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Streaming data arrives as video platforms prepare to lure brands

by Aisling Cahill | 27.10.2017
Online giants, we all know by now, would like to eat the TV business, and they’re not messing around. Working in feverish synchronisation, every big digital beast worth the name is constructing its own big-budget video content strategy.

Apple is the latest to remind us of this, hiring former Channel 4 executive Jay Hunt – who famously poached The Great British Bake Off from the BBC – to be its European Creative Director.

Netflix and Amazon are in the vanguard – the former with its hit shows, the latter with its own slate of programming, plus the ATP World Tour tennis. And there is certainly far more drama ahead, as none of the big five – also including Facebook and YouTube – can be counted out when it comes to a swoop for the football rights or an audacious talent grab.

But the disruption of the TV business isn’t just a matter of chequebooks and empire-building. Commercially, it requires some less dramatic but equally important steps, such as proper viewing data and recognisable advertising practices. And now we’re seeing those things starting to happen too.

Recent weeks have brought early data on Watch, Facebook’s (as yet US-only) video channel, as well as an attempt from Nielsen to measure US subscription video-on-demand (SVOD) viewing. And TV is following online’s lead too: thanks to Fox Sports, we’ve begun to see the migration of YouTube-style six-second ads into the TV world.

Ready or not, we can see that TV and online video are converging before our eyes, and the implications for the flow of fresh money from TV into digital are very apparent.

Nielsen’s new data – which Netflix, incidentally has said is “not accurate, not even close” – suggest that subscription streaming may already be drawing TV-sized audiences. Among its findings are:

  • US consumers spend 13 hours a week watching SVOD content
  • 89.5% of that is viewed through the faithful old TV, with the rest on phones, tablets and other non-traditional devices
  • Hit Netflix and Amazon shows appear to pull comparable audiences to conventional TV hits
  • Only 20% of SVOD viewing is of original content

Netflix and Amazon have certainly proven the appeal of the SVOD model – Netflix had 104m subscribers as of July, and Amazon Prime is running at around 85m. Both are toying with more advertising – Netflix with pre-roll previews for its own service, while Amazon is said to have been holding ad industry talks.

But the full field – and the broader advertiser opportunity – is still taking shape. YouTube is investing ever more heavily in original content, enlisting James Corden, Katy Perry and Ellen Degeneres as part of a refreshed strategy, along with advertisers including Johnson & Johnson.

Google’s video platform will take an estimated 21.7% of the $13.23bn US video ad spend this year (source: eMarketer) but its particular challenge, given its enormous reservoir of user-generated content, is persuading advertisers its network is reliably safe for their brands.

Of the online video platforms, Watch is the newest and has the most to prove, but given the incredible power behind it – and the prospect of a Samson and Goliath battle between Facebook and Google’s YouTube – it is an important one to monitor. If Facebook can create a compelling video destination behind the Watch tab, it becomes that much more of a multifaceted media powerhouse.

What we know so far about this social media-driven content model is that retention times on Watch stand at 23 seconds or so – better than for Facebook News Feed Videos, but not exactly in YouTube’s class yet.

What we can see, however, is that audiences are shifting fast. With Facebook (and Google) already taking the lion’s share of ad dollars, and Amazon, Apple and Netflix also inevitably investigating the brand opportunities, such modest beginnings could easily signal the start of an exodus of TV budgets into online video.