New York Times, The Washington Post, Politico, CNN and so many others is breathtaking. And, unlike in the Watergate era, the stories don’t appear at genteel intervals, like once a day for newspapers, and at 6:30 p.m. for the networks.


Is It Time To Blow Up TV News Workflow And Start Over?
With TV newsrooms required to produce compelling content for a variety of digital platforms, the linear, on-air newscast has been dethroned as the king of television news. The problem is that newsroom workflow — and the supporting technology — needs to be completely re-invented. Read more here.
No, great journalism breaks out at all times on all platforms. Check your phone at 10 p.m. and thinking you are done for the day doesn’t work if you really care about keeping up. You can feel the urgency as our major journalistic institutions try to outdo themselves and each other.

I teach journalism and television and digital media at Montclair State University. Some of my students tell me that their parents are trying to wave them away from journalism. It’s dying, they tell my students. Nobody reads newspapers. Who watches the evening news? You know the lament.

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Facebook Gives Advertisers Guarantees for Ads With Sound

Facebook advertisers will be able to buy ads with an option to only pay when videos play with the sound on. Facebook videos typically show up in people’s feeds on mute and automatically start playing. Under new criteria — if the advertiser chooses — the views only count when the volume is on.

Advertisers have been concerned by Facebook users’ tendency to view their ads with sound off, and the company has been trying to come up with new formats that get people to choose to unmute.

The industry also has been creatively rethinking how they edit videos for a sound-off experience. However, Facebook is feeling the pressure of Snapchat, where videos are mostly viewed with sound and ads have the volume on 70% of the time, according to the company.

Facebook will offer the option to buy sound-on videos along with other standards as part of a broader effort to appease the ad industry.
Last month, Procter & Gamble’s CEO Marc Pritchard said the multibillion-dollar advertiser will no longer give the digital industry a pass on a “crappy media supply chain.”

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By 2021, more people will have a mobile device than running water.

By 2021, video will make up 78 percent of all global mobile data traffic, finds Cisco in its just-released Mobile Visual Networking Index for 2017. That compares to 60 percent of mobile traffic in 2016. Live video will grow at an even faster rate: In 2016 live video used 0.1 Exabytes of mobile data per month; that will grow to 2.0 Exabytes per month in 2021.

In 2021, the world will have 5.5 billion mobile device users (compared to 4.9 billion in 2016), and mobile speeds of 20.4 Mbps (compared to 6.8 Mbps). In 2021, there will be 1.5 mobile devices in use for every person on earth. More people will have a mobile device than will have running water (5.3 billion).

Breaking down the video numbers, Cisco finds video will make up 77 percent of mobile data traffic in North America by 2021. The percents are slightly higher in Western Europe (80 percent) and Latin America (79 percent).

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Trump & Tech: Round 1

Never one to shy away from confrontation, President Donald Trump has caused outrage in the technology industry with his plans for a US travel ban on citizens from seven countries in the Middle East and Africa.

Trump insists the move will protect the US from terrorists, but nearly 130 technology companies have now signed a legal brief that opposes the ban, arguing it will harm US innovation and competitiveness.

President Donald Trump is already at loggerheads with some of the biggest technology players in the US. Those signatories include hardware makers, software developers and web specialists. Yet not a single one of the country’s major telcos has so far backed the legal brief or spoken out. Mobile operator Sprint Corp. (NYSE: S) and cable giant Comcast Corp. (Nasdaq: CMCSA, CMCSK) said they had no comments to make when asked by Light Reading for their reaction to the president’s move, while AT&T Inc. (NYSE: T), Verizon Communications Inc. (NYSE: VZ) and T-Mobile US Inc. have yet to respond to our queries.

Light Reading has been tracking the ongoing developments and asking why telcos appear to be at odds with so many other technology players. We are continuing to reach out to service providers and other players active in the telecom sector, and will be publishing further updates in the days ahead.

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Piracy could cost content owners $2.3TN

The global economic value of counterfeiting and video piracy could reach $2.3 trillion (€2.15tn) by 2022, new research has shown. The report from Frontier Economics – dubbed Economic Impacts of Counterfeiting and Piracy – also provides estimates on the wider social and economic impact on displaced economic activity, investment, public fiscal losses and criminal enforcement, and concludes that these costs could reach an additional estimated $1.9 trillion by 2022.

Taken together, the negative impacts of counterfeiting and piracy are projected to drain $4.2 trillion from the global economy and put 5.4 million legitimate jobs at risk by 2022.

The underpinnings of the pirate economy are myriad. Typically, consumer pay-TV choice comes down to content, value and convenience when selecting a service. Pirates exploit those three needs by offering services and devices that rival their legal counterparts, but, without the costs of legally acquiring the rights and content, pirates are able to take valuable market share in the process with lower prices.

So perhaps it’s no wonder that content security specialist Irdeto recently found that there are more than 2.7 million advertisements on e-commerce websites, including Amazon, eBay and Alibaba for illicit streaming devices, indicating that content theft by pirates has become a fully-fledged business and a formidable competitor to established pay-TV operators.

According to Irdeto, it’s a true cross-channel effort, with advertisements found on social networks, including Facebook, Twitter and other prominent social media platforms. Pirates are becoming more business savvy and expanding their product marketing of illicit streaming devices. Citing data from SimilarWeb, the Irdeto report shows that the growth in global traffic resulted in more than 16.5 million visits per month to the top 100 pirate IPTV supplier websites. The US and UK led all countries with more than 3.7 million and one million site visits per month, respectively.

The report also shows that a typical pirate supplier offers an average of 174 channels, with some pirate suppliers offering more than 1,000 channels. This content comes in at an average subscription cost of $194.40 per year or a staggeringly low $16.20 per month – much lower than the average US cable cost of $103.10 per month. In some cases, despite the illegal nature of the offering, these low costs and the compelling content provided sway consumers to choose a pirate device over legal cable, satellite or OTT services.

The good guys are cracking down: Europol in late November, for instance, went after a host of online piracy and counterfeit sites, taking more than 4,500 domain names offline. Law enforcement authorities from 27 countries, anti-counterfeiting associations and brand owner representatives participated in this huge action, which was co-ordinated and facilitated by Europol’s Intellectual Property Crime Coordinated Coalition (IPC³), the US National Intellectual Property Rights Coordination Center and Interpol.

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2017 set to be the year for OTT advertising

Hot on the heels of a holiday season in which retail sales grew 4% in the US year-on-year according to the National Retail Federation (NRF), new research from Brightcove lays out some valuable considerations for those looking to use social video as a way to pick up sales and make inroads with their target age groups.

The global survey – conducted with 5,500 consumers in the UK, France, Germany, US and Australia – showed that three-quarters (74%) of consumers connect watching a video on social media and their purchase decision-making process, demonstrating why brands are so enthusiastic about video on social platforms.

And, later Millennials are the most likely to connect watching a social video and their purchase decision-making process – 84% of those aged 26 to 34 said that social videos had an impact (versus an average of 74%).

In a related finding, this group showed the most trust in content from both brands and publishers, with 51% likely to trust content from a brand, and 53% from a publisher. This generation also recorded the highest level of interaction with brands on social media (89% versus the average of 81%).

The Brightcove report showed that 26 to 34-year-olds also are most likely (35%) to feel emotionally connected to a brand after watching a good brand video on social media – and that age range was also most likely to have made a purchase after watching a brand social video, with three-fifths (60%) having done so.

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Linear TV sees triple-digit increase in ad spend

There has been a 273% increase in spending on linear TV advertising campaigns and an 840% increase in the number of linear TV impressions available to be bought and sold programmatically in the last 12 months, according to Videology.

The advertising platform’s Q4 2016 US TV & Video At-A-Glance report, view-through rate was the highest chosen objective for campaign goals (42%), followed by viewable rate (31%) and click-through rate (24%). Among advertisers that chose viewability as an objective, the MRC standard remained the most frequently used (90%), followed by custom, more stringent, standards (10%).

The report also found that, in the second half of 2016, more than a quarter of advanced TV campaigns used their own first-party data for targeting. These data segments could include past purchase history, website visits, registration data or loyalty data, and offer brands a way to utilize their direct relationship with customers for more relevant advertising.

“Brands and agencies have a huge amount of owned data, created through their direct relationship with consumers,” said Scott Ferber, founder and CEO, Videology. “By layering this first-party customer data into TV campaigns, brands deliver a far more tailored and granular advertising experience, ultimately resulting in greater ROI on their ad spend. This should be, and is becoming, a priority for anyone with access to owned data. I expect we will see this trend grow exponentially in the coming years.”

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