Posts for 'Aggregators'

Please save the dates for VideoNuze’s inaugural Connected TV Advertising PREVIEW: 2022 (virtual event) on the afternoons of January 26th and 27th.

Connected TV advertising is white hot. eMarketer recently raised its forecast for 2021 to $14.5 billion in the U.S. alone, up 60% from last year. And it is projecting CTV ad spending to double, to $29.5 billion by 2024. Other forecasters are even more optimistic about CTV’s future. CTV and streaming are the top priorities for every media and technology company today.

Core to everyone’s optimism is CTV’s ability to bring together the best of TV advertising (sight, sound and motion) with the best of digital advertising (targeting, optimization, attribution), making it an unprecedented medium for marketers to achieve their diverse goals. In particular, CTV’s digital attributes will allow CTV to evolve to more of a lower funnel / full funnel medium, unlocking ad spending from performance-oriented marketers seeking specific outcomes.

To help set the stage for the opportunities ahead and the challenges that remain, I’m pleased to present VideoNuze’s inaugural Connected TV Advertising PREVIEW: 2022 (virtual event) on January 26th and 27th. PREVIEW: 2022 will be the first event of its kind in the industry - 100% focused on senior industry executives sharing their key CTV priorities for the coming year. These are the executives and companies who are driving and shaping the industry today, through their strategic plans, investment decisions and innovation priorities (typical VideoNuze events feature 30-40 executive speakers).

As always, the program will be highly curated, with a mix of one-on-one interviews, panel discussions, research presentations and case studies, providing an immersive learning experience for attendees. PREVIEW: 2022’s virtual format means attendees can view any/all of the sessions from the convenience and comfort of their offices or homes without concern for Covid, Omicron or any other variant that may arise. PREVIEW: 2022 is the fourth virtual event VideoNuze has hosted since the beginning of Covid (following 12+ years of hosting in-person events) and the feedback has been uniformly positive. For anyone with a stake in CTV advertising’s future, PREVIEW: 2022 will be a must-attend event.

The CTV Advertising PREVIEW: 2022 web site, including registration, will be activated shortly and I’ll share many more details in the coming weeks, including the first group of sponsors.

Looking further ahead into the new year, in June, 2022 VideoNuze will once again present our flagship Connected TV Advertising Summit (session videos from the 2021 edition are here and here), and in November 2022, the second version of the Connected TV Brand Suitability Summit (session videos from the 2021 edition are here).

I’m really excited about what’s shaping up to be a busy year for VideoNuze of industry education, thought-leadership and networking about CTV advertising - its enormous potential and key challenges still to be surmounted.

If you’re interested in learning about sponsorship or speaking opportunities please contact me.

“There’s something happening here,
But what it is ain’t exactly clear…”
-Buffalo Springfield, “For What It’s Worth,” 1967

Late yesterday, Alphabet released its Q2 ’21 earnings. Included was the single snippet of financial information for YouTube that Alphabet began reporting a couple of years ago: “YouTube ads,” which represents YouTube’s global advertising revenue (non-ad revenue such as YouTube TV and YouTube Music subscriptions, etc. are not included). YouTube’s ad revenue for Q2 ’21 was $7.002 billion, which was 84% higher than the $3.81 billion Covid-affected Q2 ’20 ad revenue, and 94% higher than the $3.60 billion pre-Covid Q2 ’19 ad revenue.

Yes, Covid dampened Q2 '20 ad revenue, as management had previously said. But still, you read those numbers right. An 84% year-over-year increase. On a very large prior number.

Consider a little comparative context for YouTube's $7 billion quarter: YouTube’s ad business alone is nearly the size of Netflix’s entire global subscription business, which generated $7.34 billion in revenue in Q2 ’21. But two years ago, Netflix’s Q2 ’19 revenue was $4.92 billion, which means over the past 2 years, Netflix has increased its second quarter revenue by $2.42 billion, or 49%.

YouTube has increased its ads revenue alone by nearly $3.4 billion, or 42% more than Netflix. Since Alphabet does not disclose YouTube’s specific expenses, it is impossible to calculate its profitability. But because virtually all of YouTube’s content comes from third party creators while Netflix’s annual content tab is approaching $20 billion, suffice it to say YouTube’s ad business is far more profitable than Netflix’s subscription business. It is also fair to project that in Q3 ’21 YouTube’s ad revenue will exceed Netflix’s subscription revenue.

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YouTube is used by 81% of U.S. adults, according to Pew Research Center’s new Social Media Use in 2021 survey. That’s up 8 percentage points from the 73% YouTube usage rate that Pew found in 2019. Among all the other social platforms Pew polled, only Reddit experienced a statistically significant increase in usage from 2019 to 2021, up from 11% to 18%. Facebook is the second-most popular, with 69% usage; all others are below 50%.

YouTube’s dominance over other social platforms spans gender, race, age, income, education and geography. Pew’s data highlights why YouTube has become so attractive to advertisers. For example, YouTube is used by 95% of 18-29 year-olds and 91% of 30-49 year-olds, compared to Facebook’s 70% and 77% respectively. It is used by 90% of those with incomes of $75,000 or higher, compared with Facebook’s 70%. And YouTube is used by 89% of college grads or above, vs. Facebook’s 70%. The only category where other social platforms come a reasonably close second to YouTube is among 18-49 year-olds where Instagram and Snapchat have 71% and 65% usage rates respectively.

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YouTube advertising revenue grew to $6.9 billion in Q4 ’20, up 46% from $4.7 billion in Q4 ’19. YouTube’s results were reported as part of parent company Alphabet’s Q4 ’20 and full year 2020 earnings released yesterday. YouTube’s ad revenue accounted for 15% of Google’s total ad revenue of $46.2 billion in Q4 ’20, up from 12.4% of Google’s total ad revenue of n Q4 ’19.

Critical to YouTube’s ad growth is the macro trend of reduced linear TV viewing, especially among younger audiences. This makes it harder than ever for brands to reach these viewers, a tailwind that is helping all ad-supported streaming services.

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I’m pleased to present the 500th(!) edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.

On today’s podcast, Colin is still mopping up his tears from the 49ers’ heartbreaker last Sunday night, but is being a good sport about the loss. He quickly recaps the game’s streaming audience and shares his insights.

This week’s main topics are Disney+ and YouTube. Coincidentally, this week we all got a first look at both of their performances, in Disney’s and Alphabet’s earnings reports, respectively. The headline from Disney+ was clearly the 28.6 million subscribers reported after just 84 days after launching - a noteworthy accomplishment by any standard. We discuss how sticky those subs are (i.e. what will the churn rate be?) and what Disney+ will need to do from here to keep up momentum.

Then we shift to YouTube; we’re both a little surprised that YouTube TV only has 2 million subscribers given how much advertising around marquee sports it has done (by comparison, Hulu Live had 3.2 million at the end of 2019). Nevertheless we are both quite bullish about YouTube going forward, particularly if Google decides to hold off price increases for some time and cord-cutting continues to accelerate. I believe the company as a whole could crack $25 billion in revenue in 2020.

(Apologies - Colin’s audio quality isn’t very good this week, we’re working to fix for future podcasts.)
 
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Finally, finally, finally, Google provided some transparency about YouTube’s financial condition, in its Q4 ’19 and full year 2019 earnings report yesterday. YouTube’s financials have been treated as a state secret by Google since the beginning of time, with only high level usage information periodically shared.

Even yesterday’s reveal was only for YT’s advertising revenue, which came in at $4.7 billion for Q4 ’19 and $15.1 billion for the year. YT’s subscription revenues - which consist of YT Music, YT Premium includes YT Music) and YT TV (its virtual pay-TV service) - were buried in “Google other revenue.” On the earnings call, CEO Sundar Pichai said all YT subscriptions had a $3 billion annual run rate at the end of 2019.  

Using some conservative assumptions and relatively quick math, it’s clear that YT’s total revenue could exceed $25 billion in 2020. As I also detail below, YT has to be considered among the best acquisitions in corporate America’s history. For Google, only the acquisition of Android (for the measly price of $50 million) could be considered more successful.

Here are my calculations:

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I’m pleased to present the 470th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.

This week we start with Colin sharing his views on CuriosityStream’s market opportunity. Colin had several takeaways after listening to a podcast with company founder John Hendricks describing the addressable universe streaming is creating and how CuriosityStream is capitalizing. We also discuss challenges CuriosityStream and other DTC streaming services face.

Speaking of challenges, we then shift to focus on YouTube’s latest policies meant to combat hate and conspiracy speech, plus predatory behavior towards kids on its platform. Colin and I agree YouTube is engaged in an ongoing game of whack-a-mole trying to control what content runs on its platform, while also trying to respect freedom of speech. It’s an extremely hard balance to achieve. Now regulators around the world are stepping up their pressure to address the situation.

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I’m pleased to present the 454th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.

Colin’s site published a provocative piece this week focused on whether YouTube is doing as much as it should for its vast network of content creators. In our first segment this week we debate this question. Colin asserts YouTube isn’t, while I counter it’s likely doing as much as it feels it needs to, and especially focuses on its biggest creators. We do agree that with YouTube’s audience still growing and advertisers returning, the question may be moot anyway.

We then dig into this week’s deal by Brightcove to acquire Ooyala’s OVP business, joining two traditional competitors. For me the deal illustrates the rising bar video platforms must meet for both publishers and users, driven by in-house technology found in Netflix, Hulu, Amazon, YouTube and others and the need for greater scale. From a strictly financial standpoint, Brightcove’s move seems savvy and opportunistic.

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Another sign of connected TVs’ ascendance: in a blog post on Friday, YouTube CEO Susan Wojcicki said that its users are now watching an average of over 180 million hours of YouTube video per day on TV screens. To put that in perspective, given the 1.9 billion logged-in users YouTube says it has per month, it would mean an average of almost 11 minutes per day per user watching YouTube on TV.

No doubt that’s far less that the average Netflix, Hulu or Amazon Prime Video subscriber spends watching those services on TV. And it also pales in comparison to the over 50% of YouTube consumption on mobile devices the company has touted for several years now.

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Comcast announced this morning that YouTube has been launched on its X1 set-top boxes, further supporting Comcast’s strategy of becoming an “aggregator of aggregators.” Comcast integrated Netflix into X1 last November, the first major milestone of wrapping popular online video services into X1, which vastly simplifies viewers’ experiences.

Billions of YouTube videos will now be available to X1 subscribers, equally accessible as Comcast’s own live, on-demand and DVR programming as well as online sources like Netflix. YouTube video will also be filtered into the Xfinity On Demand menu, and be available via the X1 voice remote. X1 users can search YouTube by voice or text by topic (beauty, cooking, music, etc.), by specific names of talent, shows and by live-streams.

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Recode reported a couple days ago that Apple is potentially looking to sell online subscriptions to HBO, Showtime and Starz in a single bundle to subscribers. Since Apple has made so little progress in video compared to its peers, a bundling move like this could give it a boost. But if I were handicapping which company is much more likely to sell HBO, Showtime and Starz in a discounted bundle - and succeed with it - I’d put my money on Amazon far sooner than Apple.

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A bit lost amid last week’s blizzard of news (e.g. AT&T-Time Warner deal, Google Fiber pausing, Vessel being sold and closed, Vine shutting down) was that Google’s strong Q3 results included yet another positive report on how well YouTube is doing. Senior Alphabet/Google executives have been touting YouTube’s progress for a while now, and last week’s earnings and call continued the streak.

Of course, Google doesn’t break out YouTube’s individual results, so it’s impossible to know exactly what its financials look like. However, some analysts have estimated YouTube’s annual revenue at approximately $10 billion per year, which would translate to 10%-15% of Google’s revenue.

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Yesterday I had the pleasure of moderating a super session at INTX 2016, the cable TV industry’s annual trade show. The title was “Is Content Really King? Understanding the Value of Platforms in a Crowded Video Space.” The session included Steve Shannon (GM, Content and Services, Roku), Evan Shapiro (EVP, Digital Enterprises, NBCU) and Matt Strauss (EVP/GM, Video Services, Comcast Cable).

It’s no secret that there’s more great video to watch now than ever. That’s created challenges for viewers to find what they want and for content providers to fully monetize their ever-growing production investments. That’s why the role of platforms is increasing in importance.

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When Amazon Video Direct (AVD) was announced last week, lots of industry observers saw it as a new YouTube competitor. At some point that may be true, but for now, there is little for YouTube, the undisputed 800-pound gorilla of the online video industry, to be worried about.

While video content providers will welcome another deep-pocketed third-party distributor into the market, the most important challenge AVD faces is proving that it can make incremental money for these providers, beyond what they can already earn on YouTube, their own direct channels/apps and elsewhere.

Amazon revealed 4 different ways that content providers can monetize their videos, but each has challenges.

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Google’s parent Alphabet reported strong Q4 ’15 earnings late yesterday, with $21.4 billion in revenue (up 18% vs. Q4 ’14) and operating income of $5.4 billion (up 22% vs. Q4 ’14). On the earnings call, Alphabet CFO Ruth Porat and Google CEO Sundar Pichai repeatedly cited YouTube as one of the key contributors to the company’s very successful quarter.

But as usual, there were few specifics of YouTube’s actual financial performance disclosed, with Porat only saying “YouTube revenue continues to grow at a very significant rate” primarily due to the TrueView skippable ad unit.

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I'm pleased to present the 298th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

T-Mobile announced something breakthrough earlier this week, with its new “Binge On” program that allows its subscribers to watch unlimited video from 24 different providers without it counting against their data plans. Granted video quality will be a modest 480p or better, but the significance here is that T-Mobile is enabling long-form viewing out of the home, without needing to hunt down a good WiFi connection or risk massive data plan overage charges.

Over 2 years ago, I questioned whether optimistic forecasts for mobile video consumption were realistic given expensive data plans. In fact, research has shown that most “mobile” video viewing actually occurs in the home. But with T-Mobile’s Binge On, it will be fascinating to see if other wireless carriers are compelled to do something similar, which would be a huge boon to video providers. Colin and I discuss the ramifications.

We then turn our attention to SVOD licensing, which is all over the board. Last week, Time Warner said it was going to pull back on SVOD licensing, but earlier this week AMC said it will continue to pursue a one year window. Meanwhile, Time Warner is now rumored to be investing in Hulu, in a deal that would include a content commitment. TV networks and studios are clearly caught between the short term appeal of SVOD revenue vs. the long term concern that it undermines the ecosystem. We dig into the issues.

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I'm pleased to present the 296th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

This week we discuss our first impressions of YouTube Red, and then turn to Q3 earnings reports from top cable operators, which are defying cord-cutting.

For YouTube Red, Colin and I agree that the service’s primary value proposition of ad-free viewing is diminished by the fact that the ad experience on YouTube is already quite viewer-friendly and non-intrusive (as I wrote last week and yesterday). Further, the download feature, which could be quite appealing, is underwhelming on iOS, though it’s slightly better in Android. Net, net, neither of us sees much upside for YouTube Red, at least for now.

We then turn our attention to Q3 earnings from 3 big cable operators, Comcast, Time Warner Cable and Charter. Each has reported very strong video subscriber results, bucking the cord-cutting paranoia. Colin notes that for Comcast, broadband profit contribution actually exceeded video’s profit contribution. I see the combination of cable’s robust broadband and hybrid set-top boxes like X1 as the key to ongoing success.

Listen now to learn more!

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YouTube Red was announced last week and became available yesterday. After taking it for a spin on my iPad (note, access for subscribers is included in the YouTube app), I’m pretty convinced that the current offering is unlikely to gain any significant traction. To be fair, there are more benefits coming to YouTube Red in the near future, but even with those, the service is unlikely to appeal to more than a small number of YouTube users.

YouTube promoted the primary feature of YouTube Red as ad-free viewing. For sure, watching YouTube without ads is an improved experience, but as I wrote last week, because YouTube’s skippable TrueView ads are already so viewer-friendly, the marginal improvement from not having to click “Skip Ad” doesn’t end up feeling like a big breakthrough, especially for viewers used to YouTube being free.

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What’s a viewer’s willingness to pay in order to have an ad-free video experience? The question is in focus yet again with yesterday’s announcement of YouTube Red, the company’s long-rumored $9.99/month ad-free service. Unfortunately for YouTube Red, in its case, willingness to pay is going to be heavily influenced by the fact that YouTube has arguably the most viewer (and advertiser) friendly video ad model, which will undoubtedly impact interest in paying for YouTube Red.

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