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All Places > In the Limelight Blog > 2015 > January

Super Stream Sunday: Who's In?

Posted by ckirlin Jan 30, 2015

Super Bowl 2015.jpg

Who's planning to watch the Super Bowl online this Sunday?


2015 is the fourth consecutive year that fans can catch the live game online. Since NBC announced that game day activities will be streamed for 11 glorious hours—including, for the first time ever, the halftime show—to U.S. based desktop and tablet viewers, free of charge, anticipation has been building like never before. (The mobile live stream is available at no charge exclusively to U.S. based Verizon subscribers via the NFL mobile app.)


Oh, and bonus for pay TV subscribers: Your cord-cutting loved ones will stop asking to "borrow" your credentials! Terrific.


With media fragmentation growing and the sales impact of traditional Super Bowl advertising being called into question, NBC's Super Stream Sunday will prove to be an effective monetization strategy in the long run. Online streaming gives advertisers the ability to reach additional viewers, with the added potential of serving more targeted ads.


Still, at this point in history, why would any advertiser invest in a channel that is historically 200x smaller than the linear broadcast audience, as 18 of the 70 Super Bowl XLIX telecast advertisers did? A 30-second national television spot sold for $4.5 million this year, and while I have not seen verifiable reports of what it cost to run an online spot, NBC reports that it generated "eight figures" of revenue in online ad sales, or 3x what it did online in 2012. So while the cost of running online ads alongside televised ads was not monumental, the CPM is dramatically higher.


Which may explain why all but one of the Super Bowl advertisers are running the same creative on linear broadcast and online this year. Until the ROI of the model is proven, incurring additional production costs (which average $1 million per spot) may not be at the top of the list for brands that just paid the highest price for a Super Bowl spot in television history... though having an online presence certainly is.


Outlier T-Mobile does plan to run a spot titled The Vulture, which is the first-ever Super Bowl ad created specifically for digital broadcast. I believe we will see this trend continue. By broadcasting their ads live to an online-only audience, brands can reach a demographic that was previously out of reach on Super Bowl Sunday: cord cutters. It is a well documented reality that most millennials just don't watch live TV, and they aren't the only ones. When these consumers gather in the digital arena for game day, brands have a collective captive audience. Today's cord cutters are tomorrow's purchasing power after all, and advertisers have to start somewhere. TV 2.0 is here.


This year, total projected Super Bowl viewership is expected to increase by 150% over 2014; I expect the portion of online viewers to rise even more dramatically than that, beating last year's average of over 500,000 viewers per minute. As a point of comparison, online viewership in the U.S. exceeded 5 million for the U.S./Belgium match in the 2014 FIFA World Cup, shattering previous records. While I do not expect online Super Bowl viewership to be that high, I won't be surprised if it doubles from last year to hit the million mark.


Whether advertisers see returns from their online spots remains to be seen. But live sports are one of the last holdouts of linear broadcast, and the Super Bowl is arguably the paragon of live sports casting in the U.S. The erosion of linear TV advertising revenues has broadcasters pursuing other options. Free online streaming of the Super Bowl XLIX is one of them.


How do you think it will play out—for viewers, brands, and broadcasters? Bit of a nail biter if I do say so myself.


TV 2.0

Posted by jthibeault Jan 23, 2015

We all know the typical television experience—you plop down on the couch, pick up your remote, hit the power button, and whamo, the TV comes on and content starts playing.


But that tried-and-true television experience is undergoing a massive evolutionary change thanks to a growing host of upstart technology companies bent on changing the way viewers consume video content. Over the past decade companies like Netflix, Amazon, Hulu, YouTube, and M-GO have challenged incumbents around the distribution and consumption of video.


But the incumbents aren’t taking it lying down. Many of the biggest operators in the U.S. are fighting back against both that rising tide of technology-based startups as well as other network operators (i.e., Verizon, CenturyLink) jumping into the content game. The result? Viewers have become empowered and that traditional television experience is being tossed out the window.


What’s driving this transformation? I’ve identified three key trends underpinning this radical shift in how we watch television:

  • IP delivery and anywhere access
  • Direct to consumer
  • Apps and interactivity


IP Delivery and anywhere access

The traditional television experience is constrained. First by the fact that it is contained to a single device (i.e., the TV). And second by the way it is distributed—over wires, through the air, or via satellite. Both of these inherently limit where the signal can be consumed and by whom. But the new entrants to the television market don’t rely on traditional delivery methods. Instead, they leverage a growing, ubiquitous phenomenon. The Internet. Through this global, massive IP-based network, upstart media companies are able to distribute content more cheaply and to more places (including the television). And that has appealed to a consumer base that is increasingly connected to the Internet—they want to access the content to which they subscribe from wherever they are, on whatever device. FIFA 2014. The Olympics. Downton Abbey. All of this content shares one thing in common—it’s freed from location. Viewers can consume it from any device, anywhere in the world. They are no longer tied to their couches, their family rooms, and especially a schedule of times dictated by broadcasters. IP delivery enables the opportunity of anytime, anywhere access across a host of different devices. The upstart challengers to the television status quo have relied on this just as consumer behavior is shifting to multi-device viewing (check our Google’s Multi-Screen World study for a snapshot of this behavior change). But the incumbents aren't sitting idly by. They see the shift from to IP and are embracing it. Comcast, TimeWarner, Cox, DirecTV, Dish. All of them offer an IP-based OTT offering for subscribers to access content on their different devices (what’s more, many content owners and broadcasters are using IP to deliver their content to television stations and other distribution hubs; it’s a lot cheaper than satellite). IP and multi-device viewing have truly liberated traditional linear television content from the confines of the family room.


Direct to consumer content

Consumers are gaining more choices in how and where they source their content, which is right in the wheelhouse of these new entrants to the television market. Companies like Amazon and M-GO are building their content libraries and offerings on a direct-to-consumer model just as incumbent broadcasters are exploring the opportunity as well— HBO GO is delivering content directly to consumers; CBS is doing the same; and Dish Network is cobbling together a streaming package for cord cutters. But none of this would make any sense if audiences were tied to a specific location and a specific time. IP delivery coupled with anywhere access and combined with the power of web-based applications provides content owners the ability to offer their wares directly to consumers. Building a subscription-based website can seemingly happen in a few weeks and content protection (like Widevine, UltraViolet, Adobe Access, and Microsoft SmoothStreaming) has continued to become harder to crack and more accepted by consumers. Not only does going direct change the way consumers watch, but it also changes the relationship that consumers have to the content providers. Whatever the end result, it’s clear that unshackling the content from the broadcaster is what consumers want and what content owners are starting to provide.


Apps and interactivity

In the traditional television experience, content consumption is all one way. Sure there have been attempts at providing bi-directional interaction through the remote control but they were kludged together at best. With the shift from traditional broadcast to IP, content can now be integrated into application experiences enabling content owners and distributes to wrap interactivity (and monetization) around their content. For example, rich application experiences can include suggested or recommended content, social media integration (for direct engagement with fellow viewers), and even opportunities to purchase. Think image or face recognition and enabling viewers to click on items in a video for more information…or to purchase. Apps can open an explosion of big data around video content enabling entirely new features and functionality that aren’t available with traditional broadcast. But the upstarts aren’t just bringing these apps to the market. Incumbents and new entrants alike are launching software across the entire ecosystem of devices—phones, tablets, PCs, Web, smart TVs, STBs, and even game consoles. Apps are becoming the new gateway to how consumers engage with content. A generation of consumers growing up with this new television experience doesn’t want to just watch the content. They want to interact with it…and that can only happen with content delivered through an application.


Say “hello” to TV 2.0

Whatever the final outcome, one thing is clear—the rash of technology companies jumping into the traditional television landscape, and the incumbents who are fighting back, have left it irrevocably changed. Call it TV 2.0, a new television experience in which viewers can not only access traditional TV content from any device, anywhere in the world, but do so in a more interactive, immersive manner through engaging applications. But it’s not all rainbows and unicorns. As more content gets pushed via IP, we put increasing strains on the Internet. In order for both incumbent and upstart to provide the kind of “broadcast quality” experience that consumers expect from this content (regardless of where or how it is delivered), they will need a bulletproof method of delivery, something that can fly past the growing congestion on the Internet and ensure that content is not only delivered to wherever consumers are, but flawlessly as well.


What does the future really look like? Will we really have a-la-carte content offerings and an application to manage our subscriptions? Will consumers be able to subscribe to just the content they want? Only time will tell as continued innovation driven by new entrants to the market continues to upend the traditional television experience. But one thing is clear—we are in a brave, new world for how we watch TV and there’s no going back.