How Media Companies are Investing
This year’s New York Media Festival, where innovation and influence meet, was a four day fest of learning the latest in thought leadership on gaming, video and music. I focused on video and monetization since that is changing so rapidly and has far reaching effects on what gets created and seen.
I’ll give a high-level report here from the point of view of how do media companies survive and thrive in an ever growing arena of more apps and platforms and more and more video content.
ADVERTISING. That’s the behemoth funding the majority of media creation. According to eMarketer, about $72 Billion will be spent next year on TV advertising. And, for the first time, digital is expected to surpass TV at $77 billion. By 2020, digital is expected to grow to $105 billion…while TV ad spend stays pretty flat at $77 billion.
At the end of the day, advertisers want to be able to know about their viewers and the actions s/he takes after watching an ad. Ideally, the advertiser gets the data needed to optimize a campaign so a viewer buys his or her product. There in lies the rub.
While there’s innovation and a lot of buying around Addressable TV (definition: advertisers use automation to show ads to a target household based on information gleaned from their set top boxes, versus advertising on a show that claims it reaches this audience (programmatic), Jonathan Bokor, Director of Advance Media and Mediavest, said he finds OTT (over the top – think Netflix, Hulu, etc) “most exciting.” That’s because it’s delivered over the internet and advertisers can get a lot of targeted viewer information that way.
The need for data and the ability for advertisers to drill down and improve their pitches has opened up an opportunity for third parties who promise more detailed data across the various platforms…at a cost to traditional media companies.
“Market cap has dropped by $60B in traditional media” says Ashley Swartz, Founder & CEO, Furious-Minds, a consultancy that focuses on the changing TV 2.0 landscape and the automation of television and digital media through programmatic technologies.
She says established media players should borrow from other industries for solutions. She said manufacturing has used the Kaizen method of continuous improvement: get more information, new data and get smarter.
James Spears, GM of TradeDesk says his company saw the opportunity to provide viewing data, for shows like, “The Walking Dead,” on all the mobile and OTT platforms it airs.
VIDEO CREATORS: Hearst and other programmers were adamant that they won’t pursue distribution on a platform unless there’s a clear way for viewers to find them. Roger Keating, SVP of Digital Media, Hearst Television said, “If we can’t win at discoverability, we don’t bother”. He also advised programmers that the best way to garner a following is to focus on a niche. That was echoed several times.
Other OTT strategies:
- Conde Nast: 80% of their content is short-form and it has grown viewership 300%. Problem with OTT is …it’s primarily long form. Opportunity here?
- Content creators need to create alliances. G.O. Burton. SVP Partnerships and Distribution of OwnZones, a Celebrity How-To platform, says Lionsgate and Magnolia partnered to work with Amazon. He also said “live programming is hot”.
- Other Creators talked of social media marketing to bring viewers to their channels and then offering subscriptions to binge watch. Creators like DramaFever offer exclusive Korean and Chinese programs that attract a female Millennial audience.
While opportunities for video programming abound, the key is to get the model right. Martha Nelson, Global Editor in Chief at Yahoo! predicts a day when there’s “a flood” of too much video and written content. What will we want then? Professional curators to feed us content or just look at what our friends post? Will algorithms and artificial intelligence give us the best consumer experience?