Research: SVOD Wakes Up to Reality

Reality was the second-most commissioned genre for linear services and third-most commissioned genre for video on-demand (VOD) services, according to research from Ampere Analysis on commissions, renewals and cancellations in 2019.

Data from Ampere indicates that Netflix has ramped up production of reality content compared with previous years. While in January 2018 Netflix had four original reality TV shows available, by year-end 2019, the number had grown eightfold to 32 original reality titles, with dating show “Love Is Blind” among its top-performing shows in Q1 2020.

Other findings include:

  • The most commissioned genre in the United Kingdom and the United States in 2019 was documentary, with one-off commissions a frequent occurrence. Documentary represented 31% of all first-run series ordered in 2019.
  • The second most commissioned and renewed genre was reality — at 14% of all commissions in 2019.
  • In total, 337 reality shows were commissioned in the United Kingdom and the United States.
  • Comedy closely followed reality and was the third-most commissioned and renewed genre. Almost one quarter (23%) of shows are yet to begin series production, reflecting the longer production period required for scripted series. First-run commissions accounted for 67% of all series announced in 2019 — this means shows being ordered for a first season, including limited series.
  • Most renewals were reality (24%), with comedy (17%) and documentary (17%) following closely behind.

Linear versus VOD findings include:

  • Renewals in 2019 are skewed towards linear commissions, with linear series representing 85% of all U.K. and U.S. renewals in 2019.
  • High-profile unscripted linear renewals included 19th and 20th season order for MTV’s U.K. Reality series “Geordie Shore,” and a 17th season order for NBC’s music competition show “The Voice.”
  • In 2019, linear channels cancelled 515 shows while VOD services cancelled 151. However, this is slightly skewed by the cancellations of series with a predetermined limit on the number of episodes. Once these shows are removed from the analysis, data shows that linear channels cancelled 178 shows, while VOD services cancelled 66.
  • 65% of linear renewals were unscripted series, in comparison with just 25% of all VOD renewals, with streamers preferring to focus on higher-budget, scripted fare.
  • Reality was relatively safe from cancellation on both linear and VOD platforms — only 8% of all cancellations were reality.

“While reality has been a staple for linear TV due to lower per-hour production costs and continued popularity among consumers, VOD services have been increasingly investing in the genre,” said Ampere analyst Olivia Deane in a statement. “With Netflix already commissioning two more seasons of top performing title ‘Love is Blind,’ reality looks like it will be the next battleground for linear and VOD services.”

Roku: Idle TV Sports Viewers Streaming More Movies, TV Shows

With professional (or any) sports on television an early victim of the coronavirus pandemic, new data from Roku suggests linear TV viewers suddenly denied access to sports of any kind have embraced streaming TV shows and movies more aggressively than other Roku subscribers.

March 2020 Week 1 vs. March 2020 Week 3

NBA and NHL linear TV viewers increased their non-sports streaming on Roku among the following genres, respectively:
News: 92.15%, 119.83%
Film & TV: 74.92%, 67.56%
Lifestyle: 66.74%, 51.92%
Live TV: 52.88%, 60.12%
Music: 42.99%, 63.53%
Reality: 41.11%, 30.29%
Kids: 33.48%, 31.29%
International: 23.42%, 34.25%
Comedy: 15.04%, 19.66%
Sports: -49.99%, -71.42%

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“Roku users who watched the NHL or NBA on linear TV in February increased streaming hours on the Roku platform faster than the average Roku user,” Dan Robbins VP, ad marketing & partner solutions, wrote in an April 2 blog.

Robbins said that while overall linear TV usage among sports viewers is flat, they are watching more film, lifestyle, music and news on the Roku platform.

Roku had more than 30 million active accounts in the most-recent fiscal period. It added 1.4 million net accounts in the quarter. Viewers streamed 500 million more hours in Q2 than in the previous-year period, or 9.4 billion hours total.

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Robbins said Roku users who watched the 2019 NCAA Men’s College Basketball Tournament (“March Madness”) on linear TV also streamed more video this March.

“Over the last three weeks, these fans shifted their prime time viewing to entertainment channels in the film & TV genre,” he wrote.

Linear TV Still Trumps Digital in 2020 Political Ad Spending

As campaigning for the 2020 presidential election heads into its final months, political ad spending will hit an all-time high. The hyper-partisan political environment is driving more money than ever into advertising.

New data from eMarketer on federal, state and local political ad spending, including PAC ads for candidates and lobbying activities, finds the 2019/2020 election cycle will reach $6.89 billion.

This is 63.3% higher than the $4.21 billion in spending in the 2015-16 political season, underscoring the intensity of not only the presidential race, but races for congressional seats as well.

Notably, while over-the-top video continues to cannibalize linear TV, political ad spending still resonates primarily on television.

eMarketer reports traditional TV will account for $4.55 billion in spending, with political TV ads representing 3.2% of all TV advertising and 66% of all political ad spending. TV’s share of political advertising is up a bit from the prior election year, as it takes share from radio and print.

“Political spending floods the TV airwaves during the last weeks before the election, raising prices and crowding out other advertisers,” analyst Eric Haggstrom said in a statement. “Despite cord-cutting and declining viewership, TV still offers strong reach, particularly among older Americans who are likely to vote.”

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Haggstrom said the vast majority of political spending goes to local broadcast or cable/satellite providers, as advertisers focus on states, or postal Zip Codes, that can swing an election.

In the 2019/2020 election season, political digital ad spending will grow to $1.34 billion — representing 19.4% of all political advertising and 0.5% of all digital spending. Digital jumps 203% over the 2015/16 presidential election season, when spending was $440 million.

Primary digital platforms for political ads: Facebook and Google/YouTube.

“One of the key benefits of digital advertising over TV is its targeting capabilities,” Haggstrom said. “Granular demographic, audience and list-based targeting allows political advertisers to efficiently reach the right people with the right message.”

 

Parks: Broadcast TV Still Most-Preferred Home Entertainment Option

Who said linear television is dead?

New data from Parks Associates says most American households still consume the majority (topping 50%) of home entertainment video through broadcast television.

The report suggests that while over-the-top video is popular (especially among younger consumers), survey respondents said they spend nearly 20 hours per week on average watching linear TV, compared to nearly four hours on a mobile phone.

Consumers increased by 33% in 2019 the total amount of time spent watching video compared to 2018. The Addison, Tex.-based research group says adoption of OTT video subscription services peaked at 71% of U.S. broadband households.

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Consumers ages 18-24 watch as much video on a computer as they do on a TV set (approximately 16 hours per week).

One-half of U.S. broadband households subscribe to Netflix. Amazon Prime Video is second with a 38% adoption rate. About 20% of broadband households use the free version of streaming music service Pandora. Consumers 18-34 spend nearly five hours per week listening to podcasts.

Separately, after streaming consumers covet recorded programming from the DVR, followed by VOD and DVD/Blu-ray Disc. Pay-per-view brings up the rear.

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Senior analyst Steve Nason said understanding divergent consumer video (and music) habits is key to driving subscriber acquisitions and minimizing churn among video services.

“Different demographics show markedly different attitudes and preferences,” he said.

Indeed, Parks’ data contends Netflix rates higher among women, while premium OTT services such as Starz, Showtime and HBO Now fare better with men.

Nason said the challenge remains with the coveted 18-34-year-old demo, which is the most fickle yet represents future growth of the industry.

“Younger video consumers’ programming and platform preferences are distinct from older segments, which puts traditional pay-TV providers in a difficult position,” he said. “Changing the traditional pay-TV service model could alienate older, high-ARPU (average-revenue-per-user) customers, but not changing could doom future prospects.”

 

Pay-TV Shocker: AT&T Loses More Than 1.3 Million Q3 Subs, Including 195,000 OTT

HBO Max can’t come soon enough for AT&T.

The telecom giant Oct. 28 said it lost 1.16 million pay-TV subscribers in the third quarter (ended Sept. 30). It lost an additional 195,000 AT&T TV Now (formerly DirecTV Now) subs.

The losses compared with 346,000 pay-TV subs jettisoned and 49,000 DirecTV Now subs added in the previous-year period.

The company attributed the losses to customers rolling off promotional discounts, programmer disputes and competition, as well as lower gross adds due to the continued focus on adding higher-value subscribers.

In the past 12 months AT&T has lost more than 3.2 million pay-TV subs as subscribers migrate toward alternative video services, including over-the-top. It ended the period with 20.4 million combined DirecTV and U-verse subs compared to 23.3 million a year ago.

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AT&T TV Now has lost 713,000 subs since launching Nov. 30, 2016, as a $34.99 monthly standalone online TV service. It ended the period with 1.14 million subs compared to 1.85 million last year.

Unlike other pay-TV distributors, AT&T is not supplanting linear TV subs with high-speed Internet. The company lost 83,000 broadband subs compared to a net addition of 31,000 subs last year. It lost 36,000 DSL subs, an improvement from a loss of 45,000 subs in the previous-year period.

AT&T did add 318,000 high-speed fiber subscribers.

AT&T ended the period with 14.3 million broadband subs, down from 14.4 million a year ago.

“The strategic investments we’ve made over the last several years have given us the essential elements to meet growing demand for content and connectivity,” Randall Stephenson, AT&T chairman and CEO, said in a statement.

Stephenson remain upbeat on the company’s future saying the three-year plan delivers both “substantial and consistent” financial improvements over the next three years.

“We grow revenues, [pre-tax earnings] every single year, and free cash flow is stable next year, but then grows in both of the next two years, as well,” he said. “And all of this is inclusive of our investment in HBO Max.”

OTT Video Consumption Skyrockets

Consumers in the United States continue to migrate toward over-the-top video distribution with streaming viewing hours in the second quarter (ended June 30) more than double (130%) from a year ago, according to new data from Conviva.

While major markets dominate overall domestic streaming consumption, Dallas, Atlanta, and Phoenix are the top 3 cities when streaming video consumption is normalized by population — ahead of tech hubs Boston, New York, and San Francisco.

The percentage of televisions connected to the Internet increased 143%, largely driven by Roku with 173% growth and 43% market share of connected TV viewing. Amazon Fire TV was up 145% in viewing with an 18% share. Apple TV was up 129% to account for 10% share.

“In 2019, streaming is coming into its own,” read the report.

Video-on-demand now accounts for 66% of all viewing hours, up from 59% last year. While mobile devices command near equal share of live versus on-demand viewing at 22.8% and 23.7%, respectively, PCs garner more share of on-demand viewing at 16.5% versus 12.6%, while connected TVs command more share of live at 56.5% versus 53.1%.

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Notably, Roku accounted for the majority of all live viewing via connected TV with 53.8%.

The report found that online TV services such as DirecTV Now, Hulu with Live TV, PlayStation Vue and Sling TV saw triple-digit growth in viewing year over year.

Market dynamics, including consolidation and the increase of hybrid business models from media companies such as NBC Universal, Apple, Disney and WarnerMedia, suggest there is even more room for growth and innovation as the lines between business models blur.

Conviva said the growth gap between studios content creators and online distributors closed even more in Q2 than previous quarters, but content aggregators continue to best other services in terms of consumption as well as quality, with viewing hours up 168% year over year.

Not to be outdone, publishers in the United States also recorded impressive growth of 137% in viewing hours year over year. The overall growth in consumption is indicative of headroom for existing streaming services alongside future entrants.

“Increased competition will also spur innovation and, as the industry saw with hybrid models with subscription and ads, more convergence in business models,” read the report.

Facebook and YouTube saw 15% more videos posted as news media led social media with the largest growth in average total video views, up 197% year-over-year. Entertainment led in growth of views per video, up 99%.
While ad-supported VOD and online TV continue to gain traction among consumers, Conviva found that ad buffering remains a “silent engagement killer” among users.

The difference between a viewer making it past the 5% mark in the video stream depends greatly on whether or not the ad flows correctly. In addition, the average streaming ad length reached 24.87 seconds despite the fact viewership drops significantly with 20+ second ads.

“The TV industry of yesterday was built on inflexible standards, antiquated measurement, and limited data. Streaming offers the vast potential of a rapidly maturing market, flexibility, targeting, and data to understand the audience like never before.”

Comcast: Lines Between Linear TV, Digital Video Blurring for Marketers

As over-the-top video expands, the differences between traditional pay-TV and streaming video are eroding, according to new data from FreeWheel, a subsidiary of Comcast.

The Video Marketplace Report outlines the increasing convergence between linear TV and premium digital video – and how that can benefit marketers.

In 2018, 40% of all ad views were delivered on a connected TV, while live viewing grew 86% as consumers watched video content in real-time – spurred by PyeongChang 2018 Winter Olympics and the FIFA World Cup in Russia, according to David Dworin, one of the report’s authors.

“Watching TV can now mean tuning into a program on linear TV, streaming a favorite series on a connected TV, or following a live event on a smartphone. It’s the content, not the pipes, that viewers see,” Dworin said in a statement.

Premium video also saw strong overall growth (27%), continuing a multi-year trend, according to the report.

Indeed, FreeWheel found 52% of advertisers and agencies surveyed are combining digital video and linear TV spots and 91% say they will by 2021.

Another 74% of advertisers say it is important or very important to have integrated digital video and linear TV data/technology distribution channel.

The report cited that just 23% of viewing occurs in the key 8 to 11 p.m. timeslot, while more than 75% of viewing occurs outside of the traditional TV “primetime.”

Another 18% of desktop ad views come between 12 and 3 p.m., underscoring the ease of click-through marketing. Finally, connected TV ad views grew 53% in 2018, which represented 40% of all ad views.

 

 

Cinedigm Launching Comedy Streaming Video Service

Cinedigm March 12 announced a partnership with Comedy Dynamics to launch and distribute their over-the-top video branded Comedy Dynamics Network.

Cinedigm Digital Networks will provide digital distribution of the channel, including third-party platforms, a-la-carte licensing, and a live linear channel.

The Los Angeles-based home entertainment distributor said its networks platform affords Comedy Dynamics the ability to launch both as an ad-supported VOD and SVOD service across mobile devices, connected TVs, and set-top boxes.

The linear channel is slated to roll-out in the spring showcasing Comedy Dynamics’ library of performers, including Jim Gaffigan, Kevin Hart, Ali Wong, Tiffany Haddish, Bill Hicks, D.L. Hughley and Sam Kinison, among others.

“This is an exciting time for comedy, as people are accessing it and demanding it like never before,” Erick Opeka, president of Cinedigm Digital Networks, said in a statement. “The stand-up medium is the perfect complement to the digital realm, providing incredible opportunities for both short-form and long-form content that viewers can enjoy whether they’re at home or on the go.”

Indeed, while Netflix is spending lavishly on stand-up specials featuring Hart (bowing April 2), Ellen DeGeneres, Chris Rock, Hasan Minhaj and Amy Schumer, among others, standalone comedy remains a tough sell.

NBC Universal in 2016 shuttered standalone $3.99 monthly comedy streaming service Seeso, while the Lionsgate/Hart OTT collaboration – Laugh Out Loud – tries to get its footing since bowing in 2017.

Regardless, Comedy Dynamics CEO Brian Volk-Weiss contends there exists a global streaming audience for comedy.

“We want to be everywhere the audience is,” he said.

 

DirecTV Now Raising Prices, Changing Service Plans

Despite losing nearly 270,000 DirecTV Now subscribers in the fourth quarter (ended Dec. 31, 2018), AT&T is initiating a $10 monthly price hike for its standalone online TV service that takes effect in early April.

DirecTV Now is also changing service plan options for new subscribers to include Plus ($50 for 40 channels, including CNN, ESPN and HBO) and Max ($70 for 50 channels, including HBO/Cinemax, ESPN and regional sports networks).

The plans replace existing (wordy) options such as “Live a Little Plan” ($40) with 65 channels; “Just Right” ($55) with 85 channels; “Go Big” ($65) 105 channels; and “Gotta Have It” ($75) for 125 channels.

Existing subscribers will have their plans grandfathered in.

AT&T is also offering OTT streaming versions of its linear pay-TV packages, including “Entertainment” (65 channels for $93 per month); “Choice” ($110 and 85 channels); “Xtra” ($124 for 105 channels); “Ultimate” ($135 for 125 channels); and “Optimo Mas” ($86 for 90 channels).

As cord-cutting increases among consumers, AT&T hopes migrating linear TV subscribers to OTT distribution translates into more broadband subs. The company ended 2018 with 15.7 million high-speed Internet subs.

 

 

 

 

Cost, User Experience Driving OTT Video Adoption

With pay-TV subscriptions down 10% among respondents in a new survey from Horowitz Research, the study found just 71% of 18-34 year-olds subscribe to a traditional pay TV service (cable, satellite, or telecom), compared to 75% of 35-49 year-olds and 81% of TV viewers 50 and older.

Although TV viewing remains bullish — respondents watch an average of 6.5 hours of TV a day — the reality that there are many lower-cost services competing for consumers’ video budgets is impacting the perceived cost-benefit ratio of traditional pay-TV.

According to the study, 74% of cable TV subscribers, 78% of satellite TV subscribers, and 80% of fiber TV subscribers say that they are satisfied with their TV service overall.

However, when asked how “worth it” the TV services they subscribe to are, cable, satellite, and fiber TV subscribers are less likely to say that their TV service is worth it compared to most over-the-top services.

Seventy percent of satellite and fiber subscribers and 62% of cable subscribers said their service is worth it; between 8% and 13% said their pay-TV is not worth it. On the other hand, 91% of respondents with Netflix said the service is worth the money; 83% among Hulu subs.

Digital pay-TV providers Sling TV and Hulu with Live TV also fare better than traditional pay-TV, with 79% of Sling subs and 77% of Hulu with Live TV subs voicing their approval.

In addition to exploring the value of TV and video services, the study also asked how interested TV viewers would be in either switching to a service like this from their cable/satellite/fiber service (if they currently had pay-TV service) or subscribing to one (if they did not currently have pay-TV service).

Nearly half (48%) of pay-TV subs expressed interest in online TV; which rose to 58% among 18-34 year-olds. While the data is based on a broad, general description of online TV and may not translate into actual cord-cutting, it does indicate a willingness among consumers to explore these services, and cost plays a major role.

Nearly 93% of respondents interested in online TV cited lower cost as a key factor. In addition, viewing and tech features among OTT services remains highly valued and, in many cases, more user-friendly than many linear TV set-top box guides.

“Over-the-top services like Netflix, Hulu, and Amazon Prime are … essentially VOD ‘on steroids,’ and they have tended to supplement, rather than cannibalize, services offered by traditional providers,” Adriana Waterston, SVP of insights & strategy for Horowitz, said in a statement.

“[Online TV does] compete directly with traditional providers by offering television, including sports and local channels in many markets, DVR service, and other elements of traditional TV, but for a lower price and with the app-driven, consumer-friendly OTT experience. It is incumbent on traditional players to continue to assert their value proposition at the same time as they pivot their businesses to serve consumers’ evolving expectations.”