How HBO gets into 50 percent of US homes

According to HBO CEO Richard Plepler, the company has an opportunity to reach 50% penetration of homes in the US. Reaching that goal requires a lot more growth because HBO is in around a third of homes today.

HBO grew subscribers an impressive 5 million in 2017. Moreover, Mr. Plepler says the 35% of the company’s growth has come in the last five years. Performance such as this is likely the reason Mr. Plepler believes he can ultimately drive the service into half of US homes:

“We think there’s a lot of growth left. We’re going to attack it.”

However, where is all that growth coming from today, and where is it likely to come from in the future?

HBO Now growing strongly

HBO launched its direct-to-consumer online service HBO Now in April 2015, after several years of relatively little subscriber growth for the premium channel. It took the company almost two years to reach 2 million subscribers. However, 2017 was a watershed year for the service. The company saw subscribers climb from 2 million in February to 5 million by the end of the year.

The increase of 3 million subscribers in HBO Now helped propel the channel to its best year of subscriber growth ever, increasing by 5 million. So, where did the other 2 million subscribers come from, and how will it get to 50% penetration?

Traditional pay TV unlikely to help

If HBO saw any subscriber growth from traditional pay TV operators at all last year, it was minimal. Cable, satellite, and telcoTV operators are shedding subscribers at a steady clip. They lost around 3.5 million in 2017. However, their customers are also dropping premium tiers like HBO to save money. Mr. Plepler says that his best pay TV operator partners have HBO in 50% of customer homes. However, deepening penetration of a shrinking market may not result any growth at all.

vMVPDs an important part of HBO’s growth

Virtual MVPDs like Sling TV and DirecTV Now allow customers to subscribe to HBO through their services. For example, a DirecTV Now customer can add HBO for just $5 a month. Sling TV and PlayStation charge the standard $15 a month.

In 2017, vMVPDs grew strongly. Sling TV finished the year with 2.2 million subscribers, up 40% from one year earlier. DirecTV Now ended the with 1.46 million subscribers, up from 200,000 one year earlier. Assuming the same penetration level of vMVPDs as regular pay TV, HBO could have more than a million subscribers coming from Sling TV and DirecTV Now. Penetration at DirecTV Now could be even higher, with HBO through DirecTV Now costing a third of HBO Now.

The number of HBO subscribers from vMVPDs is likely higher still. PlayStation Vue and Hulu Live both allow customers to subscribe to HBO. However, neither Sony nor Hulu have announced how many subscribers they have to their vMVPD services.

Around half of traditional pay TV cord-cutters sign up for a vMVPD. As cord-cutting accelerates, expect vMVPDs to continue strong growth for some time to come.

YouTube TV could deliver a big bump in subs

There is one major vMVPD that currently doesn’t have a reseller arrangement with HBO: YouTube TV.

Google does not report how many subscribers it has for YouTube TV. However, in the Q4 2017 Video Trends report from TiVo 8.5% of survey participants said they were using the service. 3.8% said they used DirecTV Now and 2.3% used Sling TV.

read more here: nscreenmedia.com

As Sports Rights Soar, Maximize Content Across Platforms.

Like many other media companies involved in sports, local radio stations face a difficult game plan: Sports rights fees continue to soar, but consumers have more ways than ever to access sports news and entertainment. That leaves radio broadcasters, as well as their TV and digital counterparts, looking for ways to attract audiences to their game coverage and related content, and to generate ad dollars to support pricey sports programming.

To be successful, traditional media companies “must remain diligent to the threat posed by the tech giants and drive scale, innovation and the most relevant content to acquire and retain customers,” advises a new Nielsen report on commercial trends in sports.

In many markets, radio stations air local play-by-play rights to pro teams and top college sports and that marquee content attracts loyal listeners and top-dollar from advertisers. Such content can be a key differentiator for radio stations, as well as a valuable promotional platform for their other programming. To maintain that value in the face of growing competition online, on OTT services like Hulu and YouTube, and TV networks, radio networks can look to Nielsen’s new findings on the evolving sports market.

In one suggestion, Nielsen says sports rights holders should maximize their content across all possible platforms, including the obvious on-air and online extensions, but also smart speakers, augmented reality, virtual reality and subscription content.

In addition, Nielsen says, as brands increasingly look for layered, multi-platform sponsorships, sports rights holders can offer advertiser more access to teams and their hosts, as well as their expertise. Rights holders should also extend their sponsorship activities to other platforms, Nielsen advises, including “digital content and activation capabilities, in order to engage fans, collect data and service sponsors.”

Media companies should also look for underdeveloped programming opportunities, such as showcasing women’s sports, which are receiving more attention from fans and brands, Nielsen notes. Radio stations, for instance, could run women’s sports on-air or on streaming platforms, or even exclusively via digital streaming. “The sector is booming as the growth opportunity represented by under engaged females is recognized, as brands demand a focus on women’s sports and as gender equality takes ever-greater prominence,” the report says.

Consumers Are Now More Likely to View Ads Online Than on TV

GroupM unveiled its 2018 “State of the Digital” report, which predicts where people worldwide are expected to consume content in the coming year. And for the first time, the WPP network sees online surpassing every other vertical—linear TV, print and radio—in terms of where people will choose to spend their time with media.

The study, when weighted by expenditure, estimates that consumers will spend an average of 9.73 hours per day with personal media in 2018, up from 9.68 hours in 2017. GroupM predicts online to take a 38 percent share of total time spent with media; for the first time, linear TV trails behind and is expected to end the year with a 37 percent share. The group predicts radio and print to then take 18 percent and 7 percent shares, respectively.

Last year, linear TV held a 38 percent share over online’s 36 percent.

GroupM noted in the report that it wasn’t able to accurately measure TV’s online distribution, so those numbers were “lost in that online aggregate.”

The report likened the rise of digital ad expenditures to that of global e-commerce spend, which it also sees jumping considerably in 2018. Based off the 35 countries that supplied e-commerce totals for this study, GroupM predicts the dollars spent online to climb 15 percent to $2.4 billion in 2018 from $2.1 billion last year.

This is also the first time GroupM predicts e-commerce shopping to “grow notably faster” than Internet usership, which is estimated to climb 4 percent in 2018, compared to 6 percent in 2017.

Across the 35 reporting countries, the network estimates 47 percent of all online display investment to be transacted programmatically in 2018, from 44 percent in 2017 and just 31 percent in 2016.

GroupM’s research also touched on which of the hot-button issues around emerging tech are really top of mind for marketers, according to employees surveyed within its WPP network. For example, respondents described blockchain as a “slow, clunky and expensive” tool they don’t see as practical just yet.

“Blockchain’s main attraction is its distributed ledger, which tells everyone everything and thus presents the opportunity to reduce inefficiency or cheating,” Adam Smith, GroupM Futures director, said in a statement. “However, its Achilles’ heel is the need to keep every participating computer updated with everything all the time, and that’s too slow for a real-time world.”

The study’s respondents within GroupM reported improved development around AI and data use, although they admitted the need for further improvement on the latter. Those respondents brushed off the threat of clients in-housing their work, saying that it’s “more often talked about than done.” GroupM employees surveyed “reported [more] hybrid arrangements” than full in-house operations, “with clients often happy to take on strategy but leave risky and expensive execution to agencies.”

Clients are hiring more digital staff in-house and leaning more on specialist agencies than generalists, according to the study.

In a statement, GroupM global CEO Kelly Clark listed automation and talent as the “big themes in advertising’s current revolution.”

“One of the downsides of specialization is the increase in specialists who know more and more about less and less,” Clark said in the statement. “We have to use automation to liberate brand power so talented people can look across the entire media ecosystem to help clients optimize short-term results and create long-term value.”

read more here: adweek.com

How to Make a Mobile Ad That Consumers Won’t Hate

Mobile ads may be small in size, but done the right way they can be impactful. The key is for marketers to avoid making them obtrusive and obnoxious. And according to research from IPG Media Lab and Magna Global, there are certain mobile ad formats that tend to be more favorable than others.

While slightly fewer respondents were able to recall brands from six-second ads (41 percent) versus 15-second ads (50 percent), they viewed the brands that used shorter ads as more relevant, innovative and modern—especially when brands used a vertical format more fit for a smartphone than the standard horizontal layout.

“The results of this research prove that mobile demands its own customized ad formats, rather than simply repurposed versions of existing assets that were developed and optimized for other platforms,” said Kara Manatt, svp, intelligence solutions and strategy at Magna Global. “For example, six-second ads and vertical video were developed from the ground up for the mobile experience, and they have been extremely successful for advertisers.”

read more here: adweek.com

Google’s Ambitious Ai-Backed Plans for Podcasts

Google has built a strong foothold in web search and video streaming, but it’s now looking to make audio its new forte with a reimagined podcast and audio search functionality.

Like Google co-founder Sergey Brin mentioned this week, Google is using its full AI and machine learning capability to transform a number of services. And it’s doing the same with podcasts, and how we listen to them.

Google Podcasts is now a standalone division at Google, being led by Product Manager Zack Reneau-Wedeen. He recently sat down with Pacific Content in a five-part interview series, which we have linked throughout our summary here. Here’s everything you need to know:

Making Audio A ‘First Class’ Citizen

There’s a podcasts category in Play Music, but Google sees podcasts as a dedicated product and has decided to give it a prominent placement in search results. The search giant wants to make audio a ‘first-class‘ citizen that should be placed next to text, images, and video in search results. This could be a game-changer.

Google wants to people to be able to play podcasts, right from the search results, removing the need for a dedicated app. If Google thinks a podcast is able to answer a search query then it’ll show that to users and try to get new listeners.

This means one could expect to see podcasts that have talked about your search topic, be it sports, music, movie or celebrities such as Kim Kardashian or Sachin Tendulkar over the next few weeks and months. This requires podcast metadata and Google has the power to decode and handle it all. Speaking of the same, Reneau-Wedeen says:

“In the longer term, integrating with Search means figuring out what each podcast is about and understanding the content of that podcast. This is something Google has done extremely well for text articles, as well as for images and even more structured data such as maps. We can help with audio, too.”

Podcasts in Search Results
Google has started acting on its plan and introduced a new native podcast section in its Google app on Android. It allows you to search for podcasts, showing them inline with all your results or directly queue them via Google Assistant using simple commands, such as “Hey Google, play the Vergecast podcast.”

The podcast section appears like a full-fledged app on its own, complete with your subscriptions and custom recommendations. The podcast player is baked right into the Google app and features your usual playback controls, along with seeking and speed control features.

Reneau-Wedeen said podcasts are more often consumed by iOS users and his team wanted to design a podcast experience that can work best on Android. At the same time, Google wants focus on device interoperability and wants to build an intuitive experience that’s consistent across all the Google products, be it Android or Google Home or any other Google Assistant product, and even on iOS. Reneau-Wedeen further added,

“Our team’s mission is to help double the amount of podcast listening in the world over the next couple years.”

Audio SEO & Monetisation

With audio getting prominent placement in search results, Google will tweak its algorithms to help listeners discover new podcasts while also defining guidelines that’ll help you rank your content higher in search. This is possibly going to be called Audio SEO.

Google already enables you to tinker with the settings to make your podcast appear in search results but there’s no audio SEO in place right now. This phase of the product is going to important when podcasts are finally able to give you an answer to your query, similar to the recently launched celebrity video answers in search.

read more here: beebom.com

Cambridge Analytica Has Declared Bankruptcy

The British firm at the center of Facebook’s recent data privacy controversy is shutting down.

Today, Cambridge Analytica—which was hired by both Donald Trump and Ted Cruz’s campaigns during the 2016 presidential race—announced it will file for bankruptcy in bankruptcy court in the U.S. Southern District of New York. Meanwhile, its parent company, SCL Elections, will file for insolvency in the United Kingdom while ceasing all operations in both countries.

Over the past two months, Facebook has accused the company of wrongfully using user data, which sparked an independent investigation in the UK. The revelations also led to CEO Mark Zuckerberg appearing before Congress to discuss Facebook’s data practices, along with chief technology officer Mike Schroepfer doing the same in British Parliament.

“Over the past several months, Cambridge Analytica has been the subject of numerous unfounded accusations and, despite the company’s efforts to correct the record, has been vilified for activities that are not only legal, but also widely accepted as a standard component of online advertising in both the political and commercial arenas,” the company said today in a statement.

Two years ago, Cambridge Analytica had opened an office in New York to expand beyond political advertising and into the commercial sector. The closure was first reported today by The Wall Street Journal, which cited the company’s “mounting legal fees” and a loss of clients.

Europe will regulate video sharing platforms like Youtube

The European Parliament, Council and Commission announced last week that they reached an agreement on the main elements of revised rules to apply to audiovisual media across Europe. The new rules will cover not only the traditional TV broadcasters but also the Video on Demand (VOD) providers, like Netflix, and Video sharing platforms, like Youtube.

The extension to VOD and Video Sharing platforms is limited. These platforms will have to protect minors from harmful content (which may impair the physical, mental or moral development), access to which would have to be restricted; and protect all citizens from incitement to hatred.

The European Commission says “that audiovisual media is increasingly target markets across national borders. At the end of 2013, more than 5,000 TV channels (not counting local channels and windows) were established in the EU. Of these, almost 2,000 targeted foreign markets (either EU or extra-EU). This share had increased from 28% in 2009 to 38% in 2013. As far as video-on-demand services are concerned, 31% of the video-on-demand services available in a Member State are established in another EU country. This underpins the continued added value of the EU action in this area.”

The directive on revision is called AVMSD – Audiovisual Media Services Directive – and it is in public debate / consultation since 2015.

One of the main news on the advertising is that TV broadcasters will not have anymore a limit of 12 minutes per hour of advertising. Instead, TV broadcasters will remain only with the 20% limit of broadcasting time, between 6:00 to 18:00.

Here the announced updates of the revised AVMSD:

– Strengthened Country of Origin Principle with more clarity on which Member State’s rules apply in each case, and the same procedures for both TV broadcasters and on-demand service providers as well as possibilities for derogations in the event of public security concerns and serious risks to public health.

– Better protection of minors against harmful content whether on TV or video-on-demand services. The new rules envisage that video-sharing platforms put appropriate measures in place to protect minors.

– European audiovisual rules extended to video-sharing platforms. The revised Directive will also apply to user-generated videos shared on platforms, e.g. Facebook, when providing audiovisual content is an essential functionality of the service.

– Stronger rules against hate speech and public provocation to commit terrorist offences thatprohibit incitement to violence or hatred and provocation to commit terrorist offences in audiovisual media services.

– The rules will also apply to video-sharing platforms to protect people from incitement to violence or hatred and content constituting criminal offences.

read more here: ppc.land

Majority of Digital Ad Budgets Earmarked for Video

Almost 60% of the digital ad budgets of marketers are allocated to video, and more than half of buyers plan to increase digital and mobile video spending over the next year, according to a new study from the Interactive Ad Bureau.

Per the “Digital Content New Fronts: 2018 Video Ad Spend Study”, advertisers are poised to raise spending on digital video and mobile by 53% compared to two years ago, to an average of more than $10 million annually.

Of that spend, there’s a growing emphasis on original digital video programming, with the vast majority (more than 8 in 10) agreeing that the category is an essential part of their media buy. The biggest drivers there are quality of programming (45%), attractive costs/CPMs (40%), and effective audience reach and quality of environment (38% each).

About half of buyers plan to spend more on social video advertising in the next 12 months.

The study’s findings are based on an online survey of 353 marketer and agency execs conducted from March 6-16. To qualify, those execs had to be involved in digital video ad decision-making at a company responsible for $1 million-plus total ad spend in 2017.

“Marketers’ commitment to digital video—especially original digital video—has been skyrocketing over the past few years,” Anna Bager, executive vice president, industry initiatives, IAB, said in a statement. “These findings reflect consumers’ enthusiasm for the dynamic storytelling which original video programming delivers in spades, and the power of the medium to deliver strong ROI. There is no question that we will see buyers out in full force throughout this week’s NewFronts presentations, as they look to invest more and more of their budgets in the latest original digital video programming opportunities.”

read more here: multichannel.com

YouTube Ads Aim at Cord Cutters

YouTube wants to siphon off more advertising dollars out of the traditional TV ecosystem.

Google’s video platform is promising Madison Avenue new ways to reach people watching YouTube on TV screens — as well as target YouTube ads to cord-cutters and consumers who don’t watch a lot of traditional TV.

YouTube says connected TVs represent its fastest-growing device category, thanks in part to the growth of YouTube TV, its over-the-top “skinny bundle” pay-TV service launched last year.

While overall mobile accounts for over half of all YouTube videos viewed, users now watch more than 150 million hours daily of YouTube on television screens worldwide. That’s up 50% from 100 million hours per day in the past six months. (One year ago, total viewing on YouTube was around 1 billion hours per day; Google declined to provide an updated figure.)

“We are seeing more YouTube being watched on TV screens, and more TV content being watched on YouTube — it’s the ultimate convergence of video,” said Debbie Weinstein, managing director, YouTube/video global solutions at Google. “Advertisers are saying, ‘What are you building for me to reach YouTube viewers on TV?’”

Here are the three ad programs YouTube is rolling out:

“Light TV viewers” targeting:

In the next few months, YouTube will introduce a new audience segment in AdWords called “light TV viewers.” These are consumers who, based on Google and YouTube’s metrics, watch most of their TV and video content online — and are much less likely to subscribe to pay TV.

YouTube on TV screens:

For the first time, advertisers will be able to reach audiences specifically on television screens through AdWords and DoubleClick Bid Manager. That option will join the existing ability to target YouTube viewers on smartphones, tablets, and desktops.

YouTube TV ad inventory will be available through Google Preferred: So far, Google hasn’t sold ads for its OTT “virtual pay-TV” service. Starting in the fourth quarter of 2018, inventory on some U.S. cable networks on YouTube TV will be available as an extension to Google Preferred, the premium ad program for the top 5% most popular YouTube channels.

The “light TV viewers” targeting — which will span ads across all device platforms — is particularly interesting to advertisers who are trying to reach audiences that have become very hard to find on conventional TV, Weinstein said. More than 50% of U.S. consumers aged 18-49 in U.S. are “light” TV viewers (in the bottom one-third of the total TV audience based on minutes viewed), according to Nielsen. However, 90% of that group watches YouTube videos, according to Weinstein.

Meanwhile, Google is looking to dial up the ad monetization on YouTube TV. First launched in April 2017, YouTube TV is now available in 99 of 100 top U.S. designated market areas, reaching some 85% of the nation’s TV households. As you’d expect, most viewing of YouTube TV is on TV, with television screens accounting for more than 70% of the total watch-time.

Starting later this year, YouTube TV ad inventory will be added to Google Preferred. Weinstein noted that YouTube TV ads bought through Google Preferred will be dynamically inserted, letting advertisers target ads based on demographic profiles rather than just showing everyone the same ad as with the majority of traditional TV buys.

This January, YouTube said all videos in Google Preferred will be reviewed by human moderators before they’re eligible for monetization. That came after a series of “brand safety” blowups in the past year, when advertisers discovered spots unexpectedly running against hate speech and other content they didn’t want to be associated with.

read more here: variety.com