June Ten

This is your midweek Fix, going deeper on our core topics. This week newTV, next week Merchants and we will alternate. We will get this onto a separate database so people can opt out of this if they want - but if you unsubscribe now you lose Fix Friday too. Would love your thoughts on how we make this better  - hit reply.

$Millions in motion. 
 
A new Goldman Sachs report show the move of money from TV to digital will accelerate
 
“Overall, we expect the crisis will only accelerate the secular shift in advertising budgets towards digital, while potentially also leading to more attempts by the EU broadcasters to seek further partnerships and M&A (mergers and acquisitions) to share costs and build scale.
 
A new Comscore study looks at how UK marketers are adjusting to the new world - and shows how budgets are shifting from linear to newTV. 
 
Access
 
The rapid growth of streaming services is exposing the Byzantine structure of the industry. Getting the service you want is often overly complicated - best evidenced by the ongoing squabble between Amazon and HBO Max. Amazon Prime customers can get HBO as an extra in their bundle - but not the new HBO Max. 
 
This issue is covered more here and we do see people trying to solve it - VUniverse and Paket are the latest. But you can only aggregate if people allow you and Amazon, Roku and Apple all see good business in maintaining their role as a gateway.
 
Google want to play here too and their new version of Chromecast could help
 
Finding what you want also goes deeper - what's the right combination of services - or Apps - that let me see the shows I want to watch? Bloomberg are the latest to offer their help here. 

And then there is the issue of paying for all these options. A VC has a good analysis of Apple TV deducing that they will hit c50m active subscribers by year end. But only 5m will be paid, as most get the service free through buying an Apple product. They predict a healthy future, based on a model that presumes half of these users upgrade to paying. Really?
 
A US survey from Park shows Apple to be doing well - but that many Apple and Disney subscribers have dropped other OTT services. They are not huge numbers but given many (most?) Apple and Disney subscribers are on free or discounted packages, what happens when they go full price?

With other research showing one in 7 households are borrowing a login, this whole space seems vulnerable and the viability of some of these services has to be in question when unemployment is poised to hit record levels.
 
Ads
 
Ads are clearly part of the answer. HBO Max will launch an ad funded model next year and the head of their parent company AT&T gave his view;
 
“We believe the long term dynamics will be both subscription and advertising supported. If you think about what consumers like, they like choice,” “You don’t necessarily mind ads, if they’re executed well and they’re relevant.”
 
The upfronts have shown that ads are not necessarily the silver bullet - advertisers are looking to pay less this year and lots more inventory may not be matched with more demand. But new types of inventory may prove interesting. Disney replaced their usual New York New Front extravaganza with a video and emphasised the changes that Hulu and ESPN offer. With their unified advanced advertising product suite Luminate now available on Hulu too and Samba adding measurement expertise this sounds promising - we will learn more when Hulu joining the virtual Upfronts next week
 
CTV / OTT / newTV - defining the opportunity
 
The new Comscore study we mentioned at the start shows that many marketers take a narrow view of Connected TV - only considering viewing on the TV set - whilst just over a third favour any video ad consumed via OTT (Over The Top) devices. That’s my take on newTV
 
The definition of streaming is important as it does influence decisions on budget. In a good piece on YouTube ambitions to take money from TV we see this;
 
Many marketers still treat YouTube as a mobile and desktop video-viewing platform—and not a streaming TV service in the vein of Walt Disney Co. ’s Hulu or ViacomCBS Inc.’s Pluto TV—because that is how most people still watch it.
 
I think this device question is really significant. Especially as we are in lockdown. I suspect mobile use for older groups is reduced as lockdown means the big TV and the laptop are always to hand.  For the young though, the mobile is their personal screen - away from their parents. So - I think - mobile services aimed young like TikTok and Snap do really well and those aimed older (Quibi?) suffer. I’m looking for data to validate this.
 
AdTech
 
The fight in newTV extends to the tech used to automate the buys - both Roku and Amazon have strong DSPs - with advantages in both inventory and data - so brands really need both. 
 
Roku’s DSP is already able to buy ads on other platforms by plugging into different programmatic marketplaces and setting up deals with publishers to make them available to OneView. Considering the growing Facebook-Google dynamic between Roku and Amazon, agency executives expect that Amazon will try to access more off-platform CTV inventory for its DSP. 
 
It’s clear Amazon is lining up access to more inventory. A core part of their deals to enable Amazon Prime customers access to streaming devices, is that Amazon gets inventory to sell. So the refusal by HBO / AT&T to play ball is behind the absence of Max from the Amazon platform.
 
Social
 
As Andrew Chen from A16Z tweeted;
 
There is so much happening in video right now - and that category has turned out to be much richer and deeper than prev thought. Clips, Stories, films, GIFs, lipsynching/dancing, etc are all “video” but also their own thing. Each has built big audiences.
 
Interactive too!
 
He was talking about their investment in Whatifi - a new mobile interactive movie app. The very positive review cheekily compares it with Quibi. 
 
Live
 
Bloomberg estimates live online shopping in China to be worth $60bn and it’s most successful star is Viya - she (recently) hit a record-high audience of more than 37 million—more than the “Game of Thrones” finale, the Oscars or “Sunday Night Football.”
 
Alibabas’ Taobao is fighting back with a virtual star for their 618 shopping event - Hatsune Miku, a popular virtual idol and singer from Japan
 
No surprise that TikTok see this potential - they plan to have more live video. A new feature for creators from YouTube will let them see when a fan buys merchandise from partner store TeeSpring in their live chat. And already over 2 million people have bought stickers on YouTube.
 
New research suggests the young are spending almost as much time with Tiktok as they do with YouTube. Kids ages four to 15 now spend an average of 85 minutes per day watching YouTube videos, compared with 80 minutes per day spent on TikTok
 
This question about TikTok with Snap CEO Evan Spiegel is worth revisiting - he talks around this Pyramid