Netflix Could Become Industry’s Biggest Spender On Content In 2018

Netflix says it may spend as much as $8 billion on content in 2018 — a figure that could make it the biggest content buyer of any media or technology company.

The company slipped the figure into its quarterly letter to shareholders Monday evening, adding that it had $17 billion in content commitments over the next few years, and is expected to spend between $7 billion and $8 billion on content in 2018.

For comparison, the $8 billion figure would be nearly twice what broadcast networks like NBC and CBS spend on content, according to data from SNL Kagan and Boston Consulting Group.

The only other company to spend more on content than Netflix until now has been ESPN, which totalled an estimated $7.3 billion in 2016, largely due to expensive live sports rights.

If ESPN’s spend is similar to what it was in 2016, Netflix could be poised to surpass the Disney-owned cable sports giant. Of course, sports rights tend to rise in price over time, thanks to contracts that were signed years ago, before the cable bundle began to fray. So ESPN’s spot atop the content world may yet be secure.

Netflix’s rapidly growing content spend adds to its competitive challenge for ad-supported media. The more cash it spends on content, the more eyeballs Netflix can steal from other sources of video, including many ad-supported companies.

Source: mediapost.com; 17 Oct 2017

Millennials mostly watch TV after it’s aired

Older people still watch more live TV, but that’s changing.

Millennials don’t watch live TV most of the time. People aged 18-34 spend 55 percent of their video-watching time consuming content after it has already aired on live TV, according to a new study from the Consumer Technology Association. Only 45 percent of that time is spent with live television.

Of the video millennials do watch, 35 percent comes from streaming services like Netflix or on-demand video from a pay TV. They spend 20 percent of their viewing time watching recorded shows off their DVR.

The switch to time-shifted TV puts further pressure on TV networks that are struggling to make their shows attractive to advertisers and retain audiences — audiences that are increasingly seeking out entertainment elsewhere, such as on Snapchat and Facebook. That’s one of the key reasons why advertisers still pay a lot of money to be next to sports content like the NFL despite its flattening audience: Sports still compel people to watch live.

People older than 35 do spend a majority of their viewing time, or 66 percent, with live TV.

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But even so, live TV has been losing ground across all demographics. The share of consumers who watch live TV at least once a week, according to the CTA study, has shrunk from 92 percent in 2014 to 80 percent in 2017.

That viewing time has been supplanted by an increase in TV watching through paid and free websites as well as network websites and apps.

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Source: recode.net; 9 Sep 2017

Streaming TV Viewers Complete 98% of All Video Ads, According to New Study

The OTT audience also tends to be younger and more affluent

The OTT television landscape is now a full-blown dominant force in the video viewing environment according to a new report from FreeWheel, part of Comcast’s advertising solutions teams.

The OTT viewer is young and affluent: according to FreeWheel’s findings, the median OTT viewer is 23 years younger than linear TV viewers, and OTT streaming households tend to make $10,000 more per year than traditional TV households.

OTT services provide benefits for consumers (a customizable viewing experience when they choose to stream), publishers (a premium platform that reaches non-traditional TV viewers) and marketers (a targetable audience of highly engaged viewers).

“New sources of premium inventory coupled with the ability to align delivery with changing consumption habits allows us to better connect with the consumer and ultimately drive more brand value for our client,” said Jon Anselmo, president at Omnicom Media Group.

“A focus on this area now ensures our clients are ready for a future that one could argue is already here,” he said.

FreeWheel found that OTT viewers, on average, complete 98 percent of video ads as compared to ad completion rates on other devices. Tablet users complete 91 percent of video ads, while smartphone users finish 86 percent.

And because OTT viewers spend more time watching programs, the odds are high that they’re seeing plenty of those ads. About 36 percent of OTT viewership is for visits of at least an hour; of that amount of time, 60 percent is spent streaming live content.

All of this adds up to higher brand metrics across the board. OTT viewers showed higher aided awareness of brands and brand favourability than desktop or mobile users, while mobile users still tend to show higher purchase intent.

“OTT and the increase in dynamic advertising opportunities in the living room represent a very valuable opportunity for our clients to use precision methodologies to reach viewers who have diversified their viewing habits to include OTT,” said Jonathan Bokor, svp and director of precision video at Publicis Media Exchange.

“We believe that the future of TV will marry the best of linear and digital and when OTT is transacting at scale with more standardized measurement, it will realize its full potential for brand marketers,” he said. “Today, despite the measurement challenges, it represents incremental reach and value for our clients, and we continue to seek out creative solutions to tap into these audiences.”

FreeWheel also found that OTT viewers tend to stream TV throughout the day; streaming peaks slightly in the morning as viewers watch morning news reports, but there is a clear peak on all OTT services for primetime programming.

FreeWheel Advisory Services selected a sample of its U.S. clients who represent 95 percent of OTT-driven impressions and combined those findings with data from Nielsen’s Digital Ad Ratings for desktop and mobile statistics to complete this report.

Source: adweek.com; 2 Aug 2017