The disappointment of ‘House of Cards’ and its final season

It seems like Netflix’s “House of Cards” had a real opportunity for a fresh start with season six.

Granted, the behind-the-scenes turmoil probably made this season particularly challenging: Production was already underway when “Star Trek: Discovery” actor Anthony Rapp came forward with allegations that Kevin Spacey made a sexual advance towards him when Rapp was only 14. In response, Netflix and production company Media Rights Capital halted production and ultimately decided to rewrite the season without Spacey’s character Frank Underwood.

If you’ve watched “House of Cards,” you know that this must have been a big change, since Underwood and his political schemes have been at the center of the show for five years. Still, the previous season ended with Robin Wright’s Claire Underwood taking over the presidency, so it seemed like the right time to rethink this as a show that’s centered on Claire.

What we got, however, was a season that’s still very much about Frank Underwood. Sure, he’s died offscreen before the season starts, and Spacey never appears in these new episodes. But he still casts a long shadow over the show, with all of the characters focused on the mystery of his death and the power vacuum he left behind. On the latest episode of the Original Content podcast, we try to explain why we found this approach so unsatisfying.

In addition, we talk about the death of comics legend Stan Lee and Hulu’s plans to create multiple series based on “Wild Cards,” a set of superhero stories edited by George R.R. Martin. This, in turn, leads us to the question on every “Song of Ice and Fire” fan’s mind: When is he going to finish the next book?

listen here to the poadcast:

Ad-Supported OTT Viewers Incremental To TV

Consumers that watch ad-supported streaming over-the-top video services are largely incremental to those that watch linear TV. They are a “high-value” audience. as well, per the IAB.

The IAB released its report, “Ad Receptivity and the Ad-Supported OTT Video Viewer,” at the first edition of its NewFronts West event, held in Los Angeles Tuesday.

The IAB sought to explore who watches OTT video and determine some of the defining characteristics the audience.

The report found that viewers of ad-supported OTT services (i.e. YouTube, Crackle, Roku Channel) do not typically watch linear TV. Over half are cord-cutters or cord-shavers. In other words, they make up a largely incremental audience to linear TV.

The IAB also found that even though the primary audience for ad-supported OTT services are the “typical ad blocking demo,” skewing younger and male, they are not opposed to ads delivered through these services.

“ASV OTT viewers are more receptive to advertising than either SVOD OTT or TV Only viewers,” the report says. “Many report they enjoy interacting with ads. In fact, ASV OTT viewers think of ads on this platform as being better.”

All told, 73% of adults surveyed that watch OTT video also say they watch ad-supported OTT video, with 43% saying they watch ad-supported services the most out of their streaming options.

That suggests that while ad-free options like Netflix and Hulu remain powerful forces in the industry, there is still opportunity for ad-supported options.

The full IAB report can be found here.

Why is Everyone Afraid of Amazon?

Compared to some of the other tech giants, Amazon is still a relatively small player in the advertising world. Google’s total ad revenues in their most recent quarterly financial results were ten times larger than Amazon’s ($2.5 billion). While Amazon is included in pretty much every acronym used to group the multinational tech companies; FAANG, GAFA, FATBANG and the like, it is still not afforded the same status as the ‘duopoly’ of Google and Facebook.

But for many, Amazon is the ‘sleeping giant’ of the advertising industry, and represents Silicon Valley’s biggest challenge to the media industry. Ex-WPP CEO Martin Sorrell has said that of all the threats facing ad agencies, Amazon is the one that keeps him up at night. Scott Galloway, who explored the growth of Amazon, Google, Facebook and Apple in his book ‘The Four’, last week said at the Brandemonium conference that Amazon should be feared by the rest of the four.

With each of these companies continuing to grow revenues at an extraordinary rate, it’s easy to forget why some consider Amazon in particular to be the most threatening. Below, we’ve broken down the key areas Amazon is operating in, and why it may be poised to knock the duopoly off their advertising pedestal.

Amazon Advertising

Amazon’s advertising business is far from best-in-class today. As a recent Digiday report claimed, some advertisers are frustrated with what they describe as clunky dashboards and limited functionality.

But the company has been taking steps to simplify its ad offering, bringing its four separate marketing divisions together earlier this year under the ‘Amazon Advertising’ banner.

Amazon runs sponsored ads, which promote an advertisers’ product within search listings, as well as display and video ads. While sponsored ads only appear on Amazon, display and video ads are run across Amazon’s properties (which include the likes of IMDb and Twitch), as well as other sites partnered with Amazon. These ads can only be bought through Amazon’s owned and operated DSP.

Obviously the key appeal here is Amazon’s user data, and its ability to serve ads to users who are primed to buy – in the case of ads served on Amazon.com, the user is actively looking to make a purchase. Amazon’s DSP allows marketers to target audience segments based on buying behaviour – for example, an advertiser can target users currently in market for their product, or who are habitual buyers of their product, and can retarget on third party sites those who’ve previously searched for the product.

“Advertisers know the Amazon audience is huge and primed to buy, and that Amazon’s platform will allow them to target based on real shopping and buying data—not just demographics and interests,” said an eMarketer report released earlier this year.

These benefits seem to be overriding concerns about clunky interfaces. A report released by Advertising Perceptions last week claimed that Amazon’s DSP is now the most-used by advertisers (in terms of the percentage of marketers using it), jumping ahead of Google Marketing Platform (formerly Doubleclick Bid Manager or DBM).

And ad revenue is soaring as Amazon ramps up the ad business. The company’s ad revenues sat at around $600 million in 2013, while at their current pace Amazon are pulling in $10 billion per year and rising.

Eroding the Agency Model

Amazon’s increased focus on advertising at a glance looks like good news for agencies, offering them an attractive new avenue to funnel their clients’ ad spend into.

But many fear that increased advertising on Amazon could reduce the need for agencies. as marketers look to cut out the middleman and plan their campaigns directly with Amazon. Reports surfaced earlier this year that Amazon has begun working with brands including Lego and HP directly.

“Amazon are creating products, similar to Facebook and Google, which are exceptionally easy to operate plus they already have direct to brand conversations as they have major brands selling through the platform,” said Wayne Blodwell, CEO of the Programmatic Advisory.

Blodwell says it’s unlikely that Amazon will cut out agencies completely. “If you bring those two together it’s clear that agencies could easily be disintermediated, but much like Facebook and Google I think advertisers need specialisms to help navigate wider marketing options and to best understand where to deploy budget, as well as the operational excellence in operating the platforms themselves. It’s like anyone can learn to drive, but very few become Lewis Hamilton.”

We have also seen specialist Amazon agencies emerge designed to provide an end-to-end for all of Amazon’s ad products. But while not all brands will work with Amazon directly, any loss of business during what is already a precarious time for agencies is bad news.

Voice Search

One of the notable themes at this year’s CES was the battle between Google and Amazon connected home devices, an important component of which is these devices’ voice search capabilities.

Opinion is split on if and when voice search will overtake typing – CSS Insight analyst Ben Wood believes voice will be the primary search input by 2021, though this prediction is seen as wildly optimistic by some.

If voice search does take off though, Amazon could be well placed to soften Google’s iron grip over search ad revenues. Amazon’s smart speakers currently make up 75 percent of the UK market, compared to 16 percent for Google. Google’s shareholders have begun to question how Google will fare as voice search grows.

Amazon is continuing to invest at a frightening pace too. Scott Galloway claims that “Amazon has more job openings in their voice group than Google has in the entire company right now.”

Voice search at the moment remains much harder to monetise than typed search, since audio ads are more intrusive than ads on a screen. This means fewer can be delivered in any given search without destroying the user experience.

But this is a much bigger problem for Google than it is for Amazon. Google has much more search ad revenue to lose, and Amazon leads users straight from voice searches into purchases via its ecommerce platform.

If Amazon establishes a firm lead in voice search, this data would act as an invaluable enhancement to Amazon’s DSP. Amazon’s shopping data already makes its DSP very attractive to advertisers – adding a bank of wider search data to rival Google’s would make it even more formidable.

Premium Video and UGC

At the moment Amazon’s primary video platform, Amazon Prime Video, is built to hook customers into Prime membership and onto the ecommerce platform, rather than generate money itself.

While this means it isn’t currently competing for TV ad dollars, it is competing for eyeballs, and has the sheer spending power necessary to fund a huge library of premium content.

One of the clearest examples of this is Amazon’s move into sports broadcasting. Live sports has been viewed as something of a crutch for linear television, and if Amazon snatches away expensive broadcasting rights it would be very bad news for the likes of Sky and BT.

When it comes to spending power, there’s no competition – Amazon’s market cap currently sits at $803 billion, while BT’s is $32 billion. In the most recent auction for Premier League broadcasting rights Amazon dipped its toes in the water for the first time, seen by many as a precursor to a bid for a much larger package later down the line.

The growth of subscription video services like Amazon Prime Video is already squeezing revenues for traditional broadcasters, with Ofcom finding earlier this year that subscriptions to Netflix, Amazon and NOW TV in the UK have overtaken subscriptions to pay TV services.

This pressure could ramp up further if Amazon makes a long anticipated move into ad-funded premium video. The Information reported earlier this year that the company is working on an ad-supported video service for Fire TV device owners, which would have a reach of around 48 million.

While Amazon is using Prime to target the premium video market, its simultaneously hoping its live-streaming platform Twitch can knock YouTube off its perch in the user-generated content market.

read more here: videoadnews.com

Major OTT Companies Securing Foothold in Sports Streaming

In their attempt to entice and engage more customers, leading over-the-top (OTT) companies like Facebook and Amazon have tapped into the sports streaming market.

At the Sport Business Summit held recently in London, executives from Facebook and Amazon have discussed about the engagement of these Internet-based companies in sports matches streaming.

In the words of Peter Hutton, Facebook’s Director of Global Live Sports Partnerships and Programming, Facebook believes it can help congregate sports fans.

In addition, he said that the social media giant thinks it can facilitate streaming enthusiasts to experience sports “in a better way.”

The Facebook executive admitted that shifting from watching on traditional TV to availing the services of OTT companies is certainly challenging.

However, Hutton contended that smooth transition is facilitated by Facebook through its partnerships with broadcasters.

Social media platforms can also help rake in new sports fans like what happened during Facebook Watch’s coverage of the Major League Baseball.

It enabled the real-time interactions among the audiences, the coaches, and the athletes during the live presentations of the baseball games.

Amazon Prime Video, the subscription video-on-demand (SVoD) division of the e-Commerce juggernaut, presents a wide array of sports programming as well.

These include the National Football League’s matches, the US Open Tennis Championships, and the soccer games of Germany’s Bundesliga.

By 2019, Amazon Prime Video will present 20 English Premier League matches across two particular dates in December. This schedule also consists of Boxing Day programming.

Alex Green, European Managing Director of Amazon Prime Video, also spoke at the Leaders’ Week of the London sports business conference.

He cited that the SVoD service of the online retail giant is certainly committed to sports broadcasting for the long haul.

Green elaborated on the fact that plenty of today’s consumers are anticipated to register for a 30-day trial free of charge to view the Boxing Day matches.

In addition, this trend will propel an increased surge in new members during the busiest shopping period of the year.

read more here: digitaltvlife.com

Research: OTT in 64% US homes

Market research and consulting company Parks Associates has released its updated list of the top 10 subscription over-the-top (OTT) video services in the US market, based on estimated number of subscribers. Netflix, Amazon, and Hulu continue to hold the top three slots, with HBO Now and Starz moving into the top five.

1. Netflix
2. Prime Video Users (Amazon Prime)
3. Hulu (SVoD)
4. HBO Now
5. Starz
6. MLB.TV
7. Showtime
8. CBS All Access
9. Sling TV
10. DirecTV Now

“Which company is the leading OTT video subscription service remains a topic of debate,” said Brett Sappington, Senior Director of Research, Parks Associates. “According to our estimates, Amazon has more Prime Members than Netflix has subscribers. However, when you consider only those Prime Members that use Prime Video, Netflix is the largest. Hulu remains the third largest but continues to grow its subscriber base.”

The firm notes the rise of a second tier of OTT video services from services with recognised brands, including several with high profile original content. Online pay-TV services Sling TV and DirecTV NOW round out the top ten, ahead of similar services Hulu with Live TV, YouTube TV, and PlayStation Vue. Online pay TV has been one of the fastest growing segments in the OTT video space, with aggressive marketing by all.

“HBO, Starz, Showtime, and CBS All Access demonstrate the powerful attractiveness of original content through series like Game of Thrones and Star Trek: Discovery,” Sappington said. “This pattern suggests new services such as WarnerMedia’s DC Universe and the forthcoming streaming service from Disney could achieve success quickly.”

The top subscription sports OTT video services are MLB.TV, WWE Network, and ESPN+. MLB.TV continues to lead the sports OTT subscription category, benefiting from its long tenure as a streaming service and popularity among dedicated baseball fans. WWE also has a dedicated fan base and publicly reported having over 1.2 million US subscribers at the end of Q3 2018. ESPN+ is a newcomer to the OTT video marketplace but recently announced that it had exceeded 1 million subscribers.

Additional data from Parks Associates’ OTT Video Market Tracker, which tracks the content offerings, business strategies, and subscription numbers for OTT services in North America:

– OTT video subscription penetration has reached 64 per cent of US broadband households. Over two-thirds subscribe only to one of the top three services, Netflix, Prime Video, or Hulu.
– The online pay-TV audience is similar to the OTT audience—they are younger and quicker to adopt new technologies when compared to traditional pay-TV households.
– Over the past three years, OTT churn rates have gradually fallen each year from 31 per cent of OTT subscriptions cancelled each year in 2015 to 28 per cent in 2018.

read more here: advanced-television.com

Netflix ‘on course’ to pass 10 million subscribers in UK

Netflix is on course to pass the 10 million-subscriber mark in the UK by the end of this year, according to research by MTM.

According to MTM, some 1.1 million consumers intend to subscribe to the service by the end of this year, taking the service’s total past the 10 million subscriber mark.

MTM says that Netflix subscribers are among the most satisfied users of SVOD services in the UK with 88% claiming to be satisfied, the highest rating for any subscription TV or video service. This means that churn levels for the service are a less significant challenge than for other SVOD offerings.

According to MTM, Netflix’s integration as part of the Sky Q offering could support further growth for the SVOD service, with 200,000 current Sky Q users looking to subscribe to Netflix by the end of 2018.

MTN says that the ability to easily access Netflix’s service on the primary TV screen will likely increase Netflix’s share of overall viewing within Sky Q homes, pointing out that 31% of all cable operator Virgin Media’s homes with Tivo advanced TV set-tops currently access Netflix via their set-top box.

According to MTM’s ScreenThink market research tracker, based on a survey of over 3,000 UK online users, almost 25% of internet users say that services such as Netflix and YouTube are the first services they turn to when looking for TV or video content, rising to 39% of 16-24 year-olds.

Conversely, 54% of UK pay TV subscribers now believe that their TV service is overpriced, and 1 in 4 are thinking about cancelling their subscription.

“The most recent ScreenThink study provides a fascinating snapshot of a market in transition, demonstrating the significant impact of Netflix and other OTT video services in the UK market,” said Jon Watts, managing partner at MTM.

read more here: digitaltveurope.com

The 30-Second Ad Makes a Comeback, Now 55% of All Video Ad Views

In Q3 2017, the 30-second ad was an endangered species. It made up just 27 percent of all video ad views as marketers attempted to cram their messages and branding into shorter ads that viewers would tolerate. That quarter, 67 percent of video ads were 15-seconds long.

What a difference a year makes. Now, people do most of their video streaming on their living room TV, and that’s a win-win-win for all parties. Viewers get true lean back viewing, publishers get a receptive audience, and marketers get high completion rates and lots of unskippable inventory.

In Q3 2018, 55 percent of all video ad views were 30-seconds long, 41 percent were 15-seconds long, and 2 percent were 6-seconds long.

This data comes from the Q3 2018 Video Advertising Benchmarks report released by cross-platform advertising solutions specialist Extreme Reach. Its data comes from major brand advertising served by Extreme Reach.

“The CTV opportunity is one that advertisers are increasingly leveraging, and the impact that’s having on ad length, while unexpected, makes complete sense,” said Mary Vestewig, senior director of video account management at Extreme Reach. “I expect we’ll see even more exciting changes driven by CTV as consumer adoption grows and technology for targeting and measurement evolve.”

Not that everything is good news for the 30-second ad: The report finds click-through rates for 15-second ads were much higher (although rates for both lengths were lower than last quarter): The CTR for 15-seconds ads is 0.30 percent, while the CTR for 30-second ads is 0.14 percent.

read more here: onlinevideo.net

Facebook sees video growth but admits it is still ‘well behind YouTube’

Facebook CEO Mark Zuckerberg said the company is seeing video expand dramatically across its ecosystem, but admitted that while its dedicated Watch service is growing quickly it is still “well behind YouTube”.

Speaking on the company’s third quarter earnings call, Zuckerberg reiterated that video is one of Facebook’s key priorities for its core app along with a much bigger focus on communities and groups.

However, he said that Facebook has had “challenges” reconciling passive video consumption with “what people uniquely want from us, which is meaningful social interactions.”

“Video has grown a lot on our services, but we hit a dynamic where when it grows in Feeds and Facebook and Instagram, it displaces some social interactions and people tell us it makes the experience less valuable even though they’re spending more time on it.”

The company’s solution to this has been to build separate video experiences with the launch of Facebook Watch and Instagram’s IGTV – a strategy that seem to be paying off, even though these services still trail their established rivals.

“What we found is that when people seek out video experiences intentionally, they don’t displace social interactions as much and the quality of the experience is generally higher,” said Zukerberg.

“Watch has really hit its stride and it’s growing incredibly quickly, about three-times in the last few months in the US alone. IGTV is still earlier in its development, but I think we have a good sense of how to make it work as well.

“To be clear, these services are still well behind YouTube, which is our primary competitor in this space, but they’re growing very quickly.”

Another issue flagged by Zuckerberg on the call was that video monetises “significantly less well per-minute than people interacting in feeds” – a factor that means as video grows it will displace services that would probably be greater revenue generators for the company.

This is just one of the major shifts Facebook predicted for its business over time, as it noted that the way people are connecting is also moving more to private messaging and Stories.

“People feel more comfortable being themselves when they know their content will only be seen by a smaller group and when their content won’t stick around forever,” said Zuckerberg. “Messaging and Stories make up the vast majority of growth in the sharing that we are seeing.”

Last quarter, Facebook shared for the first time the number of people who use at least one of its apps each month – a metric that Zuckerberg said is a “better way to measure our community over time” as so many people use more than one of Facebook’s apps.

Facebook said it now estimates that more than 2.6 billion people use Facebook, WhatsApp, Instagram, or Messenger each month, and more than 2 billion people use at least one of its family of services every day on average.

read more here: digitaltveurope.com

Strategy Analytics: TV to account for 80% of video ad spend in five years

Even though digital video is the fastest growing digital advertising category, TV will still account for the vast majority of video ad spend in 2023, according to Strategy Analytics.

The research firm predicted that TV will represent 80% of global video ad spend in 2023 while digital video will make up 20% of spend, with a breakdown of roughly US$210 billion and US$51 billion respectively.

This compares to an estimated global TV ad spend of US$195 billion and online ad spend of US$30 billion this year, with the US accounting for nearly 36% of global TV ad spend in 2018.

“With consumers increasingly watching video across platforms, including mobile devices and connected TV screens, audience measurement agencies are evolving their tools, however, cross-device measurement solutions are still geared towards reach-based metrics, and in a fragmented online world, no media can provide reach better than television,” said Michael Goodman, Strategy Analytics’ director of TV and media strategies.

read more here: digitaltveurope.com

Deutsche Telekom Launches MagentaTV

Deutsche Telekom launched a new OTT service Wednesday as the German market heats up, with research suggesting that Netflix now has more subscribers than paybox Sky Deutschland. That finding comes after similar trends were reported in the Britain, meaning that streaming subscribers now surpass traditional pay-TV users in Europe’s two biggest markets.

The deep-pocketed incumbent telcos in Germany and the U.K. – Deutsche Telekom and BT, respectively – also want in on the action. Deutsche Telekom has revamped and re-branded its television offering to MagentaTV, which launched Wednesday.

MagentaTV will offer series and movies as well as programming from the catchup services of German pubcasters ARD and ZDF. In addition to a full-fat 300-channel service available through an IPTV settop box, there will be a skinnier over-the-top streaming equivalent for €7.95 ($9.07) a month. For that, subscribers will get about 75 channels.

“Telekom’s TV business is one of the key pillars of our growth strategy,” said Michael Hagspihl, MD, of the division that includes MagentaTV. “The combination of the best platform, strong partnerships and exclusive content remains our recipe for success for the future.”

The German telco has already inked a deal to allow its TV subscribers to access Netflix via its service.

The latest research underlines Netflix’s increasing sway in the German market. The streamer does not break out subscriber numbers by territory internationally, but Ampere Analysis estimates that it overtook Sky in the third quarter of last year, with 5.1 million customers compared with Sky’s 4.8 million. Amazon had 9.9 million subscribers at that point, with customers generally signing up to the wider Prime retail service, which includes Prime Video, instead of the TV offering as a standalone product.

Sky Deutschland’s latest subscribers count is 5.2 million, but it is safe to assume that Netflix and Amazon have also registered new customers. While the growth of the U.S. SVODs is a threat to the traditional pay-TV firms, it is not an either-or choice for many households, which take both. The research suggests that more than half of German broadband homes already take at least two SVOD services.

Aside from Netflix and Amazon, there is also room for more niche entrants. In transactional VOD, Pantaflix is a prime mover in Germany and has deals with major U.S. studios and local players.

read more here: variety.com