Future of TV
How long can traditional TV last? Audiences are now watching more and more content for free on large social platforms like Facebook, YouTube and Snapchat. Currently the TV advertising market is worth $185bn. But with more advertisers availing of social media user data to create highly targeted ads, revenues from TV advertising will likely take a knock.
Legacy media companies are trying to defend their pay-TV system with offers such as 'skinny bundles' to attract younger audiences:
Hulu—co-owned by Disney, Fox, Comcast and Time Warner—and AT&T, a pay-TV and telecommunications giant, are among those offering a cheaper version of pay-TV—a “skinny bundle”—streamed over the internet.
At Rerun, we reckon this is just fighting the inevitable. TV is becoming a factored experience. Audiences want to pick and chose what they watch, what device they use, and when and where they view it. Linear TV is no longer the content solution that fits all and emerging viewing habits, and will have to learn to embrace new technology in order to keep audiences engaged.
Snapchat revealed their partnership with the NFL drew 42 million unique U.S. viewers last season. They have since solidified an extensive partnership with the league.
In 2015, NFL content reached 31 million unique U.S. viewers, according to Snapchat. For the 2016-17 season, the league launched the dedicated daily channel, with specially crafted articles and videos, and it hosted live stories around every game, leading to the 35% jump in viewership.
According to eMarketer, the 42 million unique viewers this year represented a big segment of Snapchat's U.S. user base, which was 61.7 million in 2016. At Rerun, we reckon Snapchat's success with the NFL, and the potential to replicate this success, is one of the leading reasons why NBCUniversal has snapped up a $500 million stake in the social media platform.
But we are still left wondering what a Snapchat 'view' actually refers to.
Given the wide spread use of ad blockers, advertisers are finding it harder and harder to get their ads seen. As a result, publishers and brands are turning to immersive video such as 360, augmented reality and virtual reality to win back some of their lost market share.
In a recent report from BI Intelligence, some important points were made, that we at Rerun think are worth noting:
- Advertisers are falling behind on the consumer shift to mobile. Consumers in the US spent over a third of their total media time on mobile devices in 2016, while only 17% of advertisers' digital spend went toward mobile.
- VR content was found to elicit higher emotional engagement and longer engagement periods than traditional 2D, according to YuMe and Nielsen
- BI Intelligence predicts that global VR headset shipments will increase 359% over the next six years, from 12 million in 2017 to just over 55 million in 2022.
The continuing evolution of Netflix is nothing short of riveting and the streaming giant is one of those brands to which the inevitable question of "Where will they go next?" will always apply.
Little surprise, then, to learn that Netflix is now, in the words of Fortune's Matthew Ingram, "...expanding aggressively into new genres including comedy, unscripted "reality" shows and international content."
Netflix has already signed up comedy kings and queens such as Louis CK, David Chapelle, and Amy Schumer for Netflix specials. Ingram illustrates growth in the market by stating that "...the average price for a top-tier comedy special would be in the $10-million range, according to Variety magazine. Now it is twice that amount."
Original reality shows also seem like a priority for Netflix:
The streaming giant is also pouring money into developing its own unscripted or "reality TV" shows, including one called Ultimate Beastmaster, which is produced by and stars actor Sylvester Stallone. The show pits contestants against an obstacle course, and in a unique twist, it is being filmed six different times for different markets.
Licensing is another area where it seems Netflix will push resources. Ingram notes that Netflix CEO Hastings Reed has already spent $1.75 billion on licensing foreign shows and creating original content itself or through co-productions. With Netflix now operating in over 200 countries, it's reach, it seems, knows no end.
And if all that wasn't enough, guess what? Netflix might actually allow viewers to choose how its shows end.
From the end of the 20th century into the first decade of the 21st, ESPN dominated the sports market. It was built on energetic and hip content. But now, consumers are growing tired of the shift toward mainstream, fluffy content.
As the U.S. TV industry continues to evolve past cable TV providers, ESPN has lost nearly 15 million subscribers over the past few years. And having signed nearly decade-long deals with the likes of the NFL and NBA for billions of dollars each year, it is locked up in fixed costs.
...ESPN is caught in a vise whose jaws are slowly closing.
So, it is set to make major cost cuts. Unfortunately, it will likely come in the form of large amounts of job layoffs.
Moreover, in order to adapt to the changing consumer television market, ESPN announced in February that they are releasing a streaming service later this year. Can going direct to consumer with their content fix their financial woes? Let's hope.