Havas Group Reports Revenue Decline

Havas Group reported first-half financial results today and indicated that the performance was “below our expectations,” as Havas Group CEO Yannick Bollore put it.

The firm posted an organic revenue decline of nearly 1% in the second quarter and 0.4% for the first half of the year. That was below the holding company’s previous forecast of 2% to 3% first-half organic growth.

“Although the Group’s momentum is positive, Havas’ financial performance in the first half of 2017 suffered a slowdown which affected the industry as whole and led to revenue and profitability below our expectations,” Bollore stated.

Havas is the second holding company this week to disclose disappointing results — along with WPP, which posted its first-half results Wednesday, sending its shares down about 12%. Havas traded a fraction of a percentage point higher Friday on the Paris exchange. It released results after the close of the market.

Like WPP, Havas said the weak results were partly due to less spending by clients. Havas also cited “pressure” on fees from clients and economy-related woes in some markets like Brazil, Mexico, India and China.

In North America, first-half performance was “down slightly,” although the U.S. ended up in positive territory despite clients like IBM cutting back on ad spend. WPP noted Wednesday that package goods clients in particular — many of which saw organic declines themselves in the first half” — notably cut back on spending.

Bollore indicated that the Group is hoping for slight improvement in the second half of the year, but that “we are unable to confirm” the company’s earlier full-year organic growth forecast of between 2% and 3%. At this point, Havas has not issued revised guidance.

Havas’ reported first-half revenue was up 1.9% to a little more than 1.1 billion euros (about $1.3 billion at today’s exchange rate). Operating income was down 27% to 100 million euros ($119 million).

read more here:

https://www.mediapost.com/publications/article/306303/havas-group-reports-organic-revenue-decline-for-th.html

The OTT Takeover

A few months back, the Streaming Media and Unisphere Research teams released a report on the current state of over-the-top (OTT) video. The report, “OTT Video Services—Innovation, Opportunity, Maturation & Technology Trends in OTT Delivery,” generated significant press around the idea that OTT viewing would exceed traditional broadcast TV viewing within the next five years.

While that projection was certainly interesting, what may have been missed in all the coverage of the report, which was sponsored by Level 3 Communications, is the fact that OTT viewing has moved from an also-ran position to one that arguably offers higher quality and more consistent delivery than traditional over-the-air (OTA) broadcast or even cable distribution.

This week, we’re presenting an updated version of the same report, as well as an accompanying infographic (see below or open in a separate window here) that illustrates a few of the key points about OTT’s hearts-and-minds campaign to displace tradition OTA and cable delivery.

The infographic highlights a few key differentiators between the nimbleness of OTT delivery options. One such point centers on the delivery of high-dynamic range (HDR) content: More than two-thirds of the respondents that offer OTT services signaled an intent to deliver in either deeper color depth (HDR) or higher frame rates (HFR).

While traditional broadcast is also moving towards 10-bit color depths, allowing for deeper blacks and brighter whites, the cost of implementing OTA broadcast gear is daunting—although, perhaps, not as daunting as the challenge of doing the same thing in cable distribution, since 10-bit delivery would require an update to infrastructure and cable set-top boxes

A few pieces of the HDR puzzle are falling into place, thanks to impending mass adoption of HEVC through operating systems—Apple’s macOS 10.13, also known as High Sierra, will support HEVC in its fall 2017 release—and upgraded internet streaming boxes such as the Chromecast Ultra.

A recent firmware update for a prototype Apple product, inadvertently released by the company on a public server, shows that an upcoming Apple TV product will support both 4K and HDR.

What’s interesting about the HDR options, as pointed out by iOS developer Gulherme Rambo in tweets about the new firmware’s references to the upcoming Apple TV device, is that multiple standards have emerged for HDR. The industry standard is HDR10 (for 10-bit delivery), but Dolby has also released Dolby Vision. In addition, it appears the upcoming device will also support Hybrid Log-Gamma, a royalty-free HDR standard developed jointly by the BBC and NHK as part of the advanced television standard (ATSC 3.0). (For a look at the competing HDR formats, see “The State of 4K and HDR 2017.”)

The fact that a relatively inexpensive internet streaming box can add in not just one but three HDR options should drive the point home clearly: OTT delivery is now the place to innovate, rather than relying on OTA innovation as had been done in years past.

Another trend the infographic highlights is a move towards multi-region delivery of OTT. While responses in past years had tended to balance between an equal number of survey respondents offering single-country OTT delivery versus regional or global delivery, this year’s responses show a marked shift away from single-country OTT offerings.

read more here:

http://www.streamingmedia.com/Articles/Editorial/Featured-Articles/Infographic-The-OTT-Takeover-119777.aspx

Roku’s Share of Streaming Market Rising

As streaming becomes more popular as a way to consume TV programming, Roku is increasing the number of homes in which its devices are used, according to a new report from Parks Associates.
In the first quarter, Roku’s leading share of the streaming media player market in the U.S. grew to 37% from 30% a year ago.

The gain puts Roku further ahead of competitors including Amazon, Google and Apple.
“Roku emerged early as a U.S. market leader for streaming media players, and the company has held firmly to that position,” said Glenn Hower, senior analyst at Parks Associates. “Higher-priced devices, such as the Apple TV, have not been able to keep up with low-priced and readily available Roku devices, which can be found at Walmart for as low as $29.99.”

Amazon’s Fire TV increased it share to 24% from 16% in the quarter. Google’s Chromecast dropped to 18% and Apple TV fell to 15%, according to Parks.

“One-third of U.S. broadband households own a streaming media player,” Hower said. “The growth of the U.S. OTT market provided consumers with unprecedented ease of access to video content. These streaming media devices make for quick and easy access to the top OTT libraries.”

The Parks report, Reinventing CE: Transforming Devices to Service Platforms, looks at how the CE industry has migrated from producing and distributing hardware to distributing OTT content and leveraging advertising models.

CNN launches daily show on Snapchat

CNN this week kicked off a new daily second-day news program on Snapchat.

“The Update” will air weekdays at 6 p.m. ET and will feature news and updates from CNN staff reporters.

“Since launching content on Snapchat, we have believed in the importance of giving our community access to accurate and authoritative news coverage, and CNN has played an important part in that from the beginning,” said Sean Mills, senior director of content programming for Snapchat, in a statement.

“In today’s news environment, people are hungry for news and they want a quick update of where things are at within one tap of their phone. So, we’re serving that up, speaking their language and delivering it in beautiful, vertical, mobile friendly video,” said Samantha Barry, executive producer for social and emerging media at CNN, in a statement.

CNN’s daily news show comes after NBC already earlier this year launched its own daily news program on the platform.

“Stay Tuned,” which airs on NBC at 7 a.m. and 4 p.m. EST on weekdays and 1 p.m. EST on weekends, has already reportedly had success in attracting a large audience. The companies last week announced that the show has pulled in 29 million unique viewers since launching in July.

For NBC, the Snapchat show launch coincides with the company’s $500 million strategic investment in Snap.

NBCU CEO Steve Burke called the Snap investment part of the company’s strategy to invest in digital growth, which includes NBCU’s recent $400 million investment in BuzzFeed and $200 million investment in Vox.

read more here:
http://www.fiercecable.com/broadcasting/cnn-launches-daily-show-snapchat

Smart TV users watch 36% less than streaming box users

Most TVs shipped in the US are smart and increasing numbers of consumers are connecting them and using them to stream video. However, will they catch up to, and overhaul, the market leading streaming media players?

Smart TVs the norm when purchasing a new set

Smart TVs are now the default choice for consumers when purchasing a new set. 70% of all televisions shipped in North America in 2016 were smart. A third of total smart TV sales have gone to Samsung, with Vizio close behind with 30%. The rest of the market is divvied up between multiple manufacturers. LG secures the third spot with 10%, Sony is next with 7%.

Smart TV and streaming media player benefiting from OTT growth

Streaming media player (SMP) and enabled smart TV penetration has grown strongly over the last four years. In Q1 2014 just 10% of TV homes had a smart TV and 15% had a streaming media player. In Q1 2017, smart TVs have narrowed the gap on SMPs as penetration has grown to 29% and 31% respectively.

Both devices growth reflects how video streaming has moved into the mainstream. Between Q1 2014 and Q1 2017, Netflix U.S. streaming subscribers have grown from 36 million to 52 million. Moreover, services like Netflix put a strong emphasis on the television as the primary viewing platform. This trend seems likely to accelerate as consumers continue to move traditional television viewing to online platforms.

So, will smart TVs continue to catch up to, and overtake, SMPs as the preferred device for online streaming? Maybe not looking at usage data.

Smart TV usage is mixed

When it comes to usage smart TVs come with a natural advantage. When the TV is turned on many smart TVs start from the devices web portal. Moreover, many smart TVs make content and app suggestions in the opening screen. These advantages impact how often an owner uses that functionality. According to Nielsen, enabled smart TVs were used on 20.8 days between December 26th, 2016 and January 29th, 2017. Game consoles were used 15.3 days and SMPs 14.9 days.

When it comes to raw viewing hours the smart TV is well behind other devices. For example, game consoles are used for 4.4 hours per day, though that usage is likely dominated by gameplay rather than video viewing. On the other hand, SMPs are used for 3.6 hours per day with most of that usage dedicated to streaming. Enabled smart TVs are used for 2.3 hours, over an hour less than devices like Roku and Apple TV.

read more here:
http://www.nscreenmedia.com/smart-tv-watched-less-streaming-media-player/

How long will YouTube TV be priced at a loss?

YouTube TV reaches 50% of US population

YouTube TV announced it has launched in a further 14 markets, adding to the original five markets it previously supported. The new markets are Baltimore; Boston; Cincinnati and Columbus, Ohio; Jacksonville-Brunswick, Fla.; Las Vegas; Louisville; Memphis; Nashville; Pittsburgh; San Antonio; Seattle-Tacoma; Tampa-St. Petersburg-Sarasota; and West Palm Beach-Ft. Pierce, Fla.

The company says it will launch in further 17 markets in the coming weeks. With a total of 36 major metropolitan markets covered, its reach will increase 64% of the population.


New broadcaster affiliate agreements benefit YouTube TV

YouTube TV’s progress is remarkable considering the company promised it would not launch in any market that it could not deliver the top four local broadcast channels. Previously, negotiating the appropriate licenses was a Herculean task.

A licensor would have to go market-by-market negotiating with each independent affiliate separately. Also, it would have to negotiate with big affiliate groups such as Sinclair Broadcasting and Hearst Television. Then it would have to further negotiate with the big four networks to get their owned-and-operated station.

However, YouTube is the beneficiary of a new approach by the broadcasters. ABC, CBS, Fox, and NBC have reached an agreement with many of their affiliates to negotiate a deal on their behalf with licensors such as YouTube TV. Stations can opt-out of these agreements if they like, but looking at YouTube TV’s rapid progress, it appears most are choosing not to.

YouTube TV is certainly making a loss

YouTube TV channel bundle cost
The lowest cost of YouTube TV’s channel bundle
Being able to get the licensing done is one thing, but getting a good deal is quite another. The best license rate that YouTube TV could have expected to get from content providers is what traditional pay TV operators currently pay. Using estimates for those numbers, the 48 channels I receive from YouTube TV in San Francisco Bay Area would cost $34 a month.

However, YouTube is likely paying more than big operators like Comcast. Bob Iger, Disney’s CEO, mentioned that the license fees he sees from vMVPDs like YouTube TV are slightly higher than for regular operators. How much more is anyone’s guess, but even a 5% premium means YouTube is paying more in license fees than it is receiving in subscriptions.

YouTube TV can probably sustain these losses while subscriber numbers remain low. However, if the service takes off, things could get very ugly for the service.

About the estimates

Many of the channel license fees I obtained from SNL Kagan estimates for 2014. I corrected these numbers by applying a 35% increase. ESPN license fees increased from $6.04 in 2014 to $7.86 this year, a 30% increase. Comcast content license fees increased 35% between Q2 2014 and Q2 2016, while Dish’ increased 80%.

I also consulted the site whatyoupayforsports.com for current estimates of the license fees paid for major sports channels. I also used other SNL Kagan estimates for retransmission fees paid to owned-and-operated and affiliates of the major four broadcasters. These numbers gave an average cost for the four broadcasters ABC, CBS, Fox, and NBC.

read more here:

http://www.nscreenmedia.com/youtube-tv-making-loss/

Just how bad will cord-cutting get?

Could be pretty bad, judging by the most recent figures gleaned from the pay-TV industry. In its latest “Cord-Cutting Monitor” report released last week, MoffettNathanson LLC calculated that traditional US pay-TV providers lost a whopping 941,000 subscribers in the second quarter, by far their worst quarterly showing ever. That’s up from the industry’s previous record loss of 809,000 subs in the first quarter and 709,000 in the same period a year ago.

As a result, the US cable, satellite and telecom industries have now lost more than a combined 1.7 million traditional pay-TV customers in just the first half of this year. Plus, the annual rate of subscriber losses for the industry accelerated to 2.7% in the spring quarter, up from 2.5% in the first quarter. Meanwhile, the rival OTT skinny bundle providers, or virtual multichannel video programming distributors (vMVPDs), fared well, gaining an estimated 469,000 paying customers, or about 50% of the cord-cutters fleeing the legacy pay-TV bundles.

“Did things get worse in Q2?” asked Craig Moffett, principal analyst for MoffettNathanson, in his note to investors last week. “Yes, at least for the traditional distributors.”

With more OTT skinny bundle services hitting the video market in the US every season, the cord-cutting craze only promises to get worse, at least in the short term. Indeed, Moffett predicts that the annual cord-cutting rate will soon climb to around 3%, or over 2.7 million subscribers a year. And, as Moffett freely admits, that rate could well climb to 4%, 5% or even 6% per year in the future because the market is still so unsettled and unpredictable. “There is, unfortunately, no roadmap,” he notes.

And yet, even with all the unknowns in the market out there, there’s still hope that cord-cutting could abate at some point. For one thing, as bad as the second quarter numbers were, the quarterly rate of acceleration actually declined from the previous quarter. So, as Moffett puts it, things “got worse less slowly” in the spring despite some “worst-case scenario” market expectations that the cord-cutting rate might take off even more than it did.

Further, with such major TV programmers as Walt Disney Co. (NYSE: DIS) and CBS Corp. (NYSE: CBS) planning to flood the market with even more OTT networks and more skinny bundle services spreading their wings, the video market could easily end up glutted with too many viewing alternatives. That could lead to the weaker streaming services closing their doors, as we already started to see last week with NBC Universal shuttering its two-year-old comedy OTT network, Seeso. (See Disney Joins OTT Bandwagon and CBS Streaming Service to Expand Globally.)

Plus, with no vMVPD or single-network OTT service likely to be able to duplicate the variety and diversity of offerings that traditional pay-TV bundles deliver, there could easily be a backlash against these rival services as consumers realize they’re not getting everything they want. In turn, that could lead to a slow, gradual trickle of subscribers back to the much-derided “heavy” bundles that are shedding customers in bulk today.

read more here:

http://www.lightreading.com/video/ott/are-cord-cuttings-days-numbered/a/d-id/735406?

Ad Industry Unites for First European Viewability Standard

The European ad industry has published its first set of viewability principles as it works to create a standards framework that it hopes will become the benchmark online. The new European-wide framework aims to help reduce discrepancies, as currently different platforms and different agencies have their own standards.

The European Viewability Steering Group, set up by the IAB Europe, WFA and European Association of Communications Agencies, aims to provide a “quality benchmark” that should improve the accuracy and consistency of measuring viewable impressions. It is now looking for suitable auditors to ensure its principles are being met.

download your copy of new standards here

Verizon Ends Its YouTube Boycott

Verizon said Tuesday that it will resume buying video ads on YouTube after a five-month break that was triggered by concerns about the kinds of content appearing near its brand.

John Nitti, chief media officer at Verizon, says the company has hired Integral Ad Science, an outside ad analytics company, to verify both that it’s only paying for ads that have a sufficient chance to be seen and that those ads aren’t running near anything offensive, violent or otherwise unsuitable.

Verizon is still testing Integral Ad Science’s solution for YouTube, but expects to return its spending on the platform to normal if all goes well.

Third-party verification focused on viewability and brand safety are missing from both YouTube, which is owned by Google, and “other partners that have a large amount of user-generated content uploaded on a daily basis,” Nitti adds. (Update: Google points out that it has supported third-party viewability reporting on YouTube via companies such as Integral Ad Science, Moat and Double Verify since 2015.)

“This is an overall industry issue that Verizon is trying to address across the board, not just with Google and YouTube, but with all of our partners,” Nitti says. “The need to have consistency and measurement and for us to deploy the Verizon standard is pinnacle to get to the transparency that every marketer deserves.”

In addition to Verizon, major brands including AT&T, PepsiCo, Procter & Gamble and Johnson & Johnson said they were freezing their ad spending on YouTube earlier this year after press reports about ads appearing next to content like ISIS videos.

read more here:

http://adage.com/article/digital/verizon-ends-youtube-boycott-brand-safety/310123/

Nielsen to Credit Video Views on Facebook, Hulu and YouTube

Broadening its visibility into the world of digital video and OTT distribution, Nielsen said it will begin crediting video content distributed on Facebook, Hulu and YouTube.

That added capability, delivered via Nielsen’s Digital Content Ratings, will enable TV and digital publisher clients to capture viewing of their content within their reported audience numbers, Nielsen said, noting that this “consistent and transparent view ensures a level playing field” because it provides access to the same information across both publishers and platforms.
While enabled publisher clients will be able to receive credit for video offered on Facebook and YouTube in Nielsen’s Digital Content Ratings, Hulu will be providing “select media partners” with credit for current series content that it distributes, Nielsen said.

That expansion follows Nielsen’s announcement last month that “eligible TV viewing” from YouTube TV and Hulu’s new live TV service would be included in its Digital in TV Ratings.

“The inclusion of video content distributed on Facebook, Hulu and YouTube in Nielsen Digital Content Ratings is a major accomplishment and part of our ongoing commitment to providing the industry with independent, comprehensive measurement of the evolving consumer landscape,” Megan Clarken, president of product leadership at Nielsen, said in a statement. “Through capturing this audience, Nielsen is providing publishers, agencies and advertisers with a better picture of today’s media consumption, with comparable metrics.”

read more here:

http://www.multichannel.com/news/advanced-advertising/nielsen-credit-video-views-facebook-hulu-and-youtube/414612