In this blog I am going to go over the three major themes that are influencing the rise of Multiscreen Video Advertising. In an earlier blog I had outlined the four phases in evolution for Multiscreen Video Advertising MultiScreenAdvertising Evolution - Retransmission, Replacement, Addressability and finally Coordinated ads
The three themes are:
Proliferation of Devices
This in an obvious trend. Video content is increasingly viewed not just on the large TV at home but also on the web, mobile phone and tablet device.This has been true for free content for ages via YouTube (ok maybe not ages as some of the devices have not existed for too long but at least on the web) . The big change has been that premium content has now arrived to all the non TV devices. Not because it was always the plan (it was not) but the consumer demands it. TV Everywhere has been the rage for the last two years at most trade shows and that it now translating to reality. Of course there are also major competitive drivers due to the consumer demand. Basically if content distributors don't move to satisfy the consumer demand then the host of increasing new content distributors (think Netflix, Apple itunes etc) are happy to provide the content to the consumers.
Interesting side note. I recently realized that the 4 of the Top 4 STB providers in the US are now up for sale based on publicly available information (I re-tweeted this info in case you are interested @aseembakshi). I am sure that there is much more to this trend but it has to be interlinked with the proliferation of end devices that the consumer has available to them.(Maybe a future blog but was trying to focus on advertising and technology!! Or maybe a guest blog...comment back if interested in reading on this topic).
Anyway as a result of availability of content on multiple devices a few factors emerge:
1. Reinforcement of Convergence of Content types - Catchup TV in particular is benefiting from this trend
2. Viewership of content continues to increase
3. Internet rules rule. Basically everything on the internet is free..... well nothing's free but it means that subscription models are not going to be the holy grail but instead advertising will be what pays the bills.
4. Content everywhere is an almost reality. There was a report that 55 entities in the US now offer content on multiple devices up from 5 a year ago (I re-tweeted this info @aseembakshi if interested). Why an almost reality? All content is not available everywhere but it can clearly be seen that consumer demand will drive this trend to conclusion. And more and more spin offs of this trend continue (songs from reality shows that you can download from itunes, companion devices)
Convergence of Content Types (Video on Demand, linear, catchup)
In the cable/telco industry Video on Demand is treated as a completely different sub category as compared to linear transmission of TV channels. Starting from ingest of the asset, distribution of content, storage, transmission, and finally the ad insertion systems have typically been different between the Video on demand system and the linear transmission.
However, the differences between linear, catchup and video on demand are beginning to blur. Plus the underlying systems are increasingly able to work in any of three environments.
From an advertising perspective (as mentioned in my VOD blog) the schedule versus dynamic ad insertion difference has been a major difference. However increasingly in the linear space both styles of systems are starting to be used. Schedule based systems still command the lions share of the placements but this will change over time. Particularly with the maturity and adoption of the SCTE 130 standards in the cable/telco space this trend should accelerate.
The other major trend has been on the consumer side. Although live events like sports and the Oscars are still viewed in real time for episodics there is an increasing adoption of viewing content not at air time but later, at the consumer time availability. This pretty much forces the industry to move to a model that monetizes this increasing trend towards catchup TV and will be the largest driver towards a convergence of the systems as the advertisers will look for campaigns that cross the various content types.
Maturing Standards and Adoption (SCTE 130 and IAB/VAST)
In an interesting twist of fate, the overall convergence that is happening between cable/telco video advertising industry and the Internet video advertising industry, driven by customer demand for the availability of content everywhere is being mirrored in the standards that are used by two different industries. Unlike many other industries that converge these standards turn out to be very complementary in nature and will make the convergence far easier, rather than being completely competing standards. Interestingly enough this is not by design as far as I can tell but actually originates from the demands of the industries' players.
I happen to have the good fortune of being associated with both of the industry bodies. In case you are interested here is an excellent primer for SCTE 130 and IAB/VAST as well as blogs on the differences between the two, written by my good friend and colleague Lei Gu.
primer on scte 130 and iab vast
scte-130 vs iab vast part 1
scte-130 vs iab vast part ii
The net result of these standards is that there are integration points between these standards that will allow the direct fulfillment of what consumers are demanding. "Free" (advertising financed) access to premium content across all devices for all content types. Based on these standards much of the evolutionary model for MSV advertising that I spoke about in the first blog can be achieved, particularly for the Replacement phase as well as the Addressability/Targeting phase.( MultScreenAdvertising Evolution )
Conclusion
Video advertising in general is on the rise on the Internet. This has been a traditional source of income in the linear TV space (a $60 Billion dollar industry). Consumer demand is driving the need for premium content availability on all devices (TV and MSV). Standards are in place to achieve ad Replacement and Targeting in the MSVspace to provide new streams of income to both content providers and content distributors.
Of course there are still challenges. These are:
- Proliferation of devices - MSV end points - non TVdevices growth
- Convergence of linear, video on demand and catchupTV
- The maturing of Internet and the Cable/telco advertising standards
Proliferation of Devices
This in an obvious trend. Video content is increasingly viewed not just on the large TV at home but also on the web, mobile phone and tablet device.This has been true for free content for ages via YouTube (ok maybe not ages as some of the devices have not existed for too long but at least on the web) . The big change has been that premium content has now arrived to all the non TV devices. Not because it was always the plan (it was not) but the consumer demands it. TV Everywhere has been the rage for the last two years at most trade shows and that it now translating to reality. Of course there are also major competitive drivers due to the consumer demand. Basically if content distributors don't move to satisfy the consumer demand then the host of increasing new content distributors (think Netflix, Apple itunes etc) are happy to provide the content to the consumers.
Interesting side note. I recently realized that the 4 of the Top 4 STB providers in the US are now up for sale based on publicly available information (I re-tweeted this info in case you are interested @aseembakshi). I am sure that there is much more to this trend but it has to be interlinked with the proliferation of end devices that the consumer has available to them.(Maybe a future blog but was trying to focus on advertising and technology!! Or maybe a guest blog...comment back if interested in reading on this topic).
Anyway as a result of availability of content on multiple devices a few factors emerge:
1. Reinforcement of Convergence of Content types - Catchup TV in particular is benefiting from this trend
2. Viewership of content continues to increase
3. Internet rules rule. Basically everything on the internet is free..... well nothing's free but it means that subscription models are not going to be the holy grail but instead advertising will be what pays the bills.
4. Content everywhere is an almost reality. There was a report that 55 entities in the US now offer content on multiple devices up from 5 a year ago (I re-tweeted this info @aseembakshi if interested). Why an almost reality? All content is not available everywhere but it can clearly be seen that consumer demand will drive this trend to conclusion. And more and more spin offs of this trend continue (songs from reality shows that you can download from itunes, companion devices)
Convergence of Content Types (Video on Demand, linear, catchup)
In the cable/telco industry Video on Demand is treated as a completely different sub category as compared to linear transmission of TV channels. Starting from ingest of the asset, distribution of content, storage, transmission, and finally the ad insertion systems have typically been different between the Video on demand system and the linear transmission.
However, the differences between linear, catchup and video on demand are beginning to blur. Plus the underlying systems are increasingly able to work in any of three environments.
From an advertising perspective (as mentioned in my VOD blog) the schedule versus dynamic ad insertion difference has been a major difference. However increasingly in the linear space both styles of systems are starting to be used. Schedule based systems still command the lions share of the placements but this will change over time. Particularly with the maturity and adoption of the SCTE 130 standards in the cable/telco space this trend should accelerate.
The other major trend has been on the consumer side. Although live events like sports and the Oscars are still viewed in real time for episodics there is an increasing adoption of viewing content not at air time but later, at the consumer time availability. This pretty much forces the industry to move to a model that monetizes this increasing trend towards catchup TV and will be the largest driver towards a convergence of the systems as the advertisers will look for campaigns that cross the various content types.
Maturing Standards and Adoption (SCTE 130 and IAB/VAST)
In an interesting twist of fate, the overall convergence that is happening between cable/telco video advertising industry and the Internet video advertising industry, driven by customer demand for the availability of content everywhere is being mirrored in the standards that are used by two different industries. Unlike many other industries that converge these standards turn out to be very complementary in nature and will make the convergence far easier, rather than being completely competing standards. Interestingly enough this is not by design as far as I can tell but actually originates from the demands of the industries' players.
I happen to have the good fortune of being associated with both of the industry bodies. In case you are interested here is an excellent primer for SCTE 130 and IAB/VAST as well as blogs on the differences between the two, written by my good friend and colleague Lei Gu.
primer on scte 130 and iab vast
scte-130 vs iab vast part 1
scte-130 vs iab vast part ii
The net result of these standards is that there are integration points between these standards that will allow the direct fulfillment of what consumers are demanding. "Free" (advertising financed) access to premium content across all devices for all content types. Based on these standards much of the evolutionary model for MSV advertising that I spoke about in the first blog can be achieved, particularly for the Replacement phase as well as the Addressability/Targeting phase.( MultScreenAdvertising Evolution )
Conclusion
Video advertising in general is on the rise on the Internet. This has been a traditional source of income in the linear TV space (a $60 Billion dollar industry). Consumer demand is driving the need for premium content availability on all devices (TV and MSV). Standards are in place to achieve ad Replacement and Targeting in the MSVspace to provide new streams of income to both content providers and content distributors.
Of course there are still challenges. These are:
- Content access and ad replacement legality.
- Advertising standards, metrics and reporting.
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