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Deutschland 83, the first-ever German-language drama series to air on a major US network

THE NEW PAY-TV LANDSCAPE

OTT: so much to choose from As MIPCOM Into The Stream conference sessions will explore, there’s no question that the surging popularity of the OTT services is bringing pressure to bear on the traditional broadcast model. But this is a cloud with a definite silver lining, writes Juliana Koranteng

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REMANTLEMEDIA International (FMI), Lionsgate and Sony Pictures Television (SPT) are among the growing number of content creators and distributors that are welcoming the highly disruptive but fast growing internet-delivered over-the-top (OTT) TV entertainment. Jens Richter, FMI’s CEO, believes OTT technology’s ability to open new subscriptionfunded video-on-demand (SVOD) businesses in the estimated $290bn global TV market is spurring rights-owners to be more inventive in how they license their intellectual properties. “We embrace the new client base and new exploitation windows,” he says. “You have to try

and reinvent yourself all the time. So, for us, the big challenge is how we build brands in the fragmented [media] future. To stand out, we need to be very original and loud. We need to be on our toes, because a hit or a miss now takes place faster compared to the old days.”

“The big challenge is how we build brands in the fragmented future. To stand out, we need to be very original and loud” Jens Richter

FMI’s international OTT SVOD portfolio includes The Returned, FremantleMedia North America’s adaptation of the French supernatural thrillers Les Revenants as an original international Netflix series. This follows a multi-year VOD agreement to supply content to Youku Tudou, China’s leading video-sharing platform, which includes 200 million mobile subscribers among its viewers. The OTT platforms are also opening up new opportunities for testing maverick or niche concepts. Richter is adamant that the recent success of the German-language event drama Generation War on Netflix influenced pay-TV service Sundance TV’s decision to screen Deutschland 83, the first-ever

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Feature German-language drama series to air on a major US network. Furthermore, the live binge-viewing phenomenon kick-started by House Of Cards on Netflix is influencing how the linear networks schedule their programmes. “When they air entertainment during primetime, they do something that’s an event and live — something viewers feel they have to see now,” he says. This view is supported by a comment made in the most recent Outlook report by accountancy conglomerate PwC: “One of the clearest shifts is in TV and video consumption, with consumers increasingly demanding highquality original programming in a flexible, on-demand manner across numerous devices, thus enabling ‘binge viewing’ and greater convenience. OTT services offer the best outlet for this type of consumption.” Thomas Hughes, Lionsgate’s executive vicepresident of worldwide digital distribution, sees the SVOD streaming platforms as a welcome addition. “We benefit whenever new players emerge with big appetites for content,” Hughes says. “The new digital platforms continue to expand our universe of buyers and create price competition for our product in markets where little or no competition previously existed.” And business is booming, Hughes reports: “Last year, we distributed nearly 2,000 hours of programming around the world — nearly five times as much as we distributed a few years ago. No matter who wins [in the pay-TV race], they will need the kind of premium content that Lionsgate produces.”

Comedians In Cars Getting Coffee, executive produced and starring Jerry Seinfeld

“Sling TV’s target market is the younger generations who love TV but dislike the existing pay-TV model” Roger Lynch Streaming platforms are boosting the overall pay-TV market, says Andy Kaplan, SPT’s president of worldwide networks. “Many consumers using these streaming platforms are supplementing their existing pay-TV service rather than replacing it,” he says. “It’s an opportunity for people to come into shows in later seasons where that opportunity was more limited in the past.”

Sling TV, the OTT service recently launched by US satellite TV giant Dish

The new streaming services are also luring big entertainment names into arenas that never existed in the linear-TV space, offers Eric Berger, SPT’s executive vice-president of digital networks and general manager of the SPTowned AVOD platform Crackle. Available in 21 countries, Crackle is already famous for Comedians In Cars Getting Coffee, the entertainment show executive produced and starring Jerry Seinfeld. The show is now in its sixth season. Meanwhile, Hollywood stars Dennis Quaid, Kate Bosworth and Cary Elwes star in Crackle’s first one-hour drama series, The Art Of More. Among the platform’s new slate of movies is Joe Dirt 2: Beautiful Loser, which stars US actor/comedian David Spade. For Berger, the streaming VOD format also enables content producers to target demographics in sophisticated ways never considered before. “The majority of Crackle viewers are young adults in the prime of building their careers,” he says. “We’ve identified this demo as ‘rechargers’, who frequently stream movies and TV shows to recharge after a busy day.” The SVOD network operators are growing competitive about what they can do for content-owners. Already in some 60 countries, Netflix has ambitions to be in almost 200 by next year’s end. It has publicly declared that it plans to spend $600m on marketing its brands, $500m on technology development and $3bnplus on content in 2015 alone. The company and its CEO Reed Hastings are blatant about why OTT works. The Netflix Long Term View statement reads: “People still watch over a billion hours a day of linear

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BT’s Delia Bushell

FMI’s Jens Richter

Lionsgate’s Thomas Hughes

SPT’s Andy Kaplan TV. But people don’t love the linear-TV experience. While still popular, the linear-TV channel is ripe for replacement.” Sling TV, the OTT service recently launched by US satellite TV giant Dish, wants to bring young audiences to its existing content suppliers. “Our target market is the younger generations who love TV but dislike the existing payTV model,” says CEO Roger Lynch. “Sling TV gives its programming partners access to an audience they aren’t currently reaching.” But for that approach to be viable, Sling TV accepts that its young OTT audience will want access to other streaming services. “We see the future of television as analogous to a puzzle,” Lynch adds. “We want Sling TV to be a big, important piece of the puzzle, but we recognise it’s not the only piece. Many consumers will subscribe to several complementary OTT services to meet their entertainment needs.” Now TV is the UK-based OTT venture launched by the Rupert Murdoch-controlled Sky, Europe’s largest pay-TV operation. The move strengthens Sky’s presence in the UK’s quad-play (TV, telephony, mobile, broadband) market. More significantly, Gidon

BT’s John Petter

Sling TV’s Roger Lynch

Katz, director of Now TV, says the company is “growing the whole pay-TV market”. In the past two years, he reports that 90% of Now TV’s customers have been totally new to the service, rather than converted Sky customers. And there are also those who take both Now TV and Sky. “But OTT also broadens the type of content we can market,” Katz adds. “It means we can put more money behind content that Sky would not normally market.” Now TV’s growth has intensified the heated rivalry between Sky and BT Group, the UK’s largest telecoms operator, which has also been making headway in the quad-play sector, especially in mobile and pay TV via its OTT platform BT TV. BT Group has made a £12.5bn takeover bid for EE, the UK’s largest mobile operator, as part of its mission to boost its multiplatform credentials for BT TV. While Sky has become the UK’s second largest broadband operator after BT, BT TV has successfully chased after some of the most coveted live and VOD rights to sports (eg, UEFA Champions League) and entertainment (dramas including Mad Men and The Walking Dead from US cable network AMC). It has also launched Europe’s

SPT’s Eric Berger

first ultra-HD sports channel. In the UK’s pay-TV space, however, BT claims that Sky’s dominance with a 64% share of the revenues is unfair and has asked Ofcom, the country’s telecoms regulator, to investigate. John Petter, chief executive of BT’s consumer division, says: “Spending a lot of money has been necessary but insufficient against Sky, which passes the cost of its expensive rights to its customers, which is why we need the regulatory underpinning by Ofcom”. “This is about consumers paying more than they need to,” adds former Sky executive Delia Bushell, managing director of BT TV and Sport. “And we’re asking Ofcom to look at the evidence.” The Sky-BT TV clash is an example of the intense competition within the SVOD industry. That scenario also explains why SPT’s Crackle opted for the ad-funded VOD model. This offers viewers a free alternative to paid-for SVOD. As Crackle’s Eric Berger says: “There are only so many services consumers will be willing to pay for as they put together their own bundles. But there will always be room in people’s personal bundles for a service that delivers high-quality movies and TV for free.”

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THE NEW PAY-TV LANDSCAPE

OTT: the growth curve It’s tempting to describe the number of OTT services being launched internationally as excessive. But as old-school TV viewing declines, some claim the OTT operators are singlehandedly responsible for encouraging cord-cutting millennials to stay glued to the box. Juliana Koranteng reports

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NTERNET-delivered Netflix, Hulu and Amazon Prime Instant Video have become established US entertainment brands by successfully challenging the traditional TV terrestrial broadcasters, and cable and satellite operators. And ever since, an avalanche of more digitally connected, subscription-funded VOD (SVOD) services have announced their entry into the global pay-TV market. “Exploration and real intent to deploy OTT is at a fever pitch and only gaining stream from the widest array of content and media companies,” says Jay Samit, CEO of US-based

“There have been three responses to OTT from payTV operators: set up a rival service, do nothing yet or partner with SVOD players” Simon Murray

SeaChange, a technology company working with on-demand and multi-screen TV and video platforms that reach more than 50 million pay-TV subscribers and homes worldwide. “It’s a trend among subscription content-owners, networks, mobile carriers and service-providers alike.” OTT TV resonates with internet-connected viewers, especially young millennial digital natives, because of its convenient subscription model. Unlike the expensive and cumbersome contracts enforced by closed-cable and satellite platforms, with their dedicated set-top boxes, digital video recorders and bundles of channels you may never want to watch, OTT SVOD services need no contract, offer payas-you-go pricing models and require only a broadband connection via any internet service provider (ISP). The shows can be accessed through a variety of broadband-connected devices: video-game consoles, PCs, laptops, iOS and Android tablets, smartphones and dedicated gadgets such as Roku set-top boxes and Apple TV boxes.

OTT ON THE MOVE AS A global business, OTT SVOD is still at the embryonic stage. But the growth rate is astonishing and impacting on the legacy pay-TV operations. Digital TV Research predicts that revenues from OTT live TV and VOD services will yield $51.1bn by 2020, compared to the $26bn forecast for this year and the $4.2bn generated in 2010. Revenues from OTT SVOD (as opposed to advertising-funded and other VOD) are expected to account for $21.6bn by 2020 and be OTT’s biggest single income generator in that year. The US will be the biggest market, followed by Japan, the UK, China and Germany.

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FTI Consulting’s Phil Schuman

Digital TV Research’s Simon Murray

In addition to Netflix, Hulu and Amazon Prime in the dominant US market, established broadcasters, cable and satellite platforms, individual networks and telecom operators have gone OTT to complement their established pay-TV business models. Free-to-air terrestrial broadcaster CBS has launched CBS All Access, a subscriptionfunded service offering both linear and on-demand programming. CBS rival NBC has similar plans this year. Subscription-funded pay-TV network HBO offers HBO Now, while its rival Showtime recently entered the OTT fray. Satellite-TV pioneer Dish Network has Sling TV. Sony Corporation, owner of the global TV entertainment giant Sony Pictures Television and Sony PlayStation video games, is rolling out PlayStation Vue, with its combination of live and on-demand shows, across the US. Verizon, the telecoms giant, is already offering FiOS, the paid-for internet-delivered IPTV service. But IPTV, available to only the ISPs’ respective customers, has not been enough for Verizon, which is scheduled to launch a “mobile-first” OTT service this year. Viacom’s pay-TV kids network Nickelodeon has introduced the ad-free Noggin service featuring on-demand shows from Nickelodeon and its sister channel Nick Jr. Outside the US, telecoms behemoth BT Group is causing havoc in the UK market with BT TV. BT’s subscription IPTV service is challenging local rival Sky, already Europe’s biggest pay-TV operator, for popular SVOD

and live-TV rights to general entertainment, sports and, most recently, event drama. In response, Sky has introduced Now TV, its own OTT operation. Meanwhile, Vodafone, the UK-originated international telecoms conglomerate, is reported to be using its 2012 acquisition of Cable & Wireless to enter the subscription video-ondemand (SVOD) entertainment business. In the Nordic markets, Viaplay is leading the OTT march. Vivendi, owner of French pay-TV giant Canal+, reportedly acquired the vast majority of video-sharing website Dailymotion for $240m-plus as part of a bid to expand its streaming business. And over in Spain, viewers can opt for Telefonica’s Movistar TV Go or Wuaki.tv, a subsidiary of the Japanese e-commerce conglomerate Rakuten. Nigeria-based iROKOtv is using the same streaming technology and similar business models to offer Nollywood movies to the international African diaspora. Meanwhile, in Asia, iFlix is being described as the Netflix of Southeast Asia. Back in Europe, Digital TV Research’s principal analyst Simon Murray, says: “There have been three responses to OTT from pay-TV operators: set up a rival service, do nothing yet or partner with SVOD players. A big advantage the likes of Now TV [UK], CanalPlay [France] and Viaplay [Nordics] have over the likes of Netflix is that they offer linear/live

SeaChange’s Jay Samit

“Netflix may be seen as today’s metric, but it won’t be alone for long” Jay Samit programming, especially sports. Some operators, usually those with few exclusive content deals like the UK’s Virgin Media and Sweden’s Com Hem, have partnered with Netflix rather than set up their own service.” Phil Schuman, senior managing director at US-based FTI Consulting’s corporate finance division and a media and entertainment specialist, says: “[Internationally] local OTT services are popping up in many countries. As OTT offers improve and gain acceptance in these markets, it is probably inevitable that these services will make inroads and will affect the number of consumers acquiring paytelevision programming via MVPDs [multichannel video programming distributors] in a market. This is a real issue for later entrants if they need to achieve high subscriber penetration to be viable long term.” However, Schuman is optimistic about the vibrant OTT market — as is SeaChange’s Samit, who adds: “The good news is it’s still ‘day one’ for content-owners and service-providers who haven’t yet sorted an OTT strategy. Netflix may be seen as today’s metric, but it won’t be alone for long. It’s just first on a large scale.”

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X 0 v S

TV RATINGS

Counting

eyeballs

Until a couple of years ago, the measurement of multiplatform TV viewing was largely an experimental activity. But in these cost-conscious, accountable days, it is rapidly turning into an established business. Juliana Koranteng reports

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SING technology to examine who is watching what, when and for how long no longer suffices for TV distributors and the advertisers who pay to reach their audiences. A new generation of viewers worldwide is accessing series, videos and fi lms via millions of connected devices anywhere, at any time. The recent addition of over-the-top (OTT) internet-TV platforms to linear, on-demand and online entertainment, as well as the universal adoption of automated programmatic advertising, have disrupted the international media-planning universe. The audience size for linear-TV networks is dropping gradually, cord-cutting is impacting on pay-TV subscriptions and mobile viewing is taking individuals out of the traditional measurement picture. The industry once feared that the resulting media fragmentation would make it difficult to keep track of viewing habits and pin down audience profiles for marketers, who now want more than just viewers’ gender, age group and household income. Andy Nobbs, chief commercial officer at international TV-content monitoring group

Teletrax T V, pins down the potential of the audience-measurement market in today’s multiplatform viewing business. “As TV and digital media come closer together in terms of reach, TV remains powerful but it’s not great at understanding what the audience wants,” he says. “Digital, on the other hand, doesn’t have TV’s reach, but it can give you a sense of when someone is engaged with a

“TV remains powerful but it’s not great at understanding what the audience wants. Digital doesn’t have TV’s reach, but it can give you a sense of when someone is engaged with a show” Andy Nobbs

show. If you put them together, then the media-owner provides additional value to the advertiser.” Various companies, from Teletrax to TV-ratings pioneer Nielsen, are developing in-depth analytical systems to overcome the ensuing challenges. Comprehensive multiplatform audience analysis not only provides a clearer identification of who is watching what and when, but the possible data collected should enable marketers to have their multiplatform campaigns seen by the appropriate target at the optimum time. Part of Dutch content-analytics specialist Civolution, Teletrax monitors more than 2,100 channels in real time worldwide in 70plus countries. Earlier this year, it launched its TV Synced Campaign Analytics to use audio and video fingerprinting plus watermarking technologies to help advertisers and agencies refine the measurement of ad campaigns on air, online, on mobile and on social media. Audio/video matching technology features unobtrusive signals installed in each programme to help determine if it has been watched, while watermark technology refers to the unique signals in each programme that are used to track how and where it is being watched. These are useful tools for a global sector growing more complex by the digital second. “It’s getting harder to understand what makes consumers tick and provide a single solution for advertisers and broadcasters,” Nobbs says, explaining

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Teletrax TV’s Andy Nobbs why the alliances Teletrax has formed with companies including global advertising conglomerate WPP and Nielsen are necessary. “The [audience-measurement business] is very fast moving,” he adds. “You can only do it through partnerships.” Nielsen has felt particular pressure from TVnetwork owners such as Viacom, which includes the Nickelodeon and MTV channels among its brands. Viacom CEO Philippe Dauman has publicly refuted some Nielsen US figures on the grounds that its measurement system does not take multi-device viewing into account. Nielsen supporters have argued that the claim is unfair. The company’s efforts to include mobile and social-media viewing into its analytics systems (such as Nielsen Twitter TV Ratings) face the same challenges as similar endeavours. Multi-device viewing via multiple platforms is still very young compared to traditional TV viewing, but the demand for it is extensive. “Never before has the viewer had more control and more skill in navigating this evolving ecosystem of devices, platforms and delivery for content discovery,” says Dounia Turrill, Nielsen’s senior vice-president of client insights and analysis. “With this comes an equally diverse and often completely unique media diet for every consumer.” Thanks to its Total Audience Measurement

system, Turrill says Nielsen is working with the TV and advertising industries to redefine the audience-measurement currency needed “to capture more of the time consumers spend with video content across the growing variety of screens, devices and platforms”. The company is going beyond traditional demographics to obtain its insights, and has set up different practices to close the gap between what consumers view and what they purchase. Turrill adds: “We believe that the industry metrics should evolve to be a comprehensive measurement of all audiences and all advertising, allowing for flexible business models that support both the linear and dynamic models of delivering ads and content by which the industry can choose on how best to transact.” And the company is not stopping at the world’s key developed TV and advertising markets. In June, Nielsen Thailand embarked on trials to measure multi-screen audiences in the country. Other developments in Asia can be seen in Singapore where GfK, the German consumer-market and TV-audience measurement group, is helping the city state’s Media Development Authority (MDA) to add multiplatform data to its overall programme ratings. The metrics developed from integrating figures for computer, tablet and smartphone viewing into traditional TV findings aim to set up a measurement system that marketers in Singapore, one of Asia’s biggest ad markets, can rely on. The three-year agreement, including a two-year renewal option, will see MDA report the first findings in 2016. Eurodata TV Worldwide, a subsidiary of France-based peoplemeter audience-measurement company Mediametrie, works with national TV-ratings specialists globally. With a presence in more than 107 countries a database containing information on 5,500-plus channels, Eurodata TV is well positioned to examine how multiplatform measurement is developing internationally. “As long as the audience-measurement company in a country is evolving to include catchup and time-shifting viewing on all four screens [TV, personal computers, tablets, smartphones] to create a uniform metrics system, we are interested,” says Sahar Baghery, director of the international TV formats and contents division at Eurodata TV Worldwide. From observations made by Eurodata TV, the most advanced markets in audience measurement for TV anytime, anywhere include the US, the UK, Scandinavia, the Netherlands and Switzerland. By the middle

Rentrak Corporation’s Bill Livek of this year, 26 countries were offering timeshifting measurements, 23 countries were measuring catch-up TV, 12 countries were assessing live-TV viewing on computers, and five territories were featuring viewing data on mobile devices. “Europe is taking the lead in this,” Baghery adds. “It has a large number of millennials who have been taken into account. Scandinavia has one of the most advanced social-TV viewing habits in the world.” But the fragmentation of media viewing does not mean linear-TV is dead, insists Bill Livek, vice-chairman and CEO of Rentrak Corporation, the US-based operation that has taken its established technology for measuring cinema box-office sales globally into US TV homes. Today, Rentrak collects data from 120 million US TV sets, including live data from 60 million multiplatform set-top boxes. From Rentrak’s findings, Livek concludes:

“The future of TV is TV because more people are watching great programmes. The incremental viewing is the result of digital viewing via other devices” Bill Livek

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Nielsen’s Dounia Turrill “The future of TV is TV because more people are watching great programmes. The incremental viewing is the result of digital viewing via other devices.” The company does not distinguish viewing on a TV set from laptop viewing. And based on the total number of minutes spent viewing TV over any 28-day period during the second quarter of this year, US viewers are watching more compared to the previous year, Livek says. Rentrak has also observed growth in live viewing outside the home. The evidence is stark during major sports events such as North America’s National Hockey League games and the recent FIFA Women’s World Cup football tournament in Canada. “No sports fan wants to watch a match on a delayed-time basis because they feel part of the event,” Livek says. One of the more interesting revelations from multiplatform measurement has been the discovery of new demographic types. For example, TV advertisers would love to reach those high-income executives interested in buying a $100,000 luxury sports car but who are generally too busy to watch scheduled programmes on linear TV. “It seems the more upscale the viewers, the more VOD viewing they want. It’s a new untold phenomenon,” Livek says.

complement the legacy businesses. These include London-based TVbeat, which specialises in measuring the viewing of linear and the new internet-distributed OTT services on any device. TVbeat CEO Laurence Miall-d’Aout says: “Just as Nielsen is not a technology-first company, we’re very niche with fully scalable deep-data technology for understanding the TV ecosystem. We’re complementary.” Since its launch in 2013, TVbeat has become active in four countries — Serbia, Russia, Croatia and Slovenia — and has embarked on active trials in Spain, the UK, Belgium and Latvia. As a young company making inroads in the still relatively conservative TV business, TVbeat’s growth strategy is to be steady but reliable “to make sure our customers are satisfied before we move on”, Miall-d’Aout says. “The people who have invested in us know from the results of our technology that it works. We’re bridging a gap.” Future challenges for the industry include gaining the co-operation of telecoms operators, which have access to precise data collected from viewing behaviour on internet-connected devices. Eurodata TV has agreements with French telecoms groups Orange and SFR, but it would like access to the logs of as many operators in as many countries as possible. Moreover, the emerging OTT platforms still feel possessive about the audience data they gather and are reluctant to share it with other industry users. Measuring their viewing figures has become vital as several, including Netfl ix, are both content aggregators and creators. Consequently, they are keen to learn how much time customers spend watching individual

Meanwhile, a new generation of audience analytics tech companies are emerging to preview magazine I September 2015 I www.mipcom.com

Eurodata TV Worldwide’s Sahar Baghery shows to see what works and what does not. “Right now, there is still too much audience fragmentation. You need everyone, including all the channels, involved if you want access to all TV homes,” Baghery says.

MIPCOM News 2015 - Articles and Analyses  

JayKay Media Articles and Analyses in MIPCOM News - covering Streaming Platforms, why they are revolutionising what we used to call Televisi...

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