Perspectives What's this?

Reports surface every week that hail the demise of TV and highlight the shortcomings of cable networks. However, it’s important to note that these trends are merely symptoms. They are symptoms of a larger, cultural change spearheaded by the generation of yours truly—the *in James Earl Jones’ voice* millennials.

We are consuming more content than any other generation and are, as a result, reshaping digital consumption and the future of video production, as you know it. Habits are hard to break, but if an attractive alternative is presented, it becomes much easier to shift gears and form new habits. The classic Gen X habits of being a couch potato and tied down by their DVR has nearly come to an end. Don’t get me wrong, millennials still want to consume the same, if not more, content than their Gen X counterparts. We are just more inclined to want to stream it from different places/applications via two, maybe three, screens.

Let’s take a deeper look at my generation alongside the younger generation coming up behind us, and how our changing habits are transforming the broadcast and pay TV world, as we all know it.

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It’s no secret that the content monetization models of yore have had a tough run over the past decade. Newspaper print revenues are down 70% in that time period. The decline in home video sales is outpacing growth in digital options. CD sales dropped 30% between mid-2015 and 2013, and digital downloads fell 13% over that same span. Then there’s pay TV, which has lost nearly 900,000 net subscribers in 2015 alone.

Clearly, the Internet has fundamentally changed the way people think about paying for content. Particularly with video content,  there are some big success stories. Over The Top (OTT) video services like Netflix, Hulu, and Amazon have been able to monetize shifting consumer attitudes through lucrative subscription models. As a result, the OTT video market has been on a big growth path.

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Mobile video is currently the fastest growing digital ad category, according to eMarketer, and is expected to bypass desktop by the end of this year. While large traditional publishers are quickly reimagining themselves in mobile environments, the massive shift is actually being led by popular social media platforms.
 
Facebook, Twitter, YouTube, Pinterest, SnapChat and Instagram are all investing heavily in mobile video, and for good reason: mobile video ads drive more engagement and are very effective in influencing purchase intent. Marketers undoubtedly want to take advantage of that kind of ad performance, especially with consumers spending more time using mobile devices than watching TV.

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Why did companies pay more than $9 million per minute for commercial time during the last Super Bowl? The answer: they knew that tens of millions of people would be watching their ad. Advertising rates during any broadcast are tied to viewership – the more eyeballs, the more the spot is worth. Viewership is the currency that determines how much an ad is worth, and ad revenue keeps the broadcast industry running. But what happens when you want to place an ad during a show streamed online? How much is 30 streamed seconds worth to an advertiser when there is no viewer currency to trust?

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Sometimes the cookie just crumbles. When it comes to digital advertising, who ever said that the browser cookie has to be king? Apps do not care about cookies. And if you haven’t been paying attention recently, apps make up the vast majority of time spent with digital media in 2015.

The mobile revolution has changed how we need to think about advertising. Smartphones provide the ability to target groups of people with extraordinary degrees of accuracy and automatically deliver the most relevant content to people. Programmatic and contextual ads are the evolution of advertising.

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In today’s programmatic video buying landscape, the ‘whitelist’ rules.  The whitelist is god and the blacklist is a demi-god.  Media planners and data analysts run daily reports to figure out which sites and apps are worthy; spreadsheets get passed around, emails fly back and forth between buyers and sellers, specifying and clarifying which sites are to be the ‘chosen ones’ this week…and then media buyers start praying that everything works as planned.  On the flip side, media sellers send the new or revised list up the operations chain of command for implementation, hoping for the best.  Same drill next day.  “Please add these 15 sites to the whitelist; please remove these 5 sites, they are not performing….” It’s a revolving door of analysis, communications, adjustments, and praying.

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Ad environments used to be easy to understand: a couch in a living room, positioned around a single screen. But today’s digital environment is more like five couches in front of 25 screens. It is now more important than ever to understand those environments and increase the likelihood of reaching the right person at the right time, in the right environment.

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Stream Con NYC is the new home for business around digital content on the East Coast.  The Industry Summit is where you will engage with online influencers from YouTube & Vine, thought leaders and decision makers of brands, advertising, broadcasting, licensing, and publishing.  This is the perfect opportunity to develop new avenues of business or to put the finishing touches on a business deal that has been months in the making!

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