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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The Grand Tour hits UK SVOD pole position

Having gone all in on taking Jeremy Clarkson, Richard Hammond and James May to its online video channel, Amazon is celebrating success with The Grand Tour among UK subscription video-on-demand (SVOD) viewers.

According to SVOD content tracking and analysis research from GfK, The Grand Tour was the most viewed title in both November and December 2016, attracting the biggest audience reach for an Amazon show in the UK since GfK’s tracking service began in 2015. It also became the most streamed show on Amazon in November 2016, accounting 8% of all the online video streams watched. The following month, that increased to 17% of all streams viewed, nearly double that of the second placed title, The Man in the High Castle.

Attempting to explain the reasons for the spike, GfK noted that one key reason behind Amazon’s investment in The Grand Tour was not just to attract publicity and views, but to encourage sign-up amongst a different target audience from existing subscribers. GfK believes that The Grand Tour has been successful in this aim. It found that in November and December 2016, the top reason for sign-up was ‘to watch original series made by the provider’, claimed by 22% of Amazon users. This was the highest percentage ascribed to this reason since June 2016, when the launch of BrainDead and Mr Robot 2 also sparked interest.

The analyst added that the value of Amazon investing in an exclusive deal with The Grand Tour cast was also proven by the second most popular reason given for sign up in December: ‘to watch exclusive content not available elsewhere’.

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YouTube rolls out live streaming

Having first launched in June 2016 with a select group of creators, YouTube is extending mobile live streaming to every creator with over 10,000 followers, and soon, to all users.

Google’s online video division has also launched Super Chat, a monetisation feature for live streams enabling viewers to purchase highlighted messages within the chat feed and have them pinned for up to five hours to the top of the chat window. Super Chat is initially available to creators in more than 20 countries and viewers in more than 40 countries.

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TV set viewership is still king of the home

Driven by millennials and older adults, TV set viewing in the US rose by 4.6 million people over the last year, according to the Video Advertising Bureau.

The survey found that TV reaches 287 million people monthly, significantly more than any other video platform. In fact, television still commands 88% of total video time among persons over 18. Even the elusive young adults aged 18-24 spend three-quarters of their total video time in front of the television.

And, regardless of ethnicity, TV is the primary video source, with blacks using it for 87% of their video time; Hispanics watching 81% of the time and Asians viewing 72% of the time.

Also, despite the rise of on-demand video, watching TV live as it airs represents eight out of ten minutes viewed. This is true across the age spectrum, with millennials watching live more than 80% of the time. The VAB found that in general, time spent with DVR time-shifted TV is down from year ago, and is down a big 18% among adults aged 18-24.

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US OTT Churn Rate at 19%.

The churn rate for OTT video services is 19 percent of U.S. broadband households, according to Parks Associates, meaning that roughly one in five households has canceled a streaming service in the last 12 months.

The OTT Video Market Tracker service finds the overall churn rate for OTT services has been stable for the past year. At the end of 2015, 20 percent of U.S. broadband households had canceled at least one OTT video service in the past 12 months. Churn is found to be lowest among the top three most established services: Netflix, Amazon and Hulu.

Households with OTT video subscriptions increased their spending from an average of $3.71 per month in 2012 to $7.95 in 2016. Spending on physical media purchases and rentals declined from an average of $15 per month to $8 per month, while spending on digital transactional video declined from an average of $2.42 per month to $1.42 per month.

“The churn rate has held steady, with one-in-five broadband households canceling an OTT video service in the past year,” said Brett Sappington, the senior director of research at Parks Associates. “These are not free trials but instances where consumers are spending real money to try out new OTT services. One-third of households that currently subscribe to an OTT video service have canceled one or more services in the past year, which shows that there is quite a bit of experimentation occurring right now.”

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video: Digital Buy Side Wants Audience Quality

Has the pendulum begun to swing from advertising and media’s preoccupation with digital viewability to audience quality? It’s a trend that comScore executive Aaron Fetters is seeing on the buy side—along with a keen desire to clean up “a mess” of an ecosystem.

“We finally seem to be going a little bit beyond just the discussion of viewability and fraud and getting back to how does that combine with audience,” Fetters says in an interview with Beet.TV at the IAB Annual Leadership Meeting. “I’m hearing the buy side really begin start to ask again am I getting the audience I thought I was buying.”

Now SVP, National Agencies & CPG Business at comScore, less than two years ago Fetters was on the buy side, as Director of Global Insights at the Kellogg Company. He thinks it’s a positive sign that the industry seems to be moving beyond a sole concentration on viewability, fraud and eliminating waste.

“It think we’ve probably made a lot of progress in beginning to eliminate a lot of the waste in the ecosystem, but now I’m seeing the attention turn back to it’s not enough to just know that I’m getting a quality impression,” Fetters says. “I want to know who’s seeing that impression.”

Addressing the digital ad ecosystem, Fetters expects the consolidation among ad tech providers to continue. “Clearly we’re seeing it week after week, month after month,” he says.

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Sky-Discovery carriage dispute a sign of things to come

The eleventh-hour settlement of the high-profile carriage dispute between Sky and Discovery is not likely to be the end of the discussion as to what those channels are really worth.

The deal means that Sky subscribers will continue to enjoy Discovery’s bouquet of 12 thematic genre channels, yet it must be noted that according to Futuresource Consulting analysis, comparing data for the last seven months of 2016 with the same period for 2014 shows that Discovery’s ratings (excluding Eurosport) have declined, while Sky’s share of eyeballs has remained the same. That backs up Sky’s original beef with the programmer.

“The disagreement was simple – Sky said Discovery’s viewing on its platforms had fallen and it did not want to pay what was being asked to renew their long-term carriage agreement,” said Futuresource analyst John Bird. “Discovery said it was being paid less than it was 10 years ago, despite Sky subscription price rises and a claimed 20% increase in viewing of its channels on Sky platforms (the acquisition of Sky Germany and Italy in this period may well be a factor behind this assertion).”

But Bird added that the falling viewership was “almost certainly” due in a large part to the cannibalisation impact of on-demand viewing on traditional linear multichannel TV.

According to the latest survey in the Futuresource international consumer research program Living With Digital, 12% of UK respondents now say that SVOD services are their most frequently viewed video platform, up from 6% a year earlier, compared with 15% for pay-TV channels.

In terms of real numbers, there are now approaching 6 million Netflix and 4 million Amazon Prime Video users in the UK (many taking both).

“As total TV viewing hours are relatively flat, it is inevitable that viewing of these services (as well as other alternative platforms like YouTube) will be taking share from traditional linear TV channels,” Bird explained.

To ward off the impact from defecting viewers, Sky has made more content available on-demand and digitally, with an array of options that include Sky Q, Sky+, Boxed Sets, Sky Store, Sky Go and Sky Now, the latter of which will carry Sky’s full content portfolio online from 2018. Also, Futuresource said that viewing of Sky Atlantic (which carries HBO content) is 75% on-demand.

In the future, Discovery may need to negotiate carriage compensation that takes into account digital statistics within Sky’s various ancillary platforms.

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60% of Dutch viewers will consider cord-cutting

60% of Dutch viewers will consider cutting the cord if the three main public NPO channels are available OTT, according to research from Telecompaper.

57% of people will consider such as move if the RTL channels are available OTT, and slightly less if SBS offers its channels over the top.

The research is good news for NLZiet, the Dutch on-demand platform with programmes from all three major broadcasting groups (NPO, RTL and SBS). Last November, the platform said it will introduce live OTT streams of the main channels.

Dutch viewers can also access live OTT streaming on the KPN Play platform and Knippr from T-Mobile.

Other research by Telecompaper shows that two-thirds (66%) of Dutch households now have TVs with internet access. This increases the likelihood of cord=cutting.

The figure rises to 73% for homes with children, while 62% of households without kids have a connected TV. The penetration of smart TVs has risen substantially in recent years, from just 30%, the annual surveys by Telecompaper’s Consumer Panel found. Growth slowed somewhat in the past year, to 5% from 12% in 2015.

Nevertheless, not all are using their smart TV to watch internet content. In Q4 2016, 36% of households said they watched internet content on the TV, up from 30% a year earlier. Around 14% connect a laptop to the TV to watch online content, up slightly from 12% in Q4 2015.

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