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November 19, 2018
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TV streaming services see 212% jump in viewing hours over past year

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Live streaming TV services, like Sling TV, PlayStation Vue, Hulu with Live TV, and others, are gaining steam in the U.S. as more consumers cut the cord with traditional pay TV. According to a new report from Conviva out this morning, these services (called virtual MVPDs) now account for over three-quarters of all plays and viewing hours in the U.S. That growth has come at the expense of dedicated apps from individual publishers, the report found.

Over the past 12 months, streaming TV services – the virtual MVPDs like Hulu with live TV, Sling TV, or PlayStation Vue – have seen a 292 percent increase in plays and a 212 percent increase in viewing hours, while publisher apps have seen declines of 16 percent and 19 percent, respectively, across those fronts.

The services have also been improving over time. Many suffered from glitches and outages at launch – and this continues today, on occasion. But overall, they’re more stable than in the past.

The report found that across these streaming TV services, there’s been a 22 percent decrease in video start failures, a 7 percent shorter wait time for video to start playing, 25 percent higher picture quality, and 63 percent less buffering.

The draw of streaming TV services is a cable TV-like experience with added benefits, like the ability to watch across devices, record shows to a cloud DVR that’s not (in theory) limited by disk space on a set-top box, integration with your smartphone’s notification system for alerts about favorite shows or events, and more.

But the ability to tune into live content – like live events and sports – is a major draw for cord cutters, as well.

Year-over-year, live TV content has seen a 49 percent increase in plays and a 54 percent increase in viewing time. The NFL is a huge part of this, with plays up 72 percent and viewing hours up 83 percent in Q3 2018, versus the year-ago quarter.

In the weeks that games were airing, NFL viewership accounted for 3 percent of total plays and 2.8 percent of all viewing hours in the U.S.

Because many viewers tune in at the same time to watch a live broadcast, compared with other content, there’s still room for improvement on this front. The firm also found that live television streams take 10 percent longer for videos to start, and see 72 percent more exits before the video starts, as a result.

The way consumers are watching streaming TV services is changing, too, the study said.

Though one benefit of these newer services is no longer being tied to a TV for viewing, it seems many still prefer it. While mobile viewing continues to grow – it’s up 57 percent year-over-year – it no longer dominates.

Connected TVs – such as those connected to Roku players, Amazon Fire TV, Apple TV, etc. – now account for as many streaming TV plays (38% on TVs) as mobile devices (39%). They also account for more than twice the viewing hours, with a 56 percent share to mobile’s 25 percent share.

Viewing on the PC is down by 18 percent, meanwhile.

Conviva, like other reports, have found that Roku leads the market – in this case, in terms of viewing hours. Roku accounted for 40 percent of viewing hours, but Amazon Fire TV gained. Amazon’s connected TV device platform increased its share of viewing hours from 3 percent to 18 percent over the past 12 months, and increase its share of plays from 4 percent to 19 percent.

The report is a snapshot of the industry that comes from Conviva’s global footprint of 50 billion streams per year across 3 billion applications and 200 million users. The company works with brands like Sling TV, HBO, Sky, Turner, Hulu, Discovery, CBS, Canal Digital, and others. That gives it deep insight into the streaming TV space to see trends, but not a complete look as not all providers are Conviva customers.

 

 

 

News Source = techcrunch.com

What’s next for podcasting?

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The podcast market will discover the answer to a foundational question about its future in the next few years. Will it continue along the path of music streaming, where all podcasts are available everywhere on free, ad-supported tiers? Or, will it follow the path of streaming TV into paid subscription services with exclusive content?

Today, effectively all of the industry’s revenue is from advertising — at least in the United States. However, we’re seeing the first steps being taken toward paid subscriptions and exclusive content. Based on numerous discussions I’ve had with top figures in podcasting over the last month, it’s clear that popular shows are getting large offers for exclusivity on podcasting platforms, major Hollywood players are entering the market, and some top VCs are willing to back new streaming platforms taking a Netflix approach to podcasts (like Luminary Media which raised a $40 million seed round).

Many in the industry are deeply skeptical of that business model and for good reason: we don’t have concrete evidence that consumers in the US will pay for podcasts and ad revenue is becoming quite lucrative for the top shows as the format gains popularity. But that precedent has hardly been entrenched, as the sector is only just now gaining mainstream consumer interest and getting attention from Hollywood.

And, there’s a macro problem with betting on ads. The dominance of Facebook and Google over all digital ad spending has already driven a shift to subscriptions across music, video, and publishing. Even with dramatic market growth, podcasting doesn’t have a comparative advantage in competing against the scale and ad-targeting of the duopoly.

Subscription tiers and exclusive shows (akin to Netflix Originals) can, on the other hand, provide a virtuous cycle of quality content and stable revenue, generating recurring revenue directly from consumers who might ultimately pay for multiple streaming subscriptions to access different shows.

Could podcasting go the direction of streaming TV, with subscription tiers and original series? The breakout success of House of Cardsthe first Netflix Original—set the stage for Netflix’s dominance in streaming TV.

Podcasting’s future looks more like Hollywood than like NPR radio

The annual Infinite Dial survey by Edison Research tracked that the percent of Americans over age 12 who listen to a podcast in a given month grew steadily from 9% in 2008 to 26% (or 72 million people) in 2018. Fifty-four million Americans, or 17% of those over 12, are weekly podcast listeners with a mean weekly listening time over 6.5 hours.

The popularity of podcasts still exists primarily within a demographic niche, however. Roughly half of podcast listeners make $75,000 or more in annual income and a clear majority have a college degree (in fact, one-third have a master’s degree). This highlights how much potential for audience growth there still is. Podcasts are still mainly formatted like NPR radio shows, with hosts discussing politics, business, or society and a particular audience demographic tuning in as a result.

But podcasting is just a content medium and should be filled with shows that appeal to all different types of people, just like music, TV, film, publishing sites, and YouTube each have a vast range of content for everyone. Tom Webster, the SVP of Edison Research who co-authors that big annual survey on podcasting, highlighted in a recent blog post the discrepancy between the format and topics of the most popular podcasts and those of the most popular TV shows.

Addressing this gap in diverse show types is the thesis behind large new podcast production companies like Gimlet Media, Wondery, and Endeavor Audio. Endeavor Audio launched on September 13 as the podcast division of entertainment conglomerate Endeavor, dedicated to financing, developing, and marketing podcasts made for as diverse a set of topics and styles as there are in TV: scripted dramas, competition shows, documentaries, etc. that appeal to different audiences. Endeavor also owns WME, the world’s largest talent agency, giving it distinct advantage in creating new shows that draw on the skills of top creative talent in Hollywood. The upcoming wave of podcasts crafted to be more like TV shows than radio shows is what could bring tens of millions new listeners into the podcast market.

That will only be accelerated through music streaming services’ entry into the market and the rapid consumer adoption of smart speakers. Spotify, Pandora, iHeartRadio, and others have made podcasts a priority over the last year, promoting shows to millions of users who aren’t already into podcasting. Smart speakers like the Amazon Echo and Google Home make it easier for people who hear about a podcast to try it (just ask Alexa to play it) and will likely increase podcast listening among those in age groups that have lower smartphone penetration (children and people over 55).

Advertising isn’t the best path forward

Last year the US market size for podcast ad revenue was only $314M and this year it will still be around $400M (according to the IAB). That’s extraordinary annual growth for an industry but it’s still tiny in absolute value. Justine and Olivia Moore at VC firm CRV crunched the numbers to show that podcasting makes 10x less money per hours consumed than any other major content medium. There’s a lack of monetization on the vast majority of podcasts: the minimum number of downloads per podcast needed to enroll in the industry’s ad marketplaces or start discussions with most advertisers is 50,000. As they noted, this is attributable to a range of issues like lack of programmatic advertising, lack of analytics, and lack of consistent measurement standards.

Life is admittedly getting good for the most downloaded shows now that the podcasting market is getting serious attention. One executive I discussed this with (who represents several top podcast creators) says there are a handful of podcasts generating eight-figures in ad revenue per year, a rapidly growing tier making seven-figures, and a large “middle-class” making six-figures. That’s before income from touring, merchandise, and book/film/TV deals. The going rate for ad spots is anywhere from $20-50+ CPMs and podcast ads tend to have a higher conversion rate than video ads.

As General Manager of Endeavor Audio – the new podcasting division of entertainment conglomerate Endeavor – Moses Soyoola is overseeing a group that’s bringing top Hollywood talent into the podcast space and financing new types of shows.

But near-term financial gains are not the primary reason that big names in Hollywood are getting interested in producing podcasts, according to Endeavor Audio general manager Moses Soyoola. When we spoke recently, he explained that while the income can reach into the seven figures on successful shows, that’s still less than what they can make in other creative projects. They see podcasting as a brand-building mechanism, however, and as an opportunity to understand a new storytelling format that could become even more lucrative in the future.

As with all ad-dependent content, the losers right now are those with passionate niche audiences and those producing big-budget shows that advertisers treat the same even if audiences find much deeper value in. A creator with a devoted fan base of 30,000 listeners cannot currently tap into advertising nor easily turn to subscriptions as an alternative. Listening to an hour’s worth of news discussion that the hosts record over a couple hours day-of generates roughly the same ad revenue as listening to an hour installment of a show that takes months to produce.

With the growing number of narrative podcasts being created by Endeavor Audio and others, the need to include numerous ad spots throughout them is disruptive, pulling audiences out of the story. It constrains the format and limits content within the boundaries of family friendliness that major advertisers are comfortable with. This is like the historic difference between network TV shows and HBO shows, which — freed from ad breaks and advertiser concerns — became the crown jewel of TV dramas and went on to consistently top the Emmy Awards winner list.

Would people pay for podcasts?

China is the inverse of the Western podcast market. The Chinese “podcast” market dwarfs that of the US because it is the norm to have paid subscriptions for shows rather than rely on advertising. To my understanding, the definition of podcast here may be broader than the scope in the US — by including audio courses — but the Chinese government estimated the market for paid podcasts alone as $7.3 billion in 2017.

We know consumers in the West are willing to pay subscriptions for film/TV and for ad-free streaming music, so why not for podcast streaming? New content formats often start free, have lagging monetization, then as the audience grows enough and creators experiment enough, premium content rises up that people are willing to pay for. Podcasts have been around for two decades but are just now going mainstream and seeing serious investment from Hollywood.

We saw with music streaming and satellite radio that many consumers are willing to pay in order to eliminate audio ads from music that’s otherwise free to listen to. Spotify has made a big push into podcasts over the last few months; it creates branded podcasts in collaboration with advertisers but can’t remove ads that are within podcasts it distributes. As podcasts turn to programmatic advertising — and large streaming services like Spotify push them there in order to serve up the ads — it would be surprising if Spotify didn’t make podcasts ad-free for its Premium tier subscribers and encourage podcast listeners to go Premium.

Most podcasts aren’t worth paying for, just like most articles on the internet aren’t worth paying for. Paywalled content has to be exceptional to stand out from the noise and get consumers to open their wallets. The freemium model is most likely to become the norm in podcasting, with most podcasts available free and ad-supported but some particularly high-quality shows restricted to a paid subscription tier that’s ad-free.

Streaming competition will drive exclusivity

If we’re being honest, the existing podcast streaming services — and there are many — are all the same. They are simple utilities for searching for and playing a show. No one has cracked the nut of discoverability in a differentiated way: making podcasts easy to discover based on topic and style and having a personalized recommendation tool that works as well as Pandora and Spotify music recommendations do.

Streaming services of any content format struggle to differentiate on user interface alone. Users are there for the content — that’s the product they’re after. So ultimately, the way to differentiate is via exclusive content that audiences eagerly want. That’s true whether the service has a paid subscription or not, but maintaining a profitable subscription tier is nearly impossible if one’s competitors are able to offer all the same content for cheaper. Differentiation requires differentiated content available in the subscription that can’t be gained elsewhere: high-quality original shows.

This past summer, Spotify launched its first Spotify Original Podcasts, including a $1 million deal with comedian Amy Schumer to develop “3 Girls, 1 Keith” (which it just renewed for a second season). Schumer’s podcast isn’t exclusive to Spotify but it’s easy to envision the streaming service signing future podcast deals as exclusives as its base of podcast listeners grows (it has rapidly become the second most popular podcast platform after Apple’s Podcasts app).

Each individual I’ve spoken to over the last few weeks who runs a leading podcast production company said they are getting approached by numerous streaming platforms about exclusive shows. Most aren’t taking the deals, at least not yet, but it’s clear the industry is about to run this experiment over the next couple years and see if consumers buy in.

A couple of the executives I met noted that the deals top podcast services are offering for exclusivity are quite lucrative, but when you factor in how much the reduced audience size that comes with being exclusive limits touring, merchandise sales, and potential for a book/film/TV deal, it’s a tougher sell.

That has been true, but I think it’s quickly changing. Given how much consumer adoption of podcasts is poised to grow, the top few podcast streaming services (by monthly active users) could each enable an exclusive podcast to still reach an audience in the millions of listeners. In particular, I’m talking about Apple Podcast, Google Podcasts, Spotify, Pandora, and iHeartRadio given their pre-existing install bases. It’s also a rational decision for each of them to overpay for exclusivity of hit shows in these early days of the market — the short-term loss on a given show is an investment in becoming the preferred streaming service for millions of new podcast listeners.

The streaming platforms don’t have the leverage to negotiate ownership over exclusive podcasts—there’s too much competition between them and optionality for podcast creators—so creators will retain rights to develop touring, merchandise, book/film/tv deals, and other revenue streams. As a successful TV producer explained to me, the consideration of turning a podcast into a TV show is the same as turning a book into a TV show: it’s about whether it’s a captivating story that engages the audience; the existing audience size will affect deal terms but a hit podcast only being on iHeart or Spotify wouldn’t inhibit it from getting a deal.

iHeartMedia

If one company is uniquely positioned to offer exclusive shows without a paid subscription tier, it’s iHeartMedia (which acquired the Stuff Media podcast network in September). In addition to its iHeartRadio streaming service, it can syndicate shows across its radio stations which reach 250 million Americans per month. That could generate more ad revenue than from a show existing solely across podcast apps and give it a bigger fan base to benefit touring and other revenue streams.

Looking at how exclusivity could impact consumers’ experience, it’s notable that people are typically on the hunt for just one podcast to listen to in a given session. With lengths typically 25-60 minutes, this is most similar to picking out a TV episode. Music services need full libraries of the world’s songs because people listen to a wide range of 3-4 minute songs in the same sitting and organize them into custom playlists of every imaginable combination. Having music divided between separate streaming platforms would be disruptive to the core experience of a music listening session. Switching apps to listen to a different podcast might not be any more inconvenient than doing so for TV shows on different streaming services.

Podcasting should embrace “listener revenue”

Direct “listener revenue” from paid subscription tiers enable a whole swath of niche content creators to make a living creating high-quality podcasts for a small, passionate audience and they enable worthwhile return-on-investment for big budget productions that audiences find deep value in. Importantly, subscription tiers across the major podcast streaming platforms would drive an industry-wide focus on shows that gain popular acclaim rather than shows that maximize initial downloads or streams (just like subscription publishing incentivizes quality over clickbait).

Breakout shows that receive pop culture buzz will be critical to any paid subscription tier in podcasting gaining traction, like the success of House of Cards and Orange is the New Black were critical to Netflix gaining respect for its Netflix Originals and differentiating from competitors. Such breakouts will likely involve a big name from Hollywood whose existing fan base drives a critical mass of initial listeners, and whose name recognition lends credibility to a potential paid tier subscriber. And it will almost certainly be a narrative format rather than another talk show.

Incumbents moving into podcasting from music streaming (or that are operating systems able to pre-install their app) have a distinct advantage here over startups dedicated to podcast streaming. Established players can expose millions of existing users to their own shows and bundle premium podcasts into existing subscription plans. Podcast streaming startups hoping to break through will need a lot of initial capital to develop their own shows and will need to seek bundling partnerships with companies that already have distribution — like mobile carriers and subscription video platforms. Luminary Media in NYC, founded by Matt Sacks of NEA, might be the first to launch with this approach: with a $40 million seed round, it’s aiming for a majority of content on its upcoming subscription streaming service to be its own originals within 3 years. Don’t be surprised if a couple other VC-backed podcast apps take this route in the year ahead as well.

It is likely we will see a combination of exclusive shows and paid subscription tiers develop on several platforms over a period of the next 18-36 months. It won’t happen overnight, but looking at the precedent set in other content formats and having spoken to two dozen senior figures in the industry during the past month, we seem to be in the early days of this shift, driven by the growth of podcasting from talk shows into a broader entertainment medium.

News Source = techcrunch.com

AT&T’s streaming video device is now in beta testing

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AT&T has begun beta testing a streaming device that seems to be something of its own Roku competitor, according to a statement made by John Donovan, CEO of AT&T Communications, during the company’s third quarter earnings call. The device, first scooped a year ago by Variety is an Android TV-based set-top box which integrates other streaming apps and ships with a voice remote, according to an FCC filing.

While AT&T didn’t comment on Variety’s report at the time, it did later confirm the device on an earnings call earlier this year.

The box was then described as a way for customers to watch DirecTV Now or other streaming services from their home. The plan at the time was to have the device launched by the end of 2018, the company had said.

The word today is that timeframe has shifted.

Donovan said the service was in “beta testing” now, but added that AT&T planned to “roll out trials in the first half of next year.”

The thin client-based service – as this product was referred to as by the exec – would be the next step in transitioning traditional pay TV customers to the streaming service, DirecTV Now.

It could also be used to target cord cutters in search of a more traditional TV experience, by offering access to streaming TV without requiring the installation of a satellite dish.

“This will be a more measured roll out,” Donovan said, of the new thin client-based service. “Like our introduction of WatchTV, we expect this service to be EBITDA positive. And over time, it should lower our acquisition cost of our premium video service. And both of these use the common platform we introduced with DirecTV Now,” he noted.

The device’s arrival comes at a time when AT&T’s pay TV business is in decline.

The company reported a 346,000 net loss in traditional TV customers (DirecTV and AT&T Uverse) in the quarter. However, it gained 49,000 for its streaming service, DirecTV Now, which has grown to 1.86 million subscribers.

AT&T said it would also begin evaluating its channel lineups, in order to better “align content costs with the price.” That seems to mean that AT&T may also be thinking about breaking up content into even skinnier bundles – something that Hulu says it’s doing, as well.

 

 

News Source = techcrunch.com

YouTube TV’s DVR now lets you fast-forward through ads on more major channels

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Since its launch, one of the top complaints about YouTube’s live TV streaming service, YouTube TV, was that its DVR feature would often default users to the video-on-demand version of the show – which means you’d have to watch the commercials. It’s been one of the biggest drawbacks to YouTube TV, and a selling point for competitors’ services, frankly. That’s been slowly starting to change, however. And this week, YouTube announced several more deals that will allow users to opt for the recorded version of the show instead of the ad-filled, video-on-demand one.

This includes deals with AMC, Disney/ABC, FOX, NBCU and Turner-owned channels, says YouTube. Thanks to these deals, a number of the most-watched TV networks will now allow users to switch to the recorded version of the show, where they’ll have full control over pausing, rewinding, and fast-forwarding at any time during playback – even during an ad break.

The change is not because of a technical advance, to be clear, but rather one that required negotiations on YouTube’s part. Its original compromise with TV programmers was that it would switch users to the on-demand version of the show, if available. But for YouTube TV subscribers, that’s been a subpar experience – and one that could drive them to rival services, like Hulu with Live TV or DirecTV Now, where fast-forwarding through commercials is supported.

YouTube also officially announced this week a number of other changes that aren’t brand-new, but recent ones it hadn’t publicly noted yet – including the rollout of a Dark Theme on the desktop – similar to the one on YouTube proper; the ability to personalize its Live TV Guide by reordering networks and hiding others; and the ability to turn off spoilers to hide sports’ scores.

The streaming TV service is one of the newer ones to arrive, and still behind market leaders Sling TV and DirecTV Now, which have millions of subscribers. However, YouTube’s service is growing quickly, having gone from an estimated 300,000 paying customers in the beginning of 2018 to 800,000 this summer. With the DVR improvement, those numbers could grow even more quickly.

News Source = techcrunch.com

Netflix is planning a choose-your-own-adventure episode of ‘Black Mirror’

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Netflix is doubling down on interactive TV, according to a new report from Bloomberg this morning. The streaming service is planning to develop a number of projects that will allow viewers to control the storyline’s progress in a TV show or movie, including one in an upcoming episode of the dystopian sci-fi anthology series, “Black Mirror.”

According to the report, the choose-your-own-adventure episode will be a part of “Black Mirror’s” fifth season, which arrives in December.

This is not the first time Netflix has tried interactive TV, but it’s interesting that it’s now bringing its experiment to more high-profile, adult-orientated shows.

The company had first announced its plans to offer this sort of interactive storytelling last June, but at the time, it was focused on kids’ shows. The original lineup included  “Puss in Book: Trapped in an Epic Tale,” “Buddy Thunderstruck: The Maybe Pile,” and “Stretch Armstrong: The Breakout.”

These are show in the Netflix user interface with a small icon of a game controller over the show’s thumbnail to indicate its interactive, playable nature.

In December 2017, Netflix Chief Content Officer Ted Sarandos told Bloomberg it was preparing an experimental show aimed at older audiences, after seeing how kids had responded to the format.

The forthcoming, controllable “Black Mirror” episode will be the first time Netflix has used this format in a live-action series – and it’s the first interactive show designed for adult viewers. It’s also the first of at least two confirmed live-action projects, says Bloomberg, noting also that Netflix is in the processing of negotiating the rights to others. Two of the projects are said to be adaptations of video games.

Interactive TV is still very much an experiment. It’s not clear that this is something adults will want in their viewing experience. In addition, the production of a branched narrative is far more timely and costly which can be prohibitive in scaling these projects beyond the occasional “special episode.”

But people may come to Netflix due to curiosity about the format.

Netflix’s isn’t the only company trying interactive TV. HBO’s Steven Soderbergh project Mosaic also dabbled in interactivity through a companion app for iOS and Apple TV.

Reached for comment about today’s report, a Netflix spokesperson sent TechCrunch the following response:

 

News Source = techcrunch.com

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