__MAIN_TEXT__

Page 1

VIEWER WATCH 2021

STREAMING IS EVERYWHERE, NOW WHAT? How a year like no other quickened the pace of TV industry transformation V O L U M E 4 2 • N U M B E R 1 • J A N U A R Y 11 , 2 0 2 1 • $ 6 . 9 5


VOLUME 42 • ISSUE 1 • JANUARY 11, 2021 WWW.MULTICHANNEL.COM

FOLLOW US twitter.com/MultiNews www.facebook.com/MultichannelNewsMagazine

ADVERTISING SALES Director of Sales, Media Entertainment & Tech Laura Lubrano, laura.lubrano@futurenet.com Ad Director Paul Mauriello, paul.mauriello@futurenet.com Account Manager Katrina Frazer, katrina.frazer@futurenet.com Japan Sales Sho Harihara, Yukari Media Inc., 81-64790-2222 or mail1@yukarimedia.com SUBSCRIBER CUSTOMER SERVICE To subscribe, change your address, or check on your current account status, go to multichannel.com and click on About Us, email futureplc@computerfulfillment.com, call 888-266-5828, or write P.O. Box 8688, Lowell, MA 01853. LICENSING/REPRINTS/PERMISSIONS Multichannel News is available for licensing. Contact the Licensing team to discuss partnership opportunities. Head of Print Licensing Rachel Shaw, licensing@futurenet.com MANAGEMENT Chief Revenue Officer Mike Peralta Senior Vice President , B2B Rick Stamberger Head of Production U.S. & U.K. Mark Constance Head of Design Rodney Dive FUTURE US, INC. 11 West 42nd Street, 15th Floor, New York, NY 10036-8002 All contents ©2021 Future US, Inc. or published under licence. All rights reserved. No part of this magazine may be used, stored, transmitted or reproduced in any way without the prior written permission of the publisher. Future Publishing Limited (company number 2008885) is registered in England and Wales. Registered office: Quay House, The Ambury, Bath BA1 1UA. All information contained in this publication is for information only and is, as far as we are aware, correct at the time of going to press. Future cannot accept any responsibility for errors or inaccuracies in such information. You are advised to contact manufacturers and retailers directly with regard to the price of products/services referred to in this publication. Apps and websites mentioned in this publication are not under our control. We are not responsible for their contents or any other changes or updates to them. This magazine is fully independent and not affiliated in any way with the companies mentioned herein. If you submit material to us, you warrant that you own the material and/or have the necessary rights/permissions to supply the material and you automatically grant Future and its licensees a licence to publish your submission in whole or in part in any/all issues and/or editions of publications, in any format published worldwide and on associated websites, social media channels and associated products. Any material you submit is sent at your own risk and, although every care is taken, neither Future nor its employees, agents, subcontractors or licensees shall be liable for loss or damage. We assume all unsolicited material is for publication unless otherwise stated, and reserve the right to edit, amend, adapt all submissions. We are committed to only using magazine paper which is derived from responsibly managed, certified forestry and chlorine-free manufacture. The paper in this magazine was sourced and produced from sustainable managed forests, conforming to strict environmental and socioeconomic standards. The manufacturing paper mill and printer hold full FSC and PEFC certification and accreditation.

Future plc is a public company quoted on the London Stock Exchange (symbol: FUTR) www.futureplc.com

Chief executive Zillah Byng-Thorne Non-executive chairman Richard Huntingford Chief financial officer Rachel Addison Tel +44 (0)1225 442 244

8 MORE STREAMING, MORE UNCERTAINTY SPECIAL REPORT: VIEWER WATCH 2021 MORE STREAMING, 8  MORE UNCERTAINTY All the major media players have embraced streaming. Now what? By George Winslow

DEPARTMENTS 4 AGENDA 26 FATES & FORTUNES 28 DATA MINE 32 VIEWPOINT 34 THE FIVE SPOT

12  BEYOND CORD-CUTTING  New strategies are blurring the lines between streaming and traditional pay TV services. By George Winslow

PLUS 16 THE MULTICHANNEL TV LANDSCAPE 18 THE MULTICHANNEL BUSINESS 19 THE ADVERTISING LANDSCAPE 20 THE CONTENT GAME 21 THE BROADBAND LANDSCAPE 22 THE OTT LANDSCAPE 23 THE EMERGING PLATFORM LANDSCAPE 24 THE MULTICHANNEL, MULTI-DEVICE LANDSCAPE 25 THE CORD-CUTTING LANDSCAPE

Cover: The Manadlorian: Disney Plus. This page: Dune: HBO Max; ESPN Plus: Lars Baron/Bundesliga; Cox

CONTENT VP/Global Editor-In-Chief Bill Gannon, william.gannon@futurenet.com Content Director Kent Gibbons, kent.gibbons@futurenet.com Content Manager Michael Demenchuk, michael.demenchuk@futurenet.com Senior Content Producer - Programming R. Thomas Umstead, thomas.umstead@futurenet.com Senior Content Producer - Finance Mike Farrell, michael.farrell@futurenet.com Senior Content Producer - Washington John S. Eggerton, john.eggerton@futurenet.com Senior Content Producer - Technology Daniel Frankel, daniel.frankel@futurenet.com Senior Content Producer Michael Malone, michael.malone@futurenetcom Senior Content Producer Jon Lafayette, jon.lafayette@futurenet.com Content Engagement Manager Jessika Walsten, jessika.walsten@futurenet.com Assistant Content Producer Chelsea Anderson, chelsea.anderson@futurenet.com Contributor Paige Albiniak Production Manager Heather Tatrow Managing Design Director Nicole Cobban Art Editor Cliff Newman

12 BEYOND CORD-CUTTING

ON THE COVER Disney Plus original series The Mandalorian was one of many shows driving the pandemic-fueled shift to streaming.

16 THE MULTICHANNEL TV LANDSCAPE

Vol. 42 • No. 1 • January 11, 2021. Multichannel News (USPS 590-190) (ISSN 0276-8593) is published semimonthly, except July, with additional issues in January and September by Future US, Inc., 11 West 42nd Street, 15th Floor, New York, NY 10036-8002. Subscription prices: U.S. 1 year, $199. Canada 1 year, $249. Foreign 1 year, $299. Prepayment in U.S. funds only. Please send subscription orders to Multichannel News, P.O. Box 1337, Lowell, MA 01853-1337, (888) 266-5828. Outside the U.S., call (978) 667-0352. Please allow three to four weeks for your subscription to begin or for changes to become effective. Periodicals postage paid at New York, NY, and additional mailing offices. POSTMASTER: Please send address changes to Multichannel News, P.O. Box 1337, Lowell, MA 01853-1337. Publications Mail Agreement No. 40612608. Printed in U.S.A. © 2021 by Future US, Inc. All Rights Reserved. Multichannel News® is a registered trademark of Future US, Inc.

Multichannel.com

3


AGENDA

Stations Reaped a Blackout Bounty Retrans disputes reached another record in 2020, according to ATVA By Mike Farrell michael.farrell@futurenet.com @MikeFCable

Getty Images

W

hile the end of the year appeared to be pretty quiet on the retransmissionconsent front with only a few disputes ongoing in 2021’s first week, 2020 was another record year for blackouts, as 336 broadcast stations went dark to pay TV customers vs. 278 in the prior year, according to industry group the American Television Alliance. In a statement, ATVA said the broadcast industry’s use of blackouts as a negotiating tool, especially during a pandemic, was outrageous and reiterated its call for regulatory reform. Whether that will come in a new administration with obviously bigger concerns is anyone’s guess. Retrans revenue has become an important part of broadcasters’ bottom lines, and the industry has long said its content has value to distributors that far exceeds the fees they pay for that content. Either way, retrans revenue is expected to continue to rise, albeit at a slower pace than in the past. According to Kagan, a unit of S&P Global Market Intelligence, retrans fees were expected to increase by about 2.5% to $12.2 billion in 2020, rising 5.7% to $12.9 billion by 2023. Blackout periods in 2020 ranged from just two days (Hearst Television’s Jan. 3- 5 dispute with DirecTV involving about 25 stations) to the 59 days (Jan. 18 to March 16) that Dish Network customers were without 18 stations in New York, California, Louisiana, Mississippi, Idaho, Oregon and Washington owned by Northwest Broadcasting. As far as ongoing disputes, most were limited to smaller pockets of the country. At press time, Mediacom Communications, which negotiated a successful retrans deal with Gray TV stations in 35 markets on Dec. 28, was still in talks with Tegna, which darkened 16 stations in 19 markets including Davenport, Iowa, and Decatur, Alabama, to the cable company’s customers on Dec. 31. Three stations owned by GoCom Media in Central Illinois went dark to Cable One customers in that area on Dec. 31. Those stations, WSRP/WCCU (Fox) and WBUI (The CW) in Springfield, were still unavailable as of Jan. 7. Also on Dec. 31, Alaskan cable operator GCI lost access to ABC, Fox and The CW stations owned by Vision Alaska and Coastal Television. In a statement, GCI said it continues to negotiate with the stations

4

Multichannel.com

for their return, but added the broadcasters are asking for “a 40% rate increase that is not the best outcome for GCI and our valued TV customers.” Capitol Broadcasting darkened three North Carolina stations — WRAL (NBC) and WRAZ (Fox) Raleigh-Durham and independent WILM Wilmington — to Dish customers on Dec. 31. There are also a couple of deals pending. Cable One is facing a deadline of Jan. 11 to reach a retrans agreement for WICD,

FADE TO BLACK 2020 was another record year for retransmission consent blackouts of broadcast stations. YEAR

NO. OF STATIONS

2020

336

2019

278

2018

165

2017

213

2016

103

2015

193

2014

94

2013

119

2012

90

2011

42

2010

8

SOURCE: American Television Alliance

Sinclair Broadcast Group’s ABC affiliate in Champaign/Urbana, Illinois; and Cox Media Group said six of its stations in Tulsa, Oklahoma; Memphis, Tennessee; Spokane, Washington; Eureka, California; Greenville-Greenwood, Mississippi; and Alexandria, Louisiana could go dark to Suddenlink Communications customers “soon.” Talks between both parties were ongoing at press time. In a press release, Cox Media, owned by private-equity giant Apollo Global Asset Management, was pretty vague, but seemed to be setting the stage for a fight. “Rather than reach a fair and reasonable deal with CMG, Suddenlink may instead choose to adversely impact their customers,” the broadcaster said in its release. “Now, more than ever, viewers need daily access to important and evolving information on the pandemic, and social and political issues.” At press time, Suddenlink parent Altice USA said it was in negotiations with Cox Media, adding that the broadcaster was demanding “higher rates than we pay any other broadcaster,” but seemed to hold out hope a deal could be reached.

Charter-NBCU Deal Feathers Peacock

Other larger retrans deals were made as the year progressed. Comcast’s NBCUniversal struck a comprehensive carriage agreement with Charter on Jan. 7 spanning its cable and broadcast networks, as well as an extended free trial for NBCU’s Peacock streaming service. Charter also agreed to distribute the Peacock app via its Spectrum guide in the future. Tegna darkened about 60 stations in 52 markets to AT&T’s DirecTV and U-verse TV customers on Dec. 1, but hammered out a deal with the satellite and IPTV services on Dec. 20. Dish Network weathered the loss of 164 Nexstar Media Group stations in 115 markets for about three weeks, eking out a deal Dec. 24. The main sticking point of that negotiation, carriage of Nexstar’s WGN America cable channel, was settled, with Dish agreeing to carry the network on its Sling TV virtual MVPD in “early 2021.” Comcast reached an agreement with Hearst on Dec. 15, a full 16 days before its deal officially expired, for stations in about 35 markets. Dish reached a retrans agreement with 14 Cox Media stations on Dec. 13, ending a blackout that had started back in July. Terms of all of these deals were not disclosed. Hearst TV also inked deals with Verizon Fios TV on Jan. 1 for stations in Baltimore; Boston; Harrisburg, Pennsylvania; and Pittsburgh. ●


AGENDA

THE WATCHMAN

WATCH THIS …

Senior content producer Michael Malone’s look at the programming scene

Trickster

Mr. Mayor

By Michael Malone michael.malone@futurenet.com @BCMikeMalone

Mr Mayor: NBC; Straight Up Steve Austin: USA; Secrets of Sulphur Springs: Disney Channel; Trickster: The CW; Call Your Mother: ABC; Bunk'd: Disney Channel

Ted Danson for ‘Mayor’

Mr. Mayor, with Ted Danson playing the feckless mayor of Los Angeles, premiered on NBC. Vella Lovell plays chief of staff Mikaela, who ends up in that role by virtue of her Instagram expertise. Holly Hunter portrays the deputy mayor. Lovell described the gig as “my dream job. To be in this cast, with this caliber of people, it’s insane.” She discovered Cheers on Netflix and is a fan of The Good Place, and so was pumped to work with Danson. His kindness helps the younger cast members forget they’re working with a legend, she said. “He’s so effortless and confident and easeful with his comedy,” said Lovell. Tina Fey and Robert Carlock produce. Lovell likens Mr. Mayor to “30 Rock and Unbreakable Kimmy Schmidt meet Veep.” Like 30 Rock, “it’s so many jokes that you can’t keep up. Some lines you only have time to smile at.”

Stone-Cold New Season Of ‘Straight Up’ on USA

Season two of Straight Up Steve Austin begins on USA Network Jan. 11. “Stone Cold” Steve Austin visits different locales with his guests and swaps stories. “A talk show without couches,” he put it. Austin visits Hattiesburg with Brett Favre and Nashville with Luke Combs. Comedian Bert Kreischer, WWE Superstar Charlotte Flair and actress Tiffany Haddish also turn up. “Each episode, something happens that’s a little off the wall,” said Austin. “Each guest brings a different vibe and a different ‘holy smoke’ moment.” Austin said he was “the biggest Johnny Carson fan in the world”

Straight Up Steve Austin

growing up, and digs Ellen DeGeneres (“Super-super quick on her feet, hilarious”). But he sets his own tone on Straight Up. “I enjoy talking to people and I’m naturally curious,” he said. Austin is pumped to share the new episodes. “I hope viewers enjoy it as much as we enjoyed making it,” he said.

The U.S. premiere of Canadian drama Trickster happens on The CW Tuesday. It’s about an Indigenous teen struggling to keep his family afloat. His chaotic life gets stranger when he starts seeing strange things. Also on Tuesday, Prodigal Son is back on Fox. It’s about a psychologist with a gift for understanding serial killers, thanks in large part to his father, a killer known as The Surgeon. Tom Payne and Michael Sheen star. Wednesday, Call Your Mother rolls on ABC. The comedy follows

Serialized ‘Secrets of Sulphur Springs’ Has Soapy Background

Something new and different gets under way on Disney Channel Jan. 15: a live-action mystery with thriller elements. Secrets of Sulphur Springs follows 12-year-old Griffin, who moves into an abandoned hotel with his family, and learns the place is haunted. It comes from Tracey Thomson and Charles Pratt Jr., who both wrote for soap operas. Disney Channel was looking for serialized storytelling, and wanted a series that would appeal to boys who otherwise may age out. Thomson had what she watched at age 12 — Goonies, Indiana Jones — in mind when she started writing. “Movies and TV shows that kept you guessing and made you think,” she said. Pratt tossed in Stand By Me and Stranger Things. There’s a serialized vibe throughout. Pratt said his soap background “is an influence in everything I do.” Promised Thomson, “It’s a show filled with cliffhangers.” ●

Secrets of Sulphur Springs

Call Your Mother Jean (Kyra Sedgwick), whose children move out and realize they may need Mom more than they figured. Thursday, it’s season four of Search Party on HBO Max. Dory (Alia Shawkat) is held prisoner by her psychotic stalker Chip (Cole Escola), who is determined to make Dory believe that they are best friends. Friday, it’s season five of Bunk’d on Disney Channel. More Camp Kikiwaka shenanigans await.

Bunk’d


VIEWER WATCH 2021

SURVEYING VIDEO’S SHIFTING LANDSCAPE THIS YEAR’S VIEWER WATCH report looks at the changing use of video and its impact on the TV business with features based on 27 interviews with industry executives and researchers. The stories are followed by nine pages of charts that document the

trends that are transforming television. We would like to thank Comscore, Horowitz Research, Magna and PwC for generously providing data for this report, which was written and compiled by Multichannel News contributor George Winslow.

More Streaming, More Uncertainty Everyone has embraced the video revolution. Now what?

Peacock

I

By George Winslow winslowbc@gmail.com @GeorgeWinslow

f the TV industry remembers 2020 as a year of COVID-19 carnage and political turmoil that brought the streaming evangelists firmly to power, 2021 promises to be the year of both growth and uncertainty. “All major media companies are all in on streaming,” Scott Rosenberg, Roku senior VP and general manager of the platform business, noted. “They have finally really started to change their focus and invest in their streaming experiences. It’s a real transformation, because everyone now knows very clearly that all TV is going to be streamed and that pay TV linear world is on the decline.” One example of that transformation can be found at The Walt Disney Co. “We are investing heavily to create the highest quality content for direct-to-consumer” services, said Justin Connolly, president, Disney Platform Distribution. “The commitments we’ve made — of billions of dollars of spending on great content — are translating into engagement, time spent and success.” For instance, Connolly noted, Disney Plus, Hulu and ESPN Plus have already beaten their combined subscriber targets set for 2024, years earlier than expected, with 137 million paid subscribers in December of 2020. Disney now predicts the three services will hit 300 million to 350 million subscribers by 2024. Similar optimism can be found at NBCUniversal’s Peacock, AT&T-owned HBO Max and Discovery, which just launched Discovery Plus. “One of reasons we are so excited to be launching Discovery Plus is that we’ve seen explosive growth in streaming in the last five

8

Multichannel.com

years,” Karen Leever, president of U.S. digital products and marketing for Discovery, said of the subscription VOD service that launched Jan. 4. “For a large population, it is the only way they know how to consume video and we are ready to tap into it.” “Ten years from now, you are going to have some number of services that are global services with hundreds of millions of subscribers,” added Andy Forssell, executive VP and general manager of WarnerMedia Direct-to-Consumer, which believes HBO Max will be one of those SVOD giants. But Forssell, Connolly and many of the 27 industry executives and researchers interviewed for this year’s Viewer Watch report also predicted 2021 will bring a great deal of uncertainty as the major players experiment with various streaming-era business models.

NBCU’s direct-toconsumer service Peacock (below) worked with Comcast to cross promote the launch of a new season of Yellowstone. Disney Plus hit 86.8 million subscribers in December 2020, thanks to investments in original content like The Mandalorian (opposite page).

“The road map for digital and streaming and the media business is less clear than it was in the past, because there is so much disruption industry-wide at the big players,” CBS News Digital executive VP and general manager Christy Tanner said. Tanner said she thinks trusted brands like CBS News should thrive in the new streaming landscape, noting that the seismic shift toward streaming and DTC video has already boosted CBS News and other news operations. The 24-hour streaming news channel CBSN surpassed 1 billion streams in 2020, a new peak for the service. The massive shift towards streaming can also be seen at Roku, which has more than tripled its active accounts from 15.1 million at the end of Q2 2017 to 46 million in thirdquarter 2020, when those users streamed about 14.1 billion hours of content. “Our research shows that the number of homes that are consuming OTT content was up by 3.6 million in 2020, year over year,” Carol Hinnant, chief revenue officer of measurement service Comscore, said. “We’ve also seen that households are consuming an extra 18 hours a month of OTT content year over year. That is a lot of incremental viewing.”

The Future of Everything

Behind the soaring numbers, many questions remain, ranging from the future of pay TV platforms and advertising in the emerging streaming landscape to how movies and other content will be financed in an environment where many blockbuster films and big-budget TV series are streaming directly to consumers. “Direct-to-consumer is a seismic shift in the focus of the industry, especially when you look at movies,” Comscore’s Hinnant said, disrupting longstanding business models for financing, distributing, marketing and monetizing programming. Given that revolutions have a propensity to be self-destructive and to turn in unexpected


VIEWER WATCH 2021

Discovery Plus includes a number of high-profile BBC natural history series, including A Perfect Planet. struggle to avoid being crippled by the $19.6 billion decline in the pay TV industry also goes a long way toward explaining the uncertainty facing many companies.

Bigger Is Better

“This isn’t going to be a year where you can wait and see what happens,” Magid VP, digital research and strategy Andrew Hare said. “Consumers are making their minds up for the long term right now. The next five years will be incredibly critical for the future of these companies.” To succeed, the larger players will have to build scale with hundreds of millions of subscribers if they want to cover massive spending on content and tech infrastructures. “That is why there is an absolute war going on for subscriptions and scale,” PwC U.S. technology, media and telecommunications partner Gregory Boyer said. “They have to have scale, and they know that if they miss the window for achieving it, it may be too late.” That imperative has precipitated an arms race in content spending. Netflix, the current market leader, could spend more than $19 billion on video content in 2021, according to the financial comparison site Bankr, up from $17.3 billion in 2020. Meanwhile, Disney has said it intends to spend from $14 billion to $16 billion on global content for direct-toconsumer services by its fiscal 2024. “HBO and HBO Max’s total content

SVOD VIEWING Magna reports that the total time spent watching video on connected TVs increased by 1.1 billion hours between Q3 2019 and Q3 2020. While Netflix remains by far the most popular service, with 5.7 billion viewing hours in Q3 2020, 11 of the top 15 services are ad-supported. (Total viewing, millions of hours, on connected TV homes)

Q3 2019

Q3 2020

Netflix

5,244

5,729

YouTube

4,373

4,056

Amazon Prime Video

1,538

3,295

Hulu

2,519

2,763

Disney Plus

0

849

Sling TV

456

540

Pluto TV

309

441

Spectrum TV

155

378

ESPN Plus

268

348

Philo

152

269

HBO (Max, Go, Now)

126

258

DirecTV Now

391

199

Tubi TV

126

176

Twitch

28

100

PBS

27

98

BBC; Disney Plus

directions, the disruption will at minimum involve shifts in billions of dollars in revenue. Big media-buying firm Magna predicts that pay TV subscribers will drop from 93.4 million in 2019 to 67.3 million in 2024, while PwC estimates that the money spent on traditional pay TV subscriptions will decline from $89.6 billion in 2019 to $79.6 billion in 2024, a $10 billion drop in revenue. Magna is also predicting that total TV advertising will fall from $60.8 billion in 2019 to $51.2 billion to 2024. That adds up to a $19.6 billion decline in traditional TV advertising and subscription revenue in the next four years, a major hole that TV companies will look to fill with new business. On the other side of the financial ledger, Magna says digital video advertising is expected to grow to $25 billion in 2024 from $14.3 billion in 2019, a $10.7 billion jump. Total over-the-top video revenue from subscriptions and content sales or rentals will increase to $30.9 billion from $18.2 billion, a $12.7 billion rise, according to PwC. More good news comes from the broadband sector, where cable operators, telcos and cellphone operators will look to capitalize on the rise of internet access spending to $216.1 billion in 2024 from $172.4 billion in 2019, creating a new $43.7 billion pot of gold, according to PwC. The $67 billion in new revenue from just those three sectors — digital video advertising, OTT and internet access — provides an obvious explanation for the widespread optimism among industry executives. But the battle to win a share of that $67 billion pie and the

budget might amount to $6 billion to $7 billion in 2021,” GroupM global president of business intelligence Brian Wieser noted in a December blog post, while “Amazon and Apple have demonstrated a willingness to invest midsingle-digit billions of dollars or more in annual content production or licensing fees.” In addition to making massive investments in SVOD content, the studios were taking more content directly to consumers. Some of this was prompted by theater closures during the pandemic, but Warner Bros. has taken the controversial step of announcing that its entire 2021 movie slate will debut both in theaters and on HBO Max. “If that continues, it completely changes the entire industry,” Leichtman Research Group president and principal analyst Bruce Leichtman said. “It changes the budgets, the marketing, the revenue. Even if the window just shrinks [from the 100-day theatrical window to 30 days] before movies go direct-toconsumer, it changes the entire value chain.” This massive investment in direct-toconsumer content also has some serious implications for the future of advertising, Wieser noted in an interview, as major content producers shift production budgets to SVOD services that currently carry little or no advertising.

SOURCE: Magna

Multichannel.com

9


VIEWER WATCH 2021

DIGITAL DIVERSITY KEY TO STREAMING SUCCESS

Warner Bros. will release its entire 2021 slate, including Dune (top) and The Witches (below) to both HBO Max and to theaters. “The accelerated investment in direct-toconsumer services will lead to consumers reducing their time on linear TV, making it harder for advertisers to reach consumers,” he said. Michael Leszega, manager of market intelligence at Magna, agreed. “As more people cut the cord, what that means on linear TV is an increasingly older demo,” he noted. “The technology, toy and movie industries in particular will be forced to leave national TV. How will toy marketers reach kids on TV if they are watching ad-free SVOD services?”

HBO Max; Telemundo

Change or Die

Such pressures are producing a wave of innovation in both advertising and pay TV. NBCU is using direct-to-consumer service Peacock to rethink the efficacy of advertising. “Historically, advertisers have spent a good portion of their budgets on linear TV,” Rick Cordella, executive VP and chief revenue officer for Peacock, said. “But linear TV viewing is now being shifted to streaming outlets and many of them are ad-free. So we are hoping to offer those advertisers a great landing spot on Peacock, where we can target those ads to the right customers and give them a much better ROI to marketers.” Operators are also making some radical changes in the way they package services, with some encouraging results. “Generally speaking, we want to offer more choice and flexibility to our customer when it comes to how and where they can consume video,” said Jodi Robinson, senior VP of digital platforms at Charter Communications, which bucked

10 Multichannel.com

cord-cutting trends by adding 67,000 video subs in the third quarter of 2020. For instance, cable operators have shown a willingness to add subscription VOD content to the traditional pay TV offering, further blurring lines between cable and streaming platforms. Comcast has added access to Netflix, Hulu, Peacock and others to various TV packages. “We just recently announced the intent to bring Disney Plus and ESPN Plus to Comcast’s set-top boxes, which will happen in the first calendar quarter in 2021,” Disney’s Connolly said. CuriosityStream, an SVOD service offering factual and documentary content, has also seen increased interest from cable operators, said chief product officer and executive VP content strategy Devin Emery. “Altice USA bought a subscription to CuriosityStream for everyone who gets the internet through them,” Emery said. Likewise, Discovery’s Leever noted that Discovery Plus is available on Verizon, “bundled across their mobile and TV subscription services, and you’ll see other partnerships, whether it is with an MVPD or another tech partner.” “There is a continued appetite for more choice and content in what [customers] choose to consume,” said Kristine Faulkner, senior VP of marketing operations for Cox Communications, which has added many SVOD services to its lineups. “But [subscribers] also want easier search and discovery because there has been a deluge of content. So we’re curating content and providing tools,” such as voice control and universal search across SVOD and linear cable content, “to make some of those options easier.” The next article will look at how all of these trends are redefining long-established TV industry business models and strategies. ●

AFTER A YEAR that saw the largest civil-rights demonstrations and protests against police brutality since the 1960s, new research is highlighting the need for programmers and operators to do a better job of serving multicultural audiences if they want to thrive in the emerging streaming and digital landscape. “The size of opportunity [with multicultural audiences] just continues to grow,” said Adriana Waterston, senior VP of insights and strategy at Horowitz Research, which has researched multicultural audiences for several decades. Horowitz Research surveys show that multicultural audiences are embracing pay TV and digital technologies at higher rates than the normal population. For example, 42% of the population subscribes to a cable operator such as Comcast, but higher subscription rates than that can be found among African-Americans (50%), Asian-Americans (47%) and Hispanics (43%). Multicultural audiences are also avid consumers of streaming media, with 72% of African-Americans streaming weekly, 73% of Asian-Americans and 70% of Hispanics, versus 68% of the overall population, according to Horowitz. “Obviously viewers have been migrating to consume content on digital platforms, and COVID-19 has really has really accelerated that trend,” Romina Rosado, executive VP of entertainment and content strategy for NBCUniversal Telemundo Enterprises, said. “But some of these trends hit Hispanic media brands such as Telemundo in a different way, because our audience is just so much younger. The median age of the U.S. Hispanic is 29, which is significantly younger than the non-Hispanic white audience, and they are consuming content in completely different ways.” That has helped produce a record-setting year on digital media, with streaming on the Telemundo app showing a 38% jump between January and November of 2020 compared to a year earlier. “We crossed 134 million followers this year on social media, and we’re seeing over 31 million engagements every month on Twitter, Instagram and Facebook,” Rosado noted. Telemundo also has about 11.3 million subscribers on YouTube, according to audience-based social media measurement firm Shareablee. Despite the importance of multicultural customers with their avid consumption of video, a recent survey from Horowitz Research found widespread discontent with TV and the media. Fifty-one percent of African-American respondents, 36% of Hispanics, 64% of Asians and 58% of LGBTQ individuals said they are not represented enough in U.S. TV shows and movies. A Nielsen analysis of the 300 most-viewed programs on TV and streaming reinforced those perceptions. Even though Hispanics comprise 18.8% of the overall population, Hispanic talent appeared in only 5.1% of the screen time on broadcast TV programs, 3% on cable shows and 10.1% on SVOD programs. African-Americans, with 14.1% of the total population, were on screen just 7.8% of the time on cable shows, versus a 24.7% screen-time share on broadcast and 18.8% on SVOD. “I think 2020 has shown light on the fact that these audiences have not only been underserved and redlined,” Waterston said. “These audiences are well aware of the problems. If you are not doing the due diligence to understand what these different diverse groups need, then you need to examine the implicit biases or systemic structural reasons that are preventing you from addressing the needs of these consumers.” – GW


VIEWER WATCH 2021

Beyond Cord-Cutting: Reinventing Multichannel TV New video strategies are blurring lines between streaming, OTT and pay TV By George Winslow winslowbc@gmail.com @GeorgeWinslow

Wonder Woman 1984: HBO Max; CBSN; Newsy; Discovery+; ESPN+

W

hile all of the major programmers are touting their commitment to streaming and pouring billions of dollars into developing new content for those services, they are hardly abandoning the pay TV industry. “I’d say the challenge for us and everyone else continues to be how to reach and engage with consumers across a bunch of different options,” including direct-to-consumer and traditional pay TV, noted Disney Platform Distribution president Justin Connolly. “We still have, and we expect to continue to have, really strong relationships with a host of third parties in the multichannel environment, and we will continue to invest in those relationships because there are consumers who want those services.” Rick Cordella, executive VP and chief revenue officer at NBCUniversal’s Peacock, expressed similar sentiments. “I think

12 Multichannel.com

Peacock is positioned to be complementary to the pay TV ecosystem,” he said. “We are not hoping to pull people out of that bundle, we are hoping to add to what people are already consuming from the streaming standpoint.” A key question is how quickly the traditional pay TV universe will decline. “If you look ahead 10 years, I think everyone, including the big cable operators, would probably predict that there will be more direct to consumer,” explained Andy Forssell, executive VP and general manager of WarnerMedia Direct-toConsumer. “But nobody knows at what rate. So for us it involves a little bit of a balance and a recognition that consumers are going to decide. Given the trends in multichannel subscriber homes the last couple of years, you would assume that world would drop a little but there are tens of millions of those customers and they are really important to us.” Ian Olgeirson, research director at Kagan, the media research unit of S&P Global Market Intelligence, noted that in 2020 “we saw an acceleration of defections from traditional multichannel service and for the most part those are doing to streaming services,” though the losses were much less

Wonder Woman 1984 (top l.), intended as a cinema tentpole, debuted on HBO Max and in theaters Christmas Day. CBSN (top r.) will be beefing up its climate change coverage in 2021. Programmers like Newsy (bottom r.) are moving beyond a narrow focus on cord-cutters. Disney is investing heavily in direct-to-consumer services like ESPN Plus (opposite page, bottom), which has also been launching on cable systems.

severe in the third quarter of 2020. Kagan data shows that in the first nine months of 2020, traditional multichannel TV subscribers declined by more than 5.6 million, down 6.8%, compared to a drop of 4.9 million subscribers, or 5.5%, in the first three quarters of 2019 and a drop of 3.1%, or about 2.9 million subscribers, in 2018.

Consumer Centric

To thrive in this rapidly shifting landscape, researchers stressed that companies will have to better understand consumer trends and rethink some of the old debates over streaming that no longer reflect the realities of the video business. “We talk about cord-cutting as a central issue, but it is really bigger than that,” Adriana Waterston, senior VP of insights and strategy at Horowitz Research, said. “It is really about the ongoing value of multichannel services.” The lines between over-the-top video and pay TV are rapidly blurring, she said, with traditional cable operators adding SVOD services and streaming platforms like Roku offering live linear channels. “What is going to be the actual value of a multichannel subscription when really all of the major media brands, with a handful of


VIEWER WATCH 2021

CNN’s investment in cloud and IP technologies helped deliver digital content to an average of 163 million visitors each month in 2020.

exceptions, can be accessed direct-to-consumer?” she asked. “What does that mean for the premise, the whole business model of multichannel TV?” Meanwhile, many programmers are crafting streaming strategies that look far beyond their old focus on cord-cutters. “I think people are now recognizing that streaming is just TV and placing less emphasis on just the mindset of the cordcutter,” Newsy chief of staff Tony Brown said. “Cord-cutting isn’t about a single particular mindset. In many ways it is a ubiquitous swath of the audience.” Added NBC News Group executive VP of digital Chris Berend: “We’ve reached a state where streaming is no longer a niche experience and the connected consumer is no longer young first adopters. You are getting parents and grandparents using these apps.” Old debates about cord-cutting can also obscure real consumer trends and changes in the business of multichannel TV. “Subscriber net losses are as much about provider strategy as they are about consumer behavior,” stressed Bruce Leichtman, president and principal analyst at Leichtman Research Group. “Over the past two years, AT&T has lost a significant number of pay TV subs,” Leichtman said of the DirecTV parent. “Over

the last year, AT&T has accounted for 72% of all pay TV net losses. That wasn’t purely because consumers said, ‘I hate my satellite dish.’ There was not a dramatic increase in disconnects, but there was a slowdown in connects, because AT&T had a change in strategy and marketing” and was not heavily promoting the services.

Virtual Rebound?

Rethinking trends in the pay TV industry is also important because various operators and sectors have responded differently to consumer demands for new packages and content, producing notably different results. The top pay TV operators serving about 95% of the market lost about 120,000 net video subscribers in the third quarter of 2020, Leichtman noted, far fewer than the 945,000 lost in the third quarter of 2019. Virtual multichannel video programming distributors (vMVPDs), such as Sling TV or YouTube TV, “had the best third quarter they’ve ever had and the whole pay TV industry the best quarter since 2018,” he said. Consumers had embraced vMVPDs because they were generally less expensive and offered more flexible video packages. But growth slowed in 2019 as vMVPDs raised prices and saw subscriber declines in the first half of 2020 as live sports disappeared from the air.

THE PANDEMIC DROVE rapid growth in streaming during 2020, fueling a notable uptick in both data traffic and new broadband subscriptions. The largest broadband providers ended the third quarter of 2020 with 104.9 million subs, up 1.5 million from the second quarter of 2020 and up 4.5 million from the third quarter of 2019, according to Leichtman Research Group, the best industry-wide performance in 11 years. Besides a boost in demand, operators also saw some notable changes in network traffic. Much of this was fueled by streaming video, but CableLabs president and CEO Phil McKinney said there were also notable increases from gaming and in upstream traffic from the home as people made more video calls from home. “Whereas in the past, there was a lot of video being pushed downstream to the home, in March we started to see a 50% jump in upstream traffic coming from the home,” McKinney said. The deadly COVID-19 pandemic also dramatically accelerated industrywide trends toward the cloud and internet protocol (IP) infrastructures that are so central to streaming. CNN, for example, has been building new all-IP infrastructures and embracing cloud technologies in the last few years. Once the pandemic hit, the news network was able to use those investments to quickly set up systems to allow staff to work from home. “We have an amazing tech operation team that figured out ways for us to utilize tools for cloud editing and to set up control rooms in the cloud,” CNN senior VP of global video Wendy Brundige said. “In the early days of the pandemic, when things were very scary, that not only allowed us to be innovative in content creation, it kept everyone safer.” Looking forward, CableLabs is working in a number of technologies designed to help the cable industry build even better networks, McKinney noted. The industry saw the first successful trials for 10G networks in 2020, delivering 10 GB speeds, and McKinney expects more in 2021. CableLabs is also on schedule for delivering DOCSIS 4.0, a suite of technologies that will boost speed, increase network reliability and strengthen security and privacy protections. “We are already looking at what happens after 10G, when you go from 10 GB to 50 GB and 100 GB” speeds, McKinney said, noting that broadband innovations provided the infrastructure that helped create Facebook, Twitter, YouTube and Netflix. “We are working to create a platform on which the next generation of inventors can innovate on top of and create some new experiences.” – GW

Multichannel.com

CNN

Discovery’s David Zaslav announced that the company would jump into the direct-to-consumer business on Jan. 4.

LOOKING AHEAD TO POST-PANDEMIC TECH

13


VIEWER WATCH 2021

Fox News; TiVo; Wanda Visio: Disney+; ESPN Plus; Run: Allen Fraser/Hulu

STREAMING PLATFORMS ARE DOING IT LIVE But there is little doubt that interest in live ONE OF THE BIGGEST unheralded trends in streaming and offering linear TV channels in a the industry last year was the growth in live variety of genres is likely to accelerate this year. streaming. Chris Berend, executive VP of digital for NBC While streaming of live programming, News Group, also reported record-setting traffic particularly news and sports, is nothing new, in 2020. It hopes to build on that by continuing the trend is notable because streaming has to work closely with the NBCUniversal direct-tolong been dominated by on-demand viewing consumer Peacock service to develop channels at services like Netflix and Amazon Prime and content, he said. Video. Now, major platforms like Roku, Peacock In 2020, NBCU launched the “Today All Day” and others are paying more attention to the streaming product on Peacock and added development of linear channels, a move that a number of special NBC News productions could have major implications for the way to the platform. “Peacock is a critical part of companies monetize streaming content. our streaming future for news programming,” While the pandemic sidelined live sports for Berend said. “It is very much the sun in our much of the year, news organizations reported solar system.” record results in 2020. “What we saw in the Others stressed that the trend goes beyond last year was people looking for lifesaving news into entertainment programming and information from trusted news sources,” noted ad-supported linear channels. Christy Tanner, executive VP and GM of CBS Scott Rosenberg, Roku senior VP and News Digital. general manager of the platform business, That produced record traffic for all the cited the growth in live streaming as one of major news organizations. The CBSN 24-hour the key trends Roku hopes to capitalize streaming news service, for example, on in 2021. racked up a record 28.5 million “On the Roku Channel, streams and 19.5 million we now have over 130 unique viewers on linear channels that are Election Day (Nov. 3) presented in a gridand then beat that like fashion like an mark with 40.9 EPG,” or electronic million streams program guide, and 27.9 million Rosenberg said. unique viewers on “Many folks Nov. 4. expected that In addition to viewership would the pandemic and switch to pure the election driving Fox News saw a dramatic increase in on-demand viewing, viewer interest, streaming of its election coverage. but many viewers are Porter Berry, VP and looking for that lean-back editor and chief of Fox experience. So we are News Digital, noted that seeing that paradigm is being “with 5G and phones and tablets recreated in streaming.” becoming more and more a place to go Such channels are also a key part of the for news and information, video has become push to increase advertising revenue. “We more and more important.” think that advertising has been and will be a That helped fuel record-breaking digital central funding model for the TV ecosystem,” audiences for election coverage, with video Rosenberg said. “TV ad dollars are already starts on Nov. 4 jumping 167%, page views reflowing towards streaming.” rising 249% and time spent viewping up a Rick Cordella, executive VP and chief whopping 312% compared to post-election revenue officer for Peacock, also stressed traffic in 2016, according to Adobe Analytics that live linear TV channels are a central part and Apple News. of the strategy for the direct-to-consumer CNN also had a record-breaking year, with an offering. “We have channels like NBC News average of 215 million monthly unique visitors Now, NBC Sports, etc., in a bunch of different globally in the first 10 months of 2020, up from categories that provide the linear experience 162 million in 2019, and 163 million unique of the multichannel universe that doesn’t visitors in the U.S., according to Comscore. really have much of a place on other premium “2020 was a year like no other for us,” noted video providers,” Cordella said. Wendy Brundige, senior VP of global video at These linear channels have proved CNN. “We had a lot of growth this year on our particularly popular among cord-cutters, he TV app with people wanting to watch on their said, and having linear channels helps freshen connected TV devices.” up the service. “Because the content is Whether news channels can continue these constantly being updated, it feels more vibrant record-breaking patterns into 2021 is an open than other SVODs where what I saw last week is question, given the once in a lifetime stories what I’ll see this week,” he said. – GW that drove traffic in 2020.

14 Multichannel.com

A number of operators are using TiVo’s platform to improve the consumer experience (top). Disney Plus is looking to maintain momentum in 2021 with Marvel offering WandaVision (center). Hulu’s originals like Run (below) helped it hit 38.8 million subs in December of 2020.

David Gandler, co-founder and CEO of FuboTV, noted that “in the first quarter pundits were saying it was all over for virtual MVPDs, but then in the third quarter there was clearly pent up demand for sports” and subscriptions dramatically increased with the return of live sports. “I think that vMVPDs will continue to take share, not only subscriber share from the traditional services, but I think they also start to take significant amount of time share in the video ecosystem and their share will be dramatically higher in 2021 than it was in 2020,” Gandler said, adding that FuboTV subscribers now spend about 120 hours a month on the platform.

I Want My OTT

While operators continue to offer large traditional video packages, they’ve also embraced the idea of creating a variety of new products that include OTT content.


VIEWER WATCH 2021

“Do we want to start teaming up [with] more OTT providers?” Altice USA CEO Dexter Goei said during the company’s Q1 2020 earnings call, reflecting widespread industry sentiment. “Absolutely. We are in all those discussions as you may expect.” “The video business is changing and we are innovating accordingly,” added Jodi Robinson, senior VP of digital platforms at Charter Communications. As part of that effort, Charter has developed lower-cost packages “targeted primarily at customers that are not currently purchasing our traditional video product,” she said. “Going forward, we will offer even more tailored programming packages.” Cox Communications senior VP of marketing operations Kristine Faulkner stressed the importance of rethinking video packages and offering consumers more choices. “We are focused on hitting two primary segments,” she said. “Those are the more traditional sports enthusiasts who want it all and those who are really looking for a better search and discovery experience for their streaming services.” All of this is part of a sea change in the way operators are thinking about their business, TiVo VP of product Chris Thun said. “Several years back, I’d get into religious debates with operators about whether it was really good for operators to combine OTT with linear or should the operator content be in a walled garden,” Thun said. “That phase is gone. I’m never in those debates any more. Everyone has accepted the idea.”

Operators are also looking at video packages as a way to keep broadband customers, which have become the bedrock of their business. “They are saying we have a growing segment that isn’t taking video from us and are broadband-only customers,” Thun said. “That is actually their most profitable segment, and to make it more profitable they want to reduce churn.” This also opens up some opportunities for smaller niche programmers who can attract loyal audiences. “People are looking for brands they value and trust where they can go for news and entertainment,” said Patrice Courtaban, chief operating officer of TV5Monde USA, adding that the premium

Popular UFC programming has helped ESPN Plus beat subscriber projections.

Several years back, I’d get into religious debates with operators about whether it was really good for operators to combine OTT with linear or should the operator content be in a walled garden. That phase is gone. — Chris Thun, VP of product, TiVo

French-language channel saw reduced churn in 2020, increased viewing and more use of the authenticated TV everywhere app. “That is where we can help operators reduce churn.” The explosion of content, though, creates problems for consumers and high levels of churn in the streaming world. “We still see high levels of churn,” Andrew Hare, senior VP of digital research and strategy at Magid, said. “About one in five say they sign up for an SVOD to watch a show and that they intend to cancel after they binge through it. The premiums have always had churn issues, but I think there is now a churn mindset in streaming.”

Churn Busters

To reduce churn and retain customers, pay TV operators and streaming services should try to improve the consumer experience, said Devin Emery, chief product officer and executive VP of content strategy at CuriosityStream. “Making it easier to find content is extremely important to consumers,” he said, adding that “we think our strength is becoming the best portal for factual content.” In general, it’s important to be customerfocused. “One problem the traditional MVPDs have is the poor consumer perceptions they have gotten over the years,” Horowitz’s Waterston said. “Today, the product offering may better conform to what consumers want but the brand perceptions are still there. Nothing is really going to change until they deal with those perceptions and the very real problems they have with customers today.” ●

Multichannel.com

15


VIEWER WATCH 2021

The Multichannel Landscape Total multichannel television households, including virtual multichannel video programming distributors (vMVPDs), will fall to only 61.2 million in 2025, according to projections from Magna. Virtual MVPDs will see a modest uptick to 12.4 million by 2025, while cable subs will drop from 45.7 million in 2021 to 34.9 million in 2025.

TOTAL MULTICHANNEL HOUSEHOLDS

TOTAL TELCO VIDEO SUBS 2018

2018

98.0 93.4

2019 2020

88.7 84.3

2021 2022

79.0

2023

73.1 67.3

2024 2025

61.2

TOTAL CABLE SUBS (Millions of U.S. homes)

2018

50.8

2019

47.4

2021

2020 2021 6.9 5.9

2023 4.9 4.0

TOTAL VIRTUAL MVPDS

40.8 38.0

2024

2018

34.9

2025

2019

TOTAL SATELLITE SUBS 25.6

2019 22.6

2020 2021

20.1 17.4

2022 14.7

2023 12.2

2024 9.9

(Millions of U.S. homes)

2020 29.0

2018 (Millions of U.S. homes)

7.9

2022

2025

43.4

2023

2021 2022 2023

7.7 8.9 9.8 10.6 11.2 11.8

2024

12.2

2025

12.4

SOURCE: MAGNA. Estimates and projections, 2020-2025.

16 Multichannel.com

8.9

45.7

2022

2025

9.7

2024

49.2

2020

10.6

2019

(Millions of U.S. homes)

(Millions of U.S. homes)

(including vMVPDs)


VIEWER WATCH 2021

The Multichannel Business Subscription TV revenue, which peaked at $101.1 billion in 2015, will fall to $81.3 billion in 2021 and further fall to $76.9 billion in 2024, PwC predicts. The sub losses will also hurt multichannel advertising, which is projected to grow from $24.6 billion in 2021 to $26.2 billion in 2024.

U.S. TV SUBSCRIPTION REVENUE

MULTICHANNEL SYSTEM ADVERTISING 4.7

94.3

89.6

4.6

4.6

4.5 3.9

81.6

81.3

4.1

4.2

4.2

4.2

80.8 79.8 79.6

$ billions

$ billions

101.1 100.8 98.5

4.7

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

CABLE NETWORK ADVERTISING 21.1

21.6

21.2

21.7

21.7

21.5

21.5

22.0

25.8 26.3 25.7 26.3 26.2

24.6

25.7 25.6 26.2

22.9

$ billions

$ billions

19.0

20.5

TOTAL MULTICHANNEL ADVERTISING

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

SOURCE: PwC, Global Entertainment and Media Outlook: 2020–2024. Preliminary data for 2019; projections for 2020 to 2024.

18 Multichannel.com


VIEWER WATCH 2021

The Advertising Landscape Digital advertising will be more than four times larger than TV advertising by 2025, when spend on digital will hit $205.8 billion, versus $44.1 billion for TV. Digital video, meanwhile, will rise from $17.1 billion in 2020 to $26.7 billion in 2025.

TOTAL ADVERTISING*

TOTAL TV ADVERTISING*

TOTAL DIGITAL ADVERTISING*

($ billions)

($ billions)

($ billions)

2018

211.6

2018

2019

224.1

2019

2020

221.2

2020

2021

230.3

2021

53.6

2021

55.0

2022

65.1 60.8 55.5

2022

2023

248.9

2023

48.8

2023

51.2

2024

2024

2025

271.1

2025

($ billions)

151.6 164.4 177.1 192.5

2025

44.1

TOTAL SOCIAL MEDIA ADVERTISING*

DIGITAL VIDEO ADVERTISING*

140.4

2020

243.6

265.8

127.6

2019

2022

2024

109.4

2018

205.8

TOTAL MOBILE ADVERTISING* ($ billions)

($ billions)

2018 2019 2020 2021 2022 2023 2024 2025

11.4 2018 14.3 2019 17.1

2020

19.1

2021

21.1

2022

22.8

2023

25.0 26.7

2024 2025

73.2

2018

28.2

92.3

2019

35.6

108.1

2020

41.9

121.1

2021

45.9

136.2

2022

50.8

2023

55.3 61.2 65.5

151.3

2024

168.7

2025

184.4

*Includes cyclical events like the Olympics and political spending. | SOURCE: MAGNA, projections 2021-2025.

Multichannel.com

19


VIEWER WATCH 2021

The Content Game Electronic delivery of home video content continues to grow, hitting $26.2 billion in 2024 for rentals and $6.1 billion for the sell-through sector, according to PwC, while gaming and eSports will top $37.1 billion by 2024.

TOTAL ELECTRONIC VIDEO RENTALS

$ billions

19.2

21.5

22.6

VIDEO GAMES AND ESPORTS

24.7

26.2 31.4

15.2 12.2

25.0 $ billions

6.8

8.4

10.2

18.9

20.7

27.2

33.5

35.2

37.1

29.1

22.7

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

$ billions

ELECTRONIC HOME VIDEO SELL-THROUGH

3.6

3.0

4.0

4.3

4.5

4.8

5.3

5.4

5.8

6.1

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

VIRTUAL REALITY 1581

2015 2016 2017

2018 2019 2020 2021 2022 2023 2024

PHYSICAL HOME VIDEO

1280

$ millions

1058

9.3 8.0

908 739

6.8

586

$ billions

5.8 4.7

439 3.8

3.1

2.6

2.2

1.9

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

236

313

0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

SOURCE: PwC, Global Entertainment and Media Outlook: 2020–2024. Preliminary data for 2019; projections for 2020-2024.

20 Multichannel.com


VIEWER WATCH 2021

The Broadband Landscape Revenue from fixed broadband, which has been a bright spot for cable operators in recent years, will continue to grow, hitting $70 billion in 2024, according to PwC. And the amount of data flowing over broadband networks will continue to skyrocket, from 239.7 trillion Megabytes in 2020 to 391.3 trillion MB in 2024, with much of that — about 331.6 trillion MB — consisting of video.

DATA CONSUMED ON FIXED BROADBAND

INTERNET ACCESS SPENDING 2016

$ billions

2017

128.7 136.1

2015

145.5

2018

159.9

2019

172.4

2020

174.8

2021

2016

2022

195.5 206.6

2023

216.1

2024

FIXED BROADBAND ACCESS SPENDING 2015

$ billions

2016

58.7

2022 2023 2024

$ billions

2019

189.2

2020

239.7 266.2 307.6 349.6

2023

391.3

2024

60.4 61.7 63.6 66.0 68.2

DATA CONSUMED ON FIXED BROADBAND FOR VIDEO

70.0

2015 2016

MOBILE INTERNET ACCESS SPENDING 75.0 80.8 88.4 101.2 112.0 113.1 119.8 129.5 138.4 146.1

2017 2018 MB trillions

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

154.2

2021

55.4

2018

2021

124.0

2022

57.1

2020

97.4

2018

53.7

2017 2019

73.4

2017

183.4

MB trillions

2015

59.8 79.1 101.0 126.6

2019

156.6 199.5

2020

222.9

2021

258.9

2022

295.4

2023

331.6

2024

SOURCE: PwC, Global Entertainment and Media Outlook: 2020–2024. Preliminary data for 2019; projections for 2020 to 2024.

Multichannel.com

21


VIEWER WATCH 2021

The OTT Landscape Subscription video-on-demand revenues will rise to $24.5 billion by 2024, while total revenue from over-the-top sales and subscriptions will hit $30.9 billion in 2024, according to PwC.

TOTAL OTT VIDEO REVENUE

SVOD REVENUE 24.5 23.1 19.9

29.1

21.0 25.4

26.6

22.6

17.6 18.2

$ billions

$ billions

30.9

13.5

14.9

10.5

12.5

8.4

10.4

6.6

8.1

4.9

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

TRANSACTIONAL VOD REVENUE

6.1

5.5

4.5

5.1

5.6 4.6

5.0

3.8

4.8

5.3

3.2

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

5.5

4.7

4.3 4.0 3.6

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

SOURCE: PwC, Global Entertainment and Media Outlook: 2020–2024. Preliminary data for 2019; projections for 2020-2024. Online TV advertising consists of in-stream adverts and reflects revenues from preroll, midroll and postroll ads around TV content distributed by broadcaster-owned websites, according to PwC.

22 Multichannel.com

5.4

$ billions

$ billions

4.2

4.7

ONLINE TV ADVERTISING

6.4


VIEWER WATCH 2021

The Emerging Platform Landscape Consumers report that about 46% of their weekly viewing time is now spent watching subscription VOD, live-streaming or ad-supported VOD services, per survey data from Magid. Only 23% of viewers ages 13-17 say watching shows in real time on broadcast or cable is their preferred way to view video.

SHARE OF VIEWING TIME (% of viewing time in a typical week)

PREMIUM CABLE 6%

MOST POPULAR SVOD SERVICES (% of respondents 18 years and older who said someone in their household subscribed to a service)

NETFLIX

AVOD 7%

53% 36%

AMAZON PRIME VIDEO

31%

HULU

BROADCAST 28%

LIVE STREAMING 10%

26%

DISNEY PLUS HBO MAX

11%

APPLE TV SVOD 29%

CABLE 20%

LIVE AS IT AIRS ON BROADCAST, CABLE OR SATELLITE TV NETWORKS

23% 18% 27%

25-49

50%

7%

CBS ALL ACCESS

7%

STARZ

5%

PEACOCK

4%

SHOWTIME

4%

PLUTO

16%

ROKU

15%

PEACOCK

15%

13-17

58%

18-34

61% 50% 31%

12% 10%

VUDU

9%

IMBD TV

STREAMING ON ANY DEVICE

25-49

14%

CRACKLE 64%

65+

65+

ESPN PLUS

TUBI

50-64

50-64

7%

(% of respondents 18 and older who used service)

(Most popular platform for watching TV content)

18-34

YOUTUBE PREMIUM

MOST POPULAR AVOD SERVICES

PREFERRED WAY TO VIEW VIDEO 13-17

9%

5%

YAHOO VIEW POPCORNFLIX

4%

KODI

4%

XUMO

4%

KANOPY

3%

16% SOURCE: Magid, The Video Entertainment Pulse Study — March & October 2020, a nationally representative online survey of 2,400 online users aged 13 and older.

Multichannel.com

23


VIEWER WATCH 2021

The Multichannel, Multi-Device Landscape African-Americans are more likely to have a multichannel subscription than consumers overall, but consumers in that demographic also subscribe to streaming services at higher rates, according to Horowitz Research.

ELECTRONIC DEVICES AND SERVICES (% with service or device)

TRADITIONAL MULTICHANNEL SUBSCRIPTION

vMVPD SUBSCRIPTION

(Respondents 18-plus who agreed)*

TOTAL

81%

TOTAL

22%

AFRICAN-AMERICAN

82%

AFRICAN-AMERICAN

22%

77%

HISPANIC

80%

ASIAN-AMERICAN

CABLE TV SUBSCRIPTION 42%

TOTAL

50%

AFRICAN-AMERICAN

43%

HISPANIC

47%

ASIAN-AMERICAN

SATELLITE TV SUBSCRIPTION 20%

TOTAL AFRICAN-AMERICAN

15%

ASIAN-AMERICAN

13%

19%

TOTAL AFRICAN-AMERICAN HISPANIC ASIAN-AMERICAN

17%

ASIAN-AMERICAN

70%

HISPANIC

HAS A TV ANTENNA TOTAL

14%

38% 40% 44%

HISPANIC

36%

WATCHED AN SVOD SERVICE IN LAST MONTH

53%

TOTAL

72%

21%

TOTAL

HISPANIC

60%

HISPANIC

54%

69%

WATCHED A TV EVERYWHERE SERVICE IN LAST MONTH AFRICAN-AMERICAN

ASIAN-AMERICAN

58%

THE MEDIA PLAYS A VERY BIG ROLE IN REINFORCING STEREOTYPES AFRICAN-AMERICAN

63%

HISPANIC

63% 65%

ASIAN-AMERICAN

63%

LGBTQ

67%

ASIAN-AMERICAN

59%

64%

65%

HISPANIC

19%

LGBTQ

36%

73%

ASIAN-AMERICAN

AFRICAN-AMERICAN

ASIAN-AMERICAN

72%

AFRICAN-AMERICAN

AFRICAN-AMERICAN

WATCHED AN AVOD SERVICE IN LAST MONTH TOTAL

68%

TOTAL

51%

AFRICAN-AMERICAN HISPANIC

ASIAN-AMERICAN

TELCO TV SUBSCRIPTION

19%

PEOPLE LIKE THEM ARE NOT REPRESENTED ENOUGH IN U.S. TV SHOWS AND MOVIES

STREAMS VIDEO WEEKLY

AFRICAN-AMERICAN

19%

HISPANIC

25%

HISPANIC ASIAN-AMERICAN

MULTICULTURAL VIEWS OF DIVERSITY

19% 20% 14%

IT IS IMPORTANT THE MEDIA MAKE A CONCERTED EFFORT TO BUST STEREOTYPES 81%

AFRICAN-AMERICAN HISPANIC

74%

ASIAN-AMERICAN

72%

LGBTQ

71%

* Percent of respondents who answered 4 or 5 when asked how they felt about a statement on a scale of 1 to 5, with 5 as strongly agree. | SOURCE: Horowitz Research, State of Pay TV, OTT and SVOD, 2020 and State of Viewing and Streaming, 2020.

24 Multichannel.com


VIEWER WATCH 2021

The Cord-Cutting Landscape In 2011, less than 2% of all pay subscribers told Magid researchers they planned to get rid of their pay TV subscription. Today, that figure stands at 9.1% while Horowitz Research reported that more than half of households (58%) subscribe to an SVOD service and a vMVPD.

ATTITUDES TOWARDS CORD-CUTTING

HOW CONSUMERS MIX MVPD AND OTT**

(Share of pay TV subs 18-64 who say they are extremely likely to cancel their pay TV subscription in the next 12 months and not get another one)

(Share of respondents 18-plus who view content)

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

1.9% 2.2% 2.7% 2.9%

NO SUBSCRIPTIONS 5% 3.8%

STREAMING ONLY 14%

5.7% 6.1%

7.9% 8.8% 9.1%

SOURCE: Magid, The Video Entertainment Pulse Study—March & October 2020, a nationally representative online survey of 2,400 online users aged13 and older.

MVPD ONLY 23%

HAVE MVPD & STREAMING SUBSCRIPTIONS 58%

USE OF VIDEO SERVICES (Share of respondents 18-plus who view content)

81%

MVPD SUBSCRIBER

70%

SVOD SUBSCRIBER VIRTUAL MVPD SUBSCRIBER ANTENNA USER FREE OTT USER NETFLIX, HULU OR AMAZON PRIME VIDEO SUBSCRIBER

COMMON COMPLAINTS ABOUT STREAMING

29% 32% 52%

(Share of respondents 18-plus who view content)

62%

64% 51%

THE CORD LANDSCAPE

**

48%

45%

43%

(Share of respondents 18-plus who view content)

CORD-NEVERS 4%

CORD-LOYAL 53%

CORD-CUTTERS 14%

CORD-RETURNERS* 28%

Would like all their streaming services managed through a single provider

Too many streaming services

Can’t search across all streaming services

Hard to know which shows are on which services

Hard to keep track of how much they pay for all the services

* Cord-returners currently have an MVPD subscription, but did not have one at some point in the last 10 years. | ** Percentages may not add to 100 because of rounding. SOURCE: Horowitz Research, State of Pay TV, OTT and SVOD, 2020 and State of Viewing and Streaming, 2020.

Multichannel.com

25


FATES & FORTUNES

People Notable executives on the move BRIEFLY NOTED Other industry execs making moves

ASG

COOLEY

COX

CURIOSITYSTREAM

Media tech and engineering firm Advanced Systems Group has added Tim Cuthbertson as director of cloud production. The 30-year industry veteran was most recently managing director at Pixit Media USA.

Cooley added Tiana Demas as a partner in its cyber/data/privacy practice. She was Deputy U.S. Attorney for the Eastern District of New York and associate general counsel of cybersecurity and investigations at Facebook.

Connie Walters has been named VP of employment law for Cox Communications parent Cox Enterprises in Atlanta. She was assistant general counsel of employment at Cox Automotive.

Brandon Fong was named senior VP and head of North American distribution at CuriosityStream. He comes from STX Entertainment, where he was senior VP of digital business development.

DISCOVERY

FRONTIER

THEGRIO.TV

JIM HENSON

Robert L. Johnson has joined Discovery’s board of directors, replacing the departing Decker Anstrom. Johnson is the founder of BET Networks and the founder and chairman of RLJ Cos.

Frontier Communications has named Nick Jeffery as its president and CEO, effective when Bernie Han steps down from that position on March 1. Jeffery had been CEO of Vodafone UK.

TheGrio.TV has added April Ryan as White House correspondent and Washington, D.C., bureau chief. Ryan was Washington bureau chief for American Urban Radio Net­­works and a CNN contributor.

The Jim Henson Co. has added Sidney Clifton as senior VP, animation and mixed media, overseeing live-action and hybrid projects. The veteran producer won an Emmy for Cartoon Network’s Hellboy.

PBA

SCRIPPS

SCRIPPS

SMITHSONIAN

Public Broadcasting Atlanta (PBA) has tapped Jennifer Dorian as the organization’s new president and CEO. Dorian is a 20-year veteran of Turner, most recently in the role of general manager at TCM.

Jonathan Katz was named chief operating officer and head of entertainment for E.W. Scripps Co.’s national television networks business, consisting of Ion Media, Katz Networks and Newsy. He was head of Katz Networks.

Jason Combs was elevated to chief financial officer at the E.W. Scripps Co., succeeding national networks chief Lisa Knutson in that role. He had been the company’s VP of financial planning and analysis.

James F. Blue III has been named senior VP and head of Smithsonian Channel. Blue, who was a producer at PBS NewsHour, will also oversee all factual unscripted content for MTV Entertainment Group’s brands.

26 Multichannel.com

Ad agency DDB Worldwide has named Nikki Lamba as global head of diversity and inclusion. She was a senior director at Catalyst. … The Walt Disney Co. has named Alan Bergman as chairman, Disney Studios Content, and Alan Horn as chief creative officer, Disney Studios Content. The two executives had been co-chairmen of the Studios group since May 2019. … InterMedia Group of Cos. has named Michael Walters as VP, marketing and sales. He had been VP, West Coast sales at iSpot.tv. … James Peck was named CEO of NielsenIQ upon the sale of the former Nielsen Global Connect business to Advent International. He is former CEO of TransUnion. … Omnicom Group has named Emily K. Graham chief equity and impact officer and senior VP, diversity and inclusion communications. She had been chief diversity and inclusion officer at FleishmanHillard. … Beatrice Springborn was named president of Universal Content Productions, where she will oversee all aspects of original content production. She comes from Hulu, where she was VP, content development.


DATA MINE

Data provided by

Ad Meter Who’s spending what where

PROMO MOJO Our exclusive weekly ranking of the programming that networks are promoting most heavily (Dec. 28-Jan. 3)

BIG SPENDERS

MOST-SEEN TV ADS

Brands ranked by the greatest increase in TV spend (Dec. 28-Jan. 3)

Brands ranked by TV ad impressions (Dec. 28-Jan. 3)

1 Nutrisystem

1

GEICO ▲ 413%

Spend Increase:

$7.1M

Est. TV Spend:

28%

Interruption Rate:

Top Network:

CBS

Top Show:

▲ 366%

$5.9M

Est. TV Spend: Spend Within Industry:

24% ESPN

Top Network:

3

Est. Media Value: $3,564,334

VH1

Estimated media value of in-network promos With 453.8 million TV ad impressions, a VH1 promo for RuPaul’s Drag Race takes first place. Broadcasters grabbed the next three slots: NBC for Ted Danson vehicle Mr. Mayor in second; Fox for Mayim Bialik sitcom Call Me Kat in third; and ABC giving some love to The Bachelor in fourth. Closing out the top five: a TBS promo for Go-Big Show, an unconventional talent competition featuring Snoop Dogg, Rosario Dawson, Jennifer Nettles and Cody Rhodes as judges. The Kat spot has the week’s highest iSpot Attention Index number (121), meaning viewers were on average highly likely to watch it all the way through (vs. interrupting it by changing the channel, pulling up the guide, fast-forwarding or turning off the TV).

28 Multichannel.com

TV Ad Impressions:

1.6B $31.6M

Est. TV Spend:

2.85%

Interruption Rate:

Top Show: Allstate Sugar Bowl

3

Dr Pepper

Total TV ad impressions within all U.S. households, including national linear (live and time-shifted), VOD plus OTT and local

NFL Football

Allstate

Spend Increase:

TV Ad Impressions: 453,823,103

2.78%

2

Ally Bank

TOP 5 PROMOTIONS

2.2B $45.9M

Est. TV Spend:

Spend Within Industry:

2

RuPaul's Drag Race, VH1

TV Ad Impressions:

Liberty Mutual

Spend Increase:

▲ 278%

TV Ad Impressions:

Est. TV Spend:

$10.5M

Est. TV Spend:

Spend Within Industry:

76% ESPN

Top Network:

1.5B $13.7M 2.25%

Interruption Rate:

Top Show: America’s Newsroom

1. RuPaul's Drag Race, VH1 TV Ad Impressions  Est. Media Value 

2. Mr. Mayor, NBC

TV Ad Impressions  Est. Media Value 

3. Call Me Kat, Fox

TV Ad Impressions  Est. Media Value 

4. The Bachelor, ABC TV Ad Impressions  Est. Media Value 

5. Go-Big Show, TBS

TV Ad Impressions  Est. Media Value 

453,823,103 $3,564,334

4

4

Coors Light 416,648,344 $5,204,024 353,972,365 $3,342,336 294,970,489 $4,160,434

Progressive ▲ 235%

Spend Increase:

$3.4M

Est. TV Spend: Spend Within Industry:

ESPN

Top Network:

5

$3.3M

Spend Within Industry: Top Network:

$35M

Est. TV Spend:

2.35%

Interruption Rate:

NFL Football

Top Show:

Domino’s ▲ 219%

Est. TV Spend:

1.3B

5

Colonial Penn Spend Increase:

294,234,121 $3,239,602

10%

TV Ad Impressions:

20%

USA Network

TV Ad Impressions:

$15.9M

Est. TV Spend: Interruption Rate: Top Show:

1.27B 1.96%

College Football


DATA MINE

IS THE PEACOCK BUSINESS MODEL NOW DRIVEN BY ‘THE OFFICE?’ HOW FOUNDATIONAL IS The Office to Peacock? Let’s just say that the streaming service’s entire pricing model seems based on this hit show, which migrated from Netflix to Peacock after NBCUniversal paid $500 million to spirit away exclusive streaming rights. As the Peacock ad shows below, users of the free, ad-supported iteration get to watch seasons 1 and 2 of The Office, which was a top five asset on Netflix up

until Dec. 31, when it left the platform. Subscribers to Peacock’s $4.99-a-month tier, meanwhile, get to “unlock” all nine seasons and 201 episodes of The Office, with limited ads. And those who pony up for the $9.99 “premium” version get the entire Office kingdom without commercials. — Daniel Frankel For more stories like this, go to nexttv.com.

MCN’S MOST VIEWED Top stories on multichannel.com, Dec. 21, 2020-Jan. 6 1. ‘Rizzoli & Isles’ Starts on Start TV Jan. 4 2. New Bill Would Finally Make Illegal Streaming a Felony 3. Verizon Warns Viewers Hearst Signals Could Come Down 4. Discovery Plus Launches Monday with Full Major Platform Support 5. Cable One to Launch IPTV Offering To read these stories, go to multichannel.com.

STICKIEST SHOWS Top 10 cable programs ranked by viewer engagement Ratings Rank

Telecast (Week Ending Dec. 27, 2020)

Network

Stickiness Index*

1

2

NFL Football

NFL Network

158

2

1

Monday Night Football

ESPN

146

3

42

90 Day Fiancé

TLC

144

4

139

The Real Housewives of Potomac

Bravo

143

5

41

The Curse of Oak Island

History Channel

141

6

715

La Rosa de Guadalupe

Galavisión

140

7

524

The Baby Stealer

LMN

138

8

4

NBA Basketball

TNT

134

9

81

Tyler Perry's Sistas

BET

133

10

105

Holiday Baking Championship

Food Network

132

Stickiness Rank

Start TV; Peacock; Monday Night Football: Jamie Sabau/Getty

*

The Stickiness Index looks at viewer engagement based on several factors. A higher number indicates more of the audience is tuned in for the duration of the telecast. * TV Engagement ratings powered by Comscore’s TV Essentials. (Sorted by social media activity.)

Multichannel.com

29


DATA MINE

Data provided by

STICKIEST SHOWS Top 10 broadcast programs ranked by viewer engagement

*

Ratings Rank

Telecast (Week Ending Dec. 27, 2020)

Network

Stickiness Index*

1

80

Todo Por Mi Hija

Telemundo

150

2

1

Sunday Night Football

NBC

148

3

71

Vencer el Desamor

Univision

144

4

76

Imperio De Mentiras

Univision

141

5

79

Dulce Ambición

Univision

140

6

13

The Bachelorette

ABC

131

7

21

NCIS: New Orleans

CBS

124

8

11

Let's Make a Deal

CBS

123

9

129

El Asesino Solitario

UniMás

122

10

105

Falsa Identidad

Telemundo

121

Stickiness Rank

The Stickiness Index looks at viewer engagement based on several factors. A higher number indicates more of the audience is tuned in for the duration of the telecast. * TV Engagement ratings powered by Comscore’s TV Essentials. (Sorted by social media activity.)

THE WEEK OF DEC. 28, 2020 TV Time users track the shows they’re watching on TV via the TV Time app. That data is then used to determine the most-binged shows of the week in the U.S.

1

Cobra Kai

Share of binges: 4.66%

2

Bridgerton

Share of binges: 3.36%

3

Chilling Adventures of Sabrina

Share of binges: 3.19%

4

Schitt's Creek

Share of binges: 1.92%

5

Grey's Anatomy

Share of binges: 1.24%

LAST WEEK: —

LAST WEEK: —

LAST WEEK: —

LAST WEEK: 1

LAST WEEK: 3

6

LAST WEEK: 7

7

LAST WEEK: 2

8

LAST WEEK: 6

The Bachelorette: Craig Sjodin/ABC

9

LAST WEEK: —

10

LAST WEEK: 8

Criminal Minds

Top five stories on nexttv.com, Dec. 21, 2020-Jan. 6

The Mandalorian

Share of binges: 1.11%

1. Comcast to Integrate Disney Plus and ESPN Plus into X1 and Flex

Supernatural

Share of binges: 0.90%

2. New Bill Would Finally Make Illegal Streaming a Felony

Letterkenny

Share of binges: 0.87%

3. Discovery Plus Launches Monday with Full Major Platform Support

Share of binges: 0.83%

4. Rich Greenfield Urges Investors to Sell ‘Money-Losing’ FuboTV

The Office

Networks reflected don’t include every viewing platform available nor total viewing in share of binge

30 Multichannel.com

Share of binges: 1.22%

NEXT TV’S MOST VIEWED

5. HBO Max Comes Back From the Dead To receive “The Binge Report” and otherTV Time reports, visit https://www.whipmedia.com/subscribe/

To read these stories, go to nexttv.com.


DATA MINE

Multichannel.com

31


VIEWPOINT

By Liliane Offredo-Zreik @offredo

Broadband Networks: Predictions for 2021 A look at the year that was, and what to expect going forward

T

he year 2020 was like no other. The pandemic drove an unprecedented acceleration of digital enablement, as companies and organizations of all types adopted virtual substitutions to in-person experiences, such as remote work, online education and tele­ health. This drove a massive consumption of bandwidth, upstream and downstream, and led cable operators to add 1.32 million subscribers in third-quarter 2020 alone. Due to the short-term circumstances, some broadband service providers — more specifically, cable operators — had to temporarily put aside their longer-term plans, such as virtualization and the re-architecture of the access network, and use more traditional tools to add capacity. The massive need for upstream capacity has prompted operators to reconsider the tools in their arsenal, such as mid-split, which allocates 85 megahertz of spectrum to upstream, and high-split, which allocates up to 204 MHz but may require the spectrum to be extended to 1.2 GHz to preserve downstream capacity. Another technology that received renewed attention in 2020 is orthogonal frequency division multiple access, which is part of the DOCSIS 3.1 specifications and improves spectral efficiencies, resulting in added capacity. Although the level of growth will taper off this year, high levels of bandwidth consumption will continue as some of the digitally enabled business models persist and evolve. For example, many companies will retain some version of flexible work arrangements, and some predict that about 20% of remote work will never return to in-person. In health care, limits on in-person treatment drove almost a fivefold increase in tele­ health. Health-care regulation is expected to continue to be relaxed in 2021, and telehealth utilization is expected to grow as the industry evolves toward more comprehensive virtual care modalities that include solutions such as remote patient monitoring and age in place. 32 Multichannel.com

Among the technologies expected to gain traction in 2021: Mid-split and high-split: The trend that started in 2020 will continue, as the need for capacity bandwidth in the upstream will exceed the capacity of most existing cable access infrastructures. Low-latency DOCSIS: More applications, such as gaming, are demanding latency as low as 5 to 10 milliseconds. New applications are emerging where continuous remote health monitoring of patients in their homes, complemented by real-time remote data analytics that inform medical treatment, may also require low-latency data in the near future. Furthermore, augmented reality and virtual reality (VR) applications are increasingly finding important applications in medicine. For example, at Cedars-Sinai Hospital in Beverly Hills, a study is focused on using VR for a non-drug approach to treating lower back pain. Distributed Access Architecture (DAA): DAA took a relative backseat in 2020 as operators used largely proven methodologies to meet capacity demands. However, continuing to add capacity with node splits and more hardware in the headends is not sustainable over the long term. Therefore, DAA remains the most viable architecture, with fiber moving ever closer to the customer. Virtualization and cloud native implementations: As operators raced to meet the capacity surge, a clear shortcoming they faced was their inability to elastically scale capacity with demand. If the level of demand does not sustain at the level for which they planned, some of the capacity

Liliane Offredo-Zreik is a principal analyst at ACG Research.

The massive need for upstream capacity has prompted operators to reconsider the tools in their arsenal.

added will not be utilized, resulting in stranded capital. One of the main advantages of virtualization is the velocity and flexibility that operators gain in introducing new services and features, in scaling capacity with demand, and in gaining more visibility into their networks, leading to fault mitigation and better reliability. The move toward a virtualized headend, already under way, will continue and even gain momentum as operators exit firefighting mode. DOCSIS 4.0: As demand for upstream bandwidth continues to grow, operators will need capacity beyond mid-split and even high-split. The DOCSIS 4.0 specifications, released in early 2020, enable operators to increase upstream capacity to 6 gigabits per second. While field implementations of DOCSIS 4.0 are still years out, operators have two approaches to consider and plan for: Extended Spectrum DOCSIS, which involves increasing the highest plant frequency from 1.2 GHz to 1.8 GHz and later to 3.0 GHz; and Full Duplex DOCSIS, which works within 1.2 GHz using overlapping frequencies for upstream and downstream but may impose restrictions on the number of amplifiers and other legacy equipment between the node and the subscriber. Passive Optical Networks (PON): Another approach that operators are considering for achieving 10G capacity is fiber-to-the-premises implementations via PON solutions, which allows them to build on their hybrid fiber coaxial (HFC) investments to deliver even higher speeds. New solutions enable them to support HFC and PON with the same headend infrastructure. WiFi 6 and 6E: The need for more capacity and performance will continue to drive deployments of WiFi 6, and as WiFi 6E is introduced in 2021, which delivers even more capacity, operators will start supporting the new technology. Automation: The recent pandemic, social-distancing requirements, and increasing network complexity (such as DAA deployments and 5G backhaul densification) will drive operators to implement more automation in the networks.

New Business Models Explored

As bandwidth consumption shifts to homes and other locations, and as bandwidth is increasingly used to replace in-person activities, new frameworks around who pays for broadband will start to be explored. As digital enablement accelerates, companies in many verticals and consumers in their homes will need increasingly complex applications. Delivering connectivity, while essential, will no longer be sufficient. Offering complex solutions that include connectivity, computation, automation and generic and vertical-specific application modules will emerge; service providers have the opportunity to play a major role in this emerging area. However, this will require investments, new partnerships and innovative business models. ●


THE FIVE SPOT

Mike O’Donnell

Chief Revenue Officer of Platform Business, Vizio Connected TV pioneer helps set maker get into the addressable ad game

T

he connected TV ad market is hot right now, but Mike O’Donnell, chief revenue officer of platform business at Vizio, was early to the party. After starting his media career in print, O’Donnell in 2011 joined YuMe, which was doing desktop video ads. YuMe expanded into mobile and then was one of the first to do internet-connected TV, making deals to help LG and Samsung monetize smart TV-set home screens by selling ads. O’Donnell moved to interactive advertising company Connekt in 2017. Connekt worked with LG, and O’Donnell pitched Vizio CEO William Wang. When Vizio decided to get into the platform business, Wang brought O’Donnell in to set up a direct sales team. Last year the company launched Vizio Ads and O’Donnell now oversees all of Vizio’s platform business, including its SmartCast content relationships, ad sales and data partnerships. He also oversees Project OAR, the consortium looking to standardize addressable TV. O’Donnell spoke with Multichannel News senior content producer Jon Lafayette. An edited transcript follows. What should advertisers jumping into connected TV know about how it’s different from traditional TV? Where the CTV marketplace is really accelerating is around the addressable side of the business. The ability to attach data will drive more addressable buys on the television screen. TV is still the biggest, best screen in the

Vizio

Mike O’Donnell (r.) rides herd over all aspects of Vizio’s platform business.

34 Multichannel.com

household for all your key branding metrics, specifically with video. As you can layer on more addressability to it, I think there’s a great value proposition for the marketplace, and we’re seeing that. Vizio recently made a deal to get its advertising measured by Nielsen. Will that help get more TV dollars to shift to CTV? We’re still in the process of the integration with Nielsen. As brands have the ability to look into the streaming world with an easy comparison to what they’re buying on television on a reach and frequency basis, it will definitely help the business. We’ve seen that work for other players in the space. What’s the first thing on your agenda for 2021? My focus is on the best possible experience for consumers. That means constantly deepening our relationships with networks, agencies, brands and content providers and working with them all to develop next generation ad experiences. We are evolving some of our ad product offerings to make it easier for brands to move dollars back and forth between linear and streaming. And we’ll be introducing more ways for brands to measure the effectiveness of TV advertising and better manage and optimize how often an ad reaches a consumer, for instance. What do you expect companies you work with will be asking for in 2021? Everyone wants to reach consumers in new ways, and as the primary device for shared

BONUS FIVE TV shows on your watchlist? Just finished The Queen’s Gambit and The Last Dance — both great. Yellowstone is next up on the list. All-time top TV show? The Wire. Destinations on your bucket list? Italy with my family and can’t wait for the opportunity to get back to Ireland for some golf. Books on your nightstand or e-reader? Just finished The Algebra of Happiness and Post Corona by Scott Galloway. Recent memorable meal? It was the last time my whole extended family was together — a big BBQ. We like to do a giant family barbecue every year. We didn’t get to do it this year.

entertainment experiences, we are bridging the requests of consumers and programmers, advertisers and technology innovators. It’s a unique business. People also know we have unlocked a lot of innovation with [data subsidiary] Inscape, which makes a lot of things possible that weren’t even two years ago. We are leveraging Inscape to improve standards: better targeting, measurement and reporting. The biggest ask is for us to improve advertising, not just between linear breaks, which we do very well, but in the search and discovery process. How has the pandemic affected how you work? Honestly, this work from home scenario has been good because I spend a lot of time on the road normally. So I’ve been able to spend a lot of time with my children. They’re young. I just started playing Xbox with my son and I realized the games are supercomplicated and he beats me a lot. He crushes me. We’re playing NBA 2K and Madden. But those things are fun. ●


9000

Profile for Future PLC

Multichannel News - January 11, 2021  

Multichannel News - January 11, 2021

Multichannel News - January 11, 2021  

Multichannel News - January 11, 2021