When I began writing this, several titles came to mind. Some that were not suitable for posting. With CES going on this week, I thought it would be appropriate to take on the subject of Video, Audio, and On Demand marketing, as we see literally thousands of new devices and services to deliver content proposed and announced. Everything from credit card slim smart TV’s to floating Bluetooth speakers, personal activity monitors, and speech recognition smart home devices. As you can imagine, advertisers are there also to see how marketing might be applied to these devices and how these opportunities might play out.
What does it all mean? – What does all of this mean for content providers, ISP’s (we will refer to them as the deliverers) and marketing and advertising folks? Currently Audio is the first to have encountered this type of disruption in the broadcast market. With the introduction of services like Sirius XM and then Pandora, Hulu, SoundCloud, Apple Music, and others the radio broadcast market had to pivot and rethink how it does business. It is still up in the air how that will all pan out. Currently, the satellite radio market has been pretty much decided with the clear winner being Sirius XM. But with the addition of wifi hot spots to most vehicles, satellite technology may be a thing of the past. Streaming technology like Apple Music, Pandora and others are now battling for the dashboard and all of the data and delivery that goes with it. But audio isn’t limited to Vehicles. It is in the palm of almost everyone’s hands, as is video. Every desktop, laptop, smart TV, mobile phone and tablet in the world is equipped to deliver streaming audio and video now. It sounds odd, even ancient to describe it that way because it has become so integrated into our lives already. We can watch and stream whatever content we want, whenever we want and only our availability and data plans restrict us. That is where the rub begins. Restrictions placed on not only end users but, those who create content for consumption. This is where the advertising and data model gets a lot murky.
Who owns the data and how it flows? – Much like other industries like beacons and retail, the questions of who owns the data have come up already. who should be allowed to deliver content? How should it be allowed to be delivered? In a nutshell “net neutrality” becomes key to the whole model. You see if I am Disney and I want to create my own subscription service through my app or website then I should be allowed to do that. I should also own the data that I collect from those that sign up and view my content. On my own channel, I can run ads, deliver content and collect revenue as I see fit…………..that is in a perfect world. But in the world we live in, huge media companies have to consider everything from what they license the content to other for, server and storage costs, and possible bandwidth costs and restrictions. You see, while my kids may love the HD version of Frozen, my wallet does not. That is not since Comcast has begun putting a 1TB data limit on my wifi at home. Every time I go over that 1TB limit I get charged extra……with three teenagers at my house online every waking minute (and apparently some non-waking hours as well) the 1TB goes fast. Making Frozen in HD and that service which I also have to pay for, a lot less attractive. This, in turn, makes me think twice about cord cutting because we know mobile data plans are limiting as well. If you think about that point alone you can see where this is going. The great equalizer in broadcasting via a digital signal is the cord. Somewhere someone owns the cord. Whether it is the ISP sending data to the consumer or receiving it from the content provider it has to go to a server and through a cord somewhere to get from where it is going to where it is going. You could use cell data, but the carriers have already begun the adjustments to make sure they are making revenue there. Limited data plans or unlimited data IF you sign up for another service you might not need or want. either way, they get their revenue.
About data and the point. – Stay with me here, because they are also getting all of the data associated with it. I got into a deep conversation about this with a colleague. He believed in order for us to have access to the data we needed for TV programmatic we needed to go to the networks. My argument was that while they will have some audience data (what is given to them by either the usual sources like Nielsen), the bulk of the data will come from carriers, ISP’s, and satellite companies because those have become the delivery method of choice for consumers. We want what we want when we want it. On Demand and binge watching are now used regularly in conversations. Not only will they own the audience and the measurement, they also own the network for delivering ads. It has become almost expected to see either the “wait 5 seconds to skip this ad” button or pre-roll commercials on videos. For most movies and full episodes, there is an intermission or two with ads as well. Even though we may pay for this service we find it acceptable for it to have ads in order to keep the subscription price to a minimum. If we want no ads, we pay a little more.
Net Neutrality becomes more important. – You can see where net neutrality becomes important not only for consumers but for content providers as well. With internet providers wanting to give priority to those paying more for higher bandwidth and larger data pipes this restricts things on both sides from a cost perspective. No longer with the 15-year-old “I only watch HD videos of my favorite YouTubers” have access to those internet stars, but less of that content will be made available. Already AT&T has required a subscription to Direct TV in order to get unlimited data and Comcast has begun putting a 1TB data limit on residential customers and charging overages when that is exceeded (this is the voice of experience). On the delivery side, commercial rates obviously apply and it will be interesting to see how that pans out. But my point here is these restrictions also limit the amount of consumer data that advertisers and marketers will have access to. Where they get the access to the data will also be restricted creating a monopoly of sorts for internet providers. Will we need to go through a period of this before deregulation? That s anyone’s guess and could pose some interesting strategy questions when it comes to Programmatic TV and video targeting in the future. Who will hold the data? Content providers all believe they should because it is their content that drives the audiences. But the ISP’s are all saying not so fast. Imagine if you will, the ISP’s restricting how much data a specific show or even time of day is given due to higher or lower usage. Prime time shows could be restricted based on the size of the audience they pull, with larger audiences given precedence over smaller ones based on their data numbers and projections. Also, it may not be possible to target dog owners who faithfully watch the Westminister dog show, because the ratings are too low to warrant adding them to the list of available inventory (this is an example only). This would all but kill the ability for all but the most famous YouTubers to continue to make a living by providing clever content. the other question becomes who would decide this and how much transparency would come from it.
The Bottom line. – This is still the early days of video, on demand and programmatic TV. So far everyone is playing nice and data is still flowing relatively unrestricted as different models are being tested to see which causes the least amount of backlash. The Scenario’s above hopefully are worst case. But it is a glimpse into what could come about and the potential this all holds for Marketers, advertisers, content providers and ISP’s.
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