NAB Show Streaming Summit: Industry Could Use a Reality Check

LAS VEGAS — NAB Streaming Summit chair Dan Rayburn delivered a sharp rebuke to streaming media executives April 14, urging them to focus on financial and economic matters and taking aim at the lack of accurate information around viewership numbers and the hype about free ad-supported streaming TV (FAST).

The economy has thrown streamers into a bit of a tizzy, with investment hampered by an inability to get credit and expected interest rate cuts not materializing, at least not yet, he said. As a result, the industry is going through a protracted cash crunch, which has led to layoffs and talk of mergers.

“The most important thing is we have to be realistic about what’s going on in the market,” Rayburn said. “The balance sheet drives our industry. If you think it’s anything else, sorry, but you’re wrong.  So everyone has been resetting the bar over the last 18 months. Getting to free cash flow — that’s the initial goal. Getting to profitability, that’s the second goal. Free cash flow and profitability are not the same thing. Getting to free cash flow is key; profitability, that’s like the gold standard. That’s why we’ve seen so many layoffs over the last 18 months — and we’re still going to go through this for the rest of the year.”

Because of the tight credit market and a series of delays in expected interest rate cuts, he said, growth constraints will remain at least through the end of 2024, or “until money starts flowing again, and that impacts all of us.”

On the positive side, Rayburn contends, media companies have become more focused with their products and services, their go-to-market approach, content bundling and cost cuts.

“We’ve already seen a lot of vendors, in particular, refocus who they are and what they do,” he said. “Focus is key. We’ve gotten through the toughest point, so when we have interest rates come down again, when companies start getting money again, companies will start growing again.”

Rayburn took issue with what he considers a record amount of disinformation about revenue, subscribers and viewers, which is frequently spread and amplified through social media. He called out an eMarketer report that claimed Hulu+Live TV had 11.4 million subscribers, even though Disney itself says the total is more like 4.6 million, as well as news reports that erroneously said Netflix’s ad-supported tier reaches 23 million subscribers rather than users, which he says is a big difference.

“This is happening every single day in our industry,” he said. “People share information without checking the source, and then reshare it with others. It’s incredible how often this happens.”

When Peacock reported that its live stream of an NFL Wild Card game was the biggest live-streamed event in U.S. history, Rayburn said, an analyst “purposely removed the word U.S. Why? So now they can make a big issue of it on LinkedIn.” And Nielsen, the big research house, has yet to disclose how exactly it defines a viewer.

Rayburn also called for a reality check in regard to FAST.

“There’s far too much FAST hype out there,” he said. “FAST growth, FAST this, FAST that. Popularity without productivity is not a business model. There are companies that can make an investment in FAST and wait for it to payoff 10 years from now, but how many companies can do that? Google, Apple, Microsoft — it’s only a handful.

“Vizio is the only company that gives out any information about the amount of advertising revenue it gets from its FAST channels. It’s right there in its regulatory reports. There isn’t any other company that provides any financial information about FAST — not Pluto, not Xumo, not Tubi.  Every once in a while you get a cryptic, ‘We will get profitable by the end of the year, probably.’

“‘FAST is growing.’ Thanks, we know that. ‘There’s a lot of channels.’ Yeah, we know that. ‘There’s content overload.’ Yes, we know that, too. So where is FAST actually making money? No one will say. No one’s talking about it.”

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Streaming to Once Again Take Center Stage at April 13-17 NAB Show in Las Vegas

The National Association of Broadcasters is once again spotlighting streaming at this year’s NAB Show in Las Vegas, which runs April 13 through 17 at the Las Vegas Convention Center.

More than 260 of the show’s nearly 1,300 exhibitors consider themselves part of the streaming spectrum, according to a keyword search, while the show’s conference program includes almost 40 sessions devoted to streaming.  

Most of them will be part of the third annual Streaming Summit, produced by Dan Rayburn, who is considered one of the leading authorities, speakers, and writers on streaming media technology, content, and business models.

The Streaming Summit will be held April 15 and 16 from 9 a.m. to 5 p.m. in Rooms 106 and 107 in the convention center’s West Hall.

“It’s crucial to separate hype from reality, and it’s vital to keep up with tools that can make the tech stack more efficient, offer better personalization and help deliver a better user experience with fewer bits,” Rayburn told Media Play News. “Streaming Summit is the OTT event of the year because it brings into one room the major platforms, tech providers and content creators. We have the top names in the space sharing actionable information on how to deliver quality streams at scale, reduce churn and maximize revenue opportunities.”

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This year’s Streaming Summit, as always, kicks off with a welcome from conference chair Rayburn, who will present some of the latest numbers related to profitability, subscriber growth, and viewership. According to the presentation preview, he also will discuss “the turmoil in the video business around content licensing, bundling, cord-cutting, rising costs, and churn and retention within OTT services. Hear where he sees an opportunity for growth and consolidation in the industry, the key financial metrics everyone should be tracking and who the winners and losers will be across the broadcast, pay TV, MVPD and OTT markets.”

The welcome will be followed by a half-hour “fireside chat” with Phil Wiser, EVP, CTO, and Head of Multiplatform Operations for Paramount Global, focused on the opportunities and challenges presented by AI.

Other conference highlights include “The Business of FAST: Ad Dollars, Viewer Measurement and Content Saturation,” which takes a look at the present state, and future, of free ad-supported streaming TV; “Combating Churn with Better Packaging and Distribution Strategies,” which will focus on what consumers want from OTT services and the impact of their choices on OTT business models; and “FAST, AVOD and SVOD, Defining the New Pay TV Bundle,” which takes a look ahead at the next generation of streamers as server their offerings with multiple tiers and differing price points, combine advertising with subscriptions, and develop innovative new packages and bundles.

Several other Streaming Summit sessions will focus on live sports streaming, which has lately been generation lots of buzz in the streaming world. Day two (April 16) begins with another 9 a.m. Rayburn welcome in which he will detail facts, figures and news tied to the sports streaming market, including the latest live event viewership numbers, his thoughts on the upcoming JV service between Disney, Fox and WBD, and his thoughts on why rising content licensing costs and platform fragmentation is the key reason why pay TV still accounts for around 85% of total viewing hours for live sports. Live Sports Streaming: Where Content Rights and Streaming Technology Collide (April 15, 4-5 p.m.) will have panelists discussing how OTT platforms are optimizing their sports licensing bundles and technology stacks to maximize engagement, create revenue predictability, increase customer lifetime value, and mitigate rights costs.

Other live sports sessions include “Sports Streaming’s Place in Fan Engagement and Monetization,” “Live Sports Streaming: Where Content Rights and Streaming Technology Collide,” and two case studies, “How The NFL Delivers a Great Video Experience” and “NBCU and AWS: A Deep Dive Into the Tech Behind Peacock’s Record-Breaking NFL Wild Card Exclusive.”

The Streaming Summit debuted at the April 2018 NAB Show as a one-day event. 

Unlike last year, there will not be a dedicated OTT section of the show floor, according to an NAB spokesperson, with streaming exhibitors now integrated across the exhibit hall.

The Three Phases of Growing a Global DTC Sports Streaming Service

Today, sports streaming services should be racing to go direct-to-consumer (DTC). It’s the future. Companies opting not to prioritize a DTC approach remain many laps behind in optimizing their fan experiences.

Rick Allen

A DTC sports streaming service complements linear broadcast deals. Linear partners don’t broadcast every live event. And they can allow the content owner to re-air a game after a hold-back period (typically 24 hours). DTC has solidified itself as the perfect solution to securing the broadest possible distribution across sports streaming markets.

Streaming services, particularly DTC, offer companies a better understanding of fan behavior and needs. While live events drive viewership, shoulder programming on OTT solutions — such as those powered by ViewLift or a service like ESPN+ — extend engagement and create new fans. Much of this comes down to real-time data, which remains a principal value content owners gain from live-streaming.

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At this year’s NAB Streaming Summit, I moderated a panel of industry experts, including Fabio Gallo from LaLiga Tech, Riccardo Quaglia from the Italian Basketball League (LNP) and Andy Wasef from the National Basketball Association (NBA), and discussed the benefits of using data to enhance DTC streaming. We agreed that growing a DTC sports streaming service requires companies to complete three critical phases:

  • Phase 1: Start ramping up live content to build viewership and consumption.
  • Phase 2: After attracting viewers with live content, capture audience data to understand their consumption habits and develop a 360-degree view of the fans.
  • Phase 3: Once streaming services mature, leverage the data to define and understand consumption, churn behavior and marketing behavior on a granular level.

 

Sports streaming services must adhere to these three phases because data ultimately makes or breaks these companies.

Phase one

Live-streaming sports over-the-top has advantages for attracting and retaining customers. These tools help expand fan bases globally.

Collecting the correct data, making it available in real-time and maintaining reliability while scaling, will be invaluable to content companies.

More people globally are consuming live content. In fact, 63% of millennials watch live-streamed content regularly. According to Tech Jury, the live-streaming industry will reach $184.27 billion by 2027. Parks Associates finds that 78% of those who subscribe to an OTT sports service watch live-streamed content, versus 25% who don’t subscribe to an OTT sports service.

Live content provides significant opportunities to collect data over time; the more live games or matches carried by streaming services, the more precise the learnings that can be gleaned from the data. Examined monthly, fan viewership and engagement data sharpen how a service presents content (personalizes) and can help determine what kinds of content and styles of approach will serve the broadest audience.

Phase two

Data has the power to explain everything. Obtaining data is just the first step, however. What streaming services do with that data — how they structure, use and interpret it — is the critical component of phase two.
According to The Future of Sports Broadcasting: Enhancing Digital Fan Engagement report, 25% of sports customers expect a customized OTT viewing experience. Capturing and properly using data enhances personalization and the fan experience. Personalization allows fans to find their favorite teams easily, favorite players and the kinds of content they want. Sports streaming companies typically target customer experiences by:

  • Generating content and marketing recommendations tailored to the audience’s interests based on viewer data.
  • Leveraging data with AI algorithms and frameworks to create advanced customer experience personalization.
  • Using automation to streamline the customer experience through personalized user interfaces.

 

For example, LaLiga’s customer analytics tool collects all the data inside one unique “data lake.” With this data lake, they can profile the data and receive a complete 360-degree view of each fan. The data should translate into creating great content, live games and personalized experiences for the fan.

Phase three

Real-time second-by-second data on viewer consumption becomes crucial in understanding audience behavior. One key piece of data focuses on if — and when — viewers turn the game off. This data informs decisions about what audiences prioritize and what holds their interest. Data on viewer consumption answers questions like:

  • What supporting content do the fans want during live games?
  • What content lengthens viewing sessions?
  • Do fans want more content focused on players, coaches or owners during or between games (feature stories, interviews)?

 

Player performance data attracts audiences as well. Large B2B businesses, like SportRadar and Genius, thrive on the entertainment value and utility of performance data. AWS’s Next Gen Stats — a leader in performance data — provides sports fans with relevant data to interpret what’s happening in the game. The platform also predicts what will happen next based on AI and many data sets. This information is the lubricant for fantasy and free-to play games and what guides many professional (and weekend) gamblers in their sports betting approaches.

Content companies need streaming partners that collect the correct data, make it available in real-time, maintain reliability while scaling and help optimize the mix of monetization models.

Data-driven companies are the future

Sports leagues with a DTC model have evolved into data-driven companies. Linear deals may provide the single largest revenue source for sports leagues and media companies, but that structure inserts the media partner between leagues and their general fan base. Adding a DTC service to the distribution mix mines fans themselves, with personalized content. Providing added value to subscribers remains a focus for many leagues.

While hundreds of streaming subscriptions exist today, those tapping into niche consumers will see more success as they use personalized data to understand, anticipate and satisfy fans’ desires.

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Sports data — particularly viewer behavior — offers an enormous asset for leagues. But diligence throughout the collection and analysis process remains critical. Collecting data begins with selecting the right technology partner.

Streaming services should start with a deep dive into the viewer information collected by their partner’s platform. Ask questions. Is viewer information accessible in real-time? What kind of assistance does the platform provide to our analysts?

It’s time for sports streaming services to treat tech partners as their pit crew with the knowledge and power to drive their OTT service into the winner’s circle.

Rick Allen is the cofounder of ViewLift. He has been in the video and streaming industry for over 30 years. He has led some of the biggest media companies, including stints as CEO of Sporting News; CEO of National Geographic Ventures, with responsibility for 10 business units including TV/Film and Digital; and SVP of Discovery. He also served in the Clinton White House. Allen has authored two best-selling books on Robert Kennedy and produced three award-winning films.