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- But it’s not that people are leaving “TV” – they are just mostly seeking it elsewhere. Traditional TV has lost 3.5 billion hours of viewing per month in the last 5 years, but connected TV viewing has increased by 2.9 billion hours per month.
- But it’s not that people are leaving “TV” – they are just mostly seeking it elsewhere. Traditional TV has lost 3.5 billion hours of viewing per month in the last 5 years, but connected TV viewing has increased by 2.9 billion hours per month.
Sometimes you just get lucky. I’m not talking about Pluto TV, which Viacom just purchased for $340 million, although deals always involve some measure of serendipity. I’m actually referencing my own good fortune to moderate a NATPE panel last week on OTT (over the top) and connected TV, featuring a senior Pluto TV executive, within hours of this deal announcement. Not a bad place or time to take a look not only at the deal but broader connected TV market signposts.
Unquestionably, TV viewing is shifting at an accelerated pace from traditional environments (cable, satellite, or over-the-air broadcasting) to OTT and connected TV (from smart TVs to Roku and other connected TV devices to mobile). Nielsen reported a dramatic 12% decline in prime time viewing from just the fourth quarter 2017 to 2018. But it’s not that people are leaving “TV” – they are just mostly seeking it elsewhere. Traditional TV has lost 3.5 billion hours of viewing per month in the last 5 years, but connected TV viewing has increased by 2.9 billion hours per month. This connected TV viewing has grown from 7% to 18% of all time spent watching “TV”. Given the quickening shift, where should we look next?
What does the Pluto TV deal mean for the future of Viacom (and CBS)?
Viacom’s Pluto TV deal is just the latest move in a digital spending spree over the last year. In February 2018 Viacom purchased Vidcon, the premiere California confab for YouTube stars and digital video, led by savvy traditional and digital media veteran Jim Louderback (who has remained). In April, the company announced the formation of Viacom Digital Studios under Kelly Day, a former executive at GenZ-focused AwesomenessTV. In July, Viacom purchased Awesomeness. And in October, Viacom named Awesomeness co-founder Brian Robbins as the President of Nickelodeon, solidifying the bridge between traditional and digital media.
Viacom’s decade-long challenges that began under its former leadership, from digital media neglect, to the delayed revamping of Paramount, to a disappointing stock market performance, haven’t gone away. But the series of forward-looking digital investments look at the very least like a contributor to the rising stock of Viacom’s CEO Bob Bakish, who seems a not-so-unlikely possibility as the CEO of a combined CBS-Viacom should that deal come to fruition. That would have been a man bites dog story not so very long ago.
What other kinds of partnerships should we look for?
The major media companies have jumped in on direct to consumer OTT offerings, from CBS All Access to ESPN+, to the forthcoming Disney+ and new offerings from Fox, Warner Media, Comcast/NBCU and more. But a lot of their viewership will end up coming through smart TVs and connected TV devices. Roku is the king of connected TV devices, but it’s everyone else’s content that they need to entice device buyers and advertisers. Amy Kuessner, Pluto TV’s SVP for Content Partnerships, told our NATPE panel about its vital partnerships with Vizio and Samsung, as Pluto powers their ad-supported Watch Free and Samsung TV Plus apps. Expect more of these with increasing multi-platform complexity.
In our brave new world, it’s not enough to create a vehicle through which your audience can watch you (yes, even for Netflix - that's what the $12 billion in content spending is about). It’s demonstrating the expertise in speaking to that audience in the first place. I had a fascinating conversation at NATPE with Ashkan Karbasfrooshan, founder and CEO of Watch Mojo, the millennial YouTube phenomenon with 19 million subscribers today and over 12 billion hours of viewing to date. Ashkan noted that in his increasingly frequent conversations with both traditional and digital media players, his position varies from being the content producer (who knows how to make content millennials want to see) to content distributor (creating a viewing platform for millions). That is likely becoming a distinction without a difference, as the real golden goose is demonstrating the ability to connect with audience – anywhere and anyhow. Don’t just Watch Mojo – watch this whole space.
What needs to happen in OTT infrastructure?
There is a lot of great looking real estate in the connected TV neighborhood, whether it’s Pluto TV, Philo TV, Fubo TV, Xumo, Tubi, or the Roku Channel. But how well is the plumbing working for the owners and their content contractors?
Take a look at your welcome screen on Roku and scroll down for the hundreds of different content providers (Sorry still haven’t checked out Vivi Rakuten or (Needle in a?) Haystack TV). And then consider the thousands of individual television stations in the US. They have localized content that they’d like to deliver to connected TV. Both Sinclair Broadcasting – through its new STIRR service – and SBTV are platforms bringing this local content to connected TV platforms on behalf of these stations. You can also add in every You Tube content provider that should be thinking about how they can translate their content expertise to the connected TV environment (where you don’t have to share 45% of your ad revenue with Google). Do every one (or any one) of these folks have the tech expertise in house or with a trusted partner to monetize their content in this new environment? Do they even know what they need to know?
I spoke with Sean Doherty, CEO of Wurl, a leading connected TV tech vendor, who told me that even a year ago the connected TV advertising space was still “chaos”. He said many of the newly emerging connected TV content producers weren’t on advertiser radar screens based on “fundamental” problems such as connected TV sets lacking appropriate IDs for ad networks to find them. Wurl and Syncbak, whose founder and CEO Jack Perry also sat on my NATPE panel, both serve as B2B tech partners for many in the OTT and connected TV space (Syncbak also goes directly to the consumer through ownership of SBTV). These companies and others are also seeking to ensure high-quality streaming video experiences (with no buffering) that viewers from the traditional TV environment have come to expect when they watch connected TV. If you’re looking to invest or even license content from folks in the connected TV space, best to verify (don’t even trust first) that this tech is nailed down.
