VideoNuze Posts

The following video was recorded at VideoNuze’s third annual Connected TV Advertising PREVIEW: 2023 virtual on February 28, 2023.

FASTs – Road to Gold or Road to “SLOW?”
Free ad-supported TV or “FAST” has become one of the buzziest terms in the streaming and CTV industries. Content providers are eagerly launching FAST channels to capitalize on two key trends: advertisers’ insatiable demand for premium CTV ad inventory and viewers’ SVOD fatigue as economic uncertainty escalates. All of this makes FASTs a “road to gold” in the short-term. But in the longer-term, is flooding the market with a lot of free premium programming going to precipitate "SLOW" – “SVOD Losses On the Way?” as viewers are further conditioned to consume free premium video via FASTs and expect ever-better shows to be accessible without payment required?

Beth Anderson – GM, FAST Channels, BBC Studios
Tejas Shah – SVP, Commercial Strategy and Analytics, FilmRise
Josh Sharma – VP of Advertising Partnerships, Allen Media Group
Aneessa Steilen – VP, Media and Distribution Marketing, Vevo
Eric John – VP, Media Center, IAB (moderator)

This week we go on a “field trip” to India, where a battle between multibillionaires - at the intersection of streaming, marquee sports, mobile, commerce and FASTs - provides a glimpse of the future.

First up, we discuss news that Viacom18 Media Pvt. a joint venture between Paramount Global and multibillionaire Mukesh Ambani’s conglomerate Reliance Industries Ltd., the most valuable company in India - which in 2021 won the rights, for $2.7 billion, to stream the hugely popular Indian Premier League (IPL) cricket games - and intends to do so for free to consumers.

Viacom18 Media actually poached the IPL streaming rights from Disney, which had them previously and used the games to drive Disney+ Hotstar subscriptions. Disney's direct-to-consumer strategy remains murky as Colin and I discussed 2 weeks ago.

The move underscores trends that Colin and I have discussed extensively around marquee sports moving from broadcast/cable to streaming (most recently in January, with fuboTV's CEO David Gandler) and the accelerating pace of free ad-supported streaming TV (FAST).

Next, we discuss “miniTV,” a set of freely available video content that is placed front and center within Amazon India’s shopping app. While miniTV, which launched in May, 2021 got off to a modest start, apparently in 2022, its first full year of operations, it has picked up momentum. This is due to the popularity of certain original programming that Amazon has invested in.

Amazon’s strategy of purposely giving away premium video for free parallels what it has done with Prime Video, investing heavily in originals like “The Lord of the Rings: The Rings of Power,” without seeking to directly monetize them. Rather, Amazon uses its massive commerce business to subsidize the cost of content creation, because it has been able to demonstrate to itself that video drives higher levels of Prime acquisition/retention, and Prime members buy more stuff from Amazon, of course.

Jeff Bezos articulated this “flywheel” in an interview with Walt Mossberg at the Code Conference in 2016, putting as fine a point on it as one can imagine, by famously saying “When we win a Golden Globe, it helps us sell more shoes” (start at the 36:56 mark for the segment). Amazon’s approach to subsidizing video is virtually inimitable, except perhaps by Apple and Google, and should justifiably strike terror in the heart of every media company CEO.

In India, with miniTV, we are seeing Amazon run the same playbook, except absent a Prime membership requirement, and with a more specific focus on mobile consumption, primarily by younger viewers. If media company CEOs around the world were not already on high alert from Prime Video, miniTV should put them on an immediate DEFCON 1 footing.

(As a side note, I believe that another flywheel, in CTV advertising, is also developing, as I wrote back in June, 2021. Speakers at next week’s VideoNuze CTV Advertising PREVIEW: 2023 will emphatically drive this home. Note, complimentary sign up is available.)

Last but not least, and at the risk of stating the obvious: Bezos’s net worth currently stands at approximately $120 billion, while Ambani’s is around $84 billion. In short, both of them bring essentially unlimited resources to the streaming game, free to subsidize anything they believe is in their companies’ long-term interests. The stakes in streaming have never been as high and only the deepest-pocketed need apply.

The two initiatives in India are a preview of streaming’s future. As I said, DEFCON 1.

Pack your bags for the trip to India, and listen to the podcast to learn more (27 minutes, 20 seconds)



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In this week’s podcast, Colin and I are delighted to welcome BBC Studios’ GM of FAST Channels, Beth Anderson as our guest. BBC Studios has been one of the leading innovators and early adopters of FAST, and has a well-developed, highly-strategic plan for how to optimize its vast, 100-year old iconic programming library through aggressive FAST distribution.

Beth explains all of this and also dives more specifically into how BBC Studios has created a meticulous decision tree to guide which content to incorporate into its FAST channels, how it has completely revamped its audience targeting approach moving away from traditional age/income demo targeting toward “mood-based” programming based on a concept of viewers’ “displaced nostalgia,” why BBC Studios’ is both comfortable with and encouraging of platform partners’ disparate ad monetization strategies even if the consequence is inconsistent viewer experiences with identical BBC FAST channels across platforms,

During the interview Beth articulates two incisive points about FASTs that are among the best I’ve heard: that FASTs should be thought of as “grandchildren of linear TV, but children of SVOD” and that “FAST is the most equitable form of media we’ve seen in a generation.” Both so well said.

As a major bonus, Beth will be participating in VideoNuze’s CTV Advertising PREVIEW virtual event on February 28th (complimentary registration) on the panel “FASTs – Road to Gold or Road to “SLOW?” with Tejas Shah (SVP, Commercial Strategy and Analytics, FilmRise), Josh Sharma (VP of Advertising Partnerships, Allen Media Group) and Aneessa Steilen (VP, Media and Distribution Marketing, Vevo) with the one and only Eric John (VP, Media Center, IAB) moderating.

Listen to the podcast to learn more (48 minutes, 7 seconds)

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I'm excited to announce the program for VideoNuze’s third annual Connected TV Advertising PREVIEW: 2023 (virtual) on Tuesday afternoon, February 28th (see below).  The program includes 5 sessions, featuring 21 executives, and covering the most critical aspects of CTV advertising and the broader TV/advertising industries.

CTV PREVIEW will be the most in-depth CTV-focused conference in the first half of 2023. Hundreds of industry executives are already signed up to attend. For anyone in the industry whose business depends on the growth and success of CTV, advertising, streaming, FASTs and more, CTV PREVIEW will be a must-attend afternoon of high-impact learning.

Complimentary sign up now!

Executive speakers span the buy side and sell side; established and earlier-stage media; product, sales, technology and business development. From C-level through VP-level, they will all bring their insights based on front line experience with CTV. I’m grateful to all of them for carving time out of their busy schedules to share their thought leadership with all of us.

I’m also extremely proud of the breadth of representation among speakers, as diversity, equity and inclusion (DE&I) has long been a key goal of mine for VideoNuze events. There is more work to do, but we’ve made great strides.

Many thanks to our 4 generous partners Beachfront, PadSquad, Roku and Wurl. Please contact me if you’d like to learn more about sponsorship opportunities.

Learn more now - sign up is complimentary!

Check out the full program!

Disney reported its fiscal 2023 first quarter this week, the first since Bob Iger returned to the CEO role. While other parts of the business are doing reasonably well, for Direct-to-Consumer, which includes Disney+, Hulu and ESPN+, subscriber gains were weak and ARPU was down. Iger also shared that Disney will cut its content spending by $3 billion this year. For Colin and me, all of that makes Disney’s DTC future seem murky.

Disney also plans to lay off 7,000 employees and take a $5.5 billion charge, while also stating it intends to restore its dividend by the end of the year - all a big victory for Wall Street. The layoff continues a disturbing pattern by most large tech and media companies (a topic about which I do a mini-rant during the podcast, sorry) which has put CEOs' lack of accountability on full display and smashed any delusions anyone might have had about any sort of an employer-employee "social contract" still existing (again sorry, I digress)

The most meaningful quote from Disney’s earnings call on late Wednesday was when Iger said “…the streaming business, which I believe is the future and has been growing, is not delivering basically the kind of profitability or bottom-line results that the linear business delivered for us over a few decades.”

Nor will it ever.

As Colin and I discuss this week (and as we’ve discussed ad nauseam in the past), the linear business model was based on the pay-TV multichannel bundle, which was the very definition of artificial economics. In the bundle, lots and lots of channels were delivered for a single price. The bundle’s monthly price steadily increased over the years as broadcast and cable TV networks raised their carriage fees paid by pay-TV operators.

The “elephant in the room” was that most pay-TV subscribers watched only a handful of TV networks, and yet paid for ALL of them. By far the biggest beneficiaries of pay-TV’s artificial economics were sports networks, with ESPN at the very top of the list. I first wrote about the “sports tax” 12 years ago in “Not a Sports Fan? Then You're Getting Sacked For At Least $2 Billion Per Year.” Things have only gotten worse for non-sports fans since. However, with streaming’s rise, the elephant is now fully visible, and has driven cord-cutting to record levels.

And just as the Internet has ruthlessly rationalized the economics of practically every other industry, it is now doing the same to the TV industry. The Internet allows zero room for artificial economics and anyone who violates this precept is an ostrich with their heads fully underground. Iger understands this, and his quote should fairly be seen as a signal to Wall Street that Disney is extremely unlikely to ever achieve historical financial performance in its TV businesses.

As if all of that weren’t enough, Iger then went on CNBC’s “Squawk Box” yesterday and told David Faber that “Everything is on the table…" with respect to Hulu’s eventual ownership resolution (reminder, Disney has a deal in which Comcast can force Disney to buy its 30% stake for a set minimum price that would translate into around $9 billion).

Iger’s comments basically turned Hulu into a hot potato. Really dedicated VideoNuze readers will recall that almost 5 years ago, in March, 2018 I wrote “Why Comcast Should Take Control of Hulu.” Then, subsequent to Comcast’s Peacock reveal in January, 2020, I followed up with “Quick Math Shows Comcast Missed Out On Almost $6 Billion in Revenue By Not Buying the Rest of Hulu.”

Instead, Comcast/NBCU launched Peacock and will have lost over $5.5 billion on it just between 2022-2023. If Comcast does come back in and buy Disney’s 70% stake in Hulu it will rank as the #1 irony in all the years I’ve been in the industry.

And it would make Disney’s DTC future even murkier still.

Listen to the podcast to learn more (34 minutes, 46 seconds)

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On this week’s podcast, Colin Dixon and I boldly  introduce to the industry a new acronym (technically it’s a “macronym” or “nested acronym”).

We’re all aware that free ad-supported TV (“FAST) services are currently all the rage and that many are predicting it will become a multibillion dollar streaming segment in the years ahead.  

Content providers, TV OEMs and TV networks are seizing the opportunity by launching new FAST services to capitalize on two key trends - advertisers’ insatiable demand for premium CTV ad inventory and viewers’ SVOD fatigue especially as economic uncertainty surges.

All of this makes FASTs a “road to gold” in the short-term.

But, in the longer-term, an unintended consequence of FASTs’ growth may be to precipitate accelerated churn among SVOD providers. Hence the new macronym: SVOD Losses On the Way (“SLOW”).

There are still only 24 hours in the day, and viewers constantly make choices about what to watch, what services get displaced and what they’re willing to pay for. If viewers reapportion their viewing time to strong FAST services that are flooding the market, then they’re being “trained” to consume free premium video via FASTs. Further, their expectations for ever-better shows to be accessible without payment also escalates.

SLOW is a concept I’ve been contemplating for some time, especially as I read one FAST-boosting report or article after another, as well as observing the slowing growth SVODs are already experiencing.

But this week’s announcements of WBD moving “Westworld” plus a trove of other programming to Tubi and to The Roku Channel FAST services really crystallized things for me. After all, “Westworld” is a show that garnered 54 Emmy nominations and 9 wins in its four-year run. Its popularity has faded recently and HBO cancelled it, but it still boasted a familiar, name-brand cast. For HBO, it was no “Game of Thrones” or “The Sopranos,” but it was respectable. Now all 36 episodes will be available completely for free on Tubi and The Roku Channel.

To be clear - and as I say in the podcast - I remain a fan of FASTs. I’m only raising the caution flag that the decision-making around which FASTs to launch and what premium content will be included must be made with a lot of strategic awareness. Companies condition their customers what to expect; once this conditioning is set it is incredibly difficult to recondition them.

Note: There will be a dedicated session on whether FASTs are a road to gold or a road to “SLOW” at VideoNuze’s CTV Advertising PREVIEW virtual event on Feb. 28th afternoon. Sign-up is complimentary. Initial speakers being announced next week.

Listen to the podcast to learn more (38 minutes, 2 seconds)

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