Hulu Announces New Interactive Ads At NewFronts

What Happened
Hulu is expanding its interactive ads to target viewers watching in their living rooms, as the ad-supported streaming service announced a series of new ad deals at its NewFronts event on Wednesday morning. The company is working with BrightLine, an interactive advertising firm, to bring interactive ads to connected TV devices, including Roku set-top boxes or PlayStations, this summer. The new ads will enable living room viewers to click on an ad using their remote to learn more details about a particular brand, just like they would with the clickable ads that Hulu already serves on the desktop web.

Besides bringing interactive ads into the living room, Hulu is upping its ad measurement game by incorporating Nielsen’s digital ad ratings to its campaign reports. It is also teaming up with market research firm Millward Brown to offer brands more insights for their ads and will be working with our sibling agency Magna Global on that initiative as well.

What Brands Need To Do
With more and more viewers abandoning linear TV viewing in favor of on-demand viewing enabled by streaming services like Hulu, it is imperative that brands follow the eyeballs. According to Hulu, 70% of its content views now occurs on connected TV devices, whereas only 15% happens on the desktop. Therefore, it makes perfect sense for Hulu to extend its interactive ad unit to the living room. For brands, this extension, along with the improved measurement, should be helpful for reaching and engaging a big part of Hulu’s audience.

To read more on how brands can deal with the shift toward SVOD platforms, please check out the Appified TV section in our Outlook 2016.


Source: AdWeek

CES 2015 Preview: Smart TV Partnership Spotlight

More and more people are buying Smart TVs — by some projections, there will be 66MM connected households in 2016 — and so the long-developing advanced TV space should finally achieve nationwide scale. Not surprisingly, then, they’re a major theme at CES 2015. With the trade show just around the corner, we are highlighting three of our favorite partners in the connected TV space. They’ll be exhibiting at CES, so stop by their booths and say hi.
BrightLine: Veterans of the ITV space, BrightLine is focused on building rich media experiences for TV. They’re helping brands enhance their content and advertising across linear and OTT (on-demand) platforms.
Samba TV: Samba uses ACR (automatic content recognition) to identify what TV viewers are watching. Their product suite ranges from real-time TV analytics to cross device retargeting. The latter is great for audiences that watch TV while using their  phone (nearly 58%, according to a 2014 report from Ipsos).
Cognitive Networks: An example of a ACR provider focused on first-screen, Cognitive Networks also recognizes smart TV content, and displays interactive content directly under the broadcast. That interactive layer can be used to increase engagement with either programming or advertising. Cognitive Networks just netted a pretty healthy Series B, so be sure to congratulate them.

Google Announces Android TV

Google unsuccessfully launched Google TV in 2010 but their announcement of Android TV at Google io yesterday looks more promising. Content will be paramount with access to the Google Play store as well as Netflix, Hulu and more. It will also have “Chromecast-like” functionality to cast other devices to your TV as well as some gaming from Google Play Games network similar to Amazon’s Fire TV.

In an increasingly cluttered space, Google’s point of differentiation may be their search which leverages their Knowledge Graph to offer recommendations and aid discovery. With such a breadth of content across multiple providers, an intuitive interface and easy search will be key in the battle for the living room.   

MAGNA GLOBAL Flash POV: Supreme Court Dubs Aereo’s Service Illegal, Broadcasters Rejoice

Over-the-top video service Aereo was effectively shut down today after the U.S. Supreme Court declared their business model illegal.  While CEO Chet Kanojia vowed to continue the fight to develop consumer-centric video solutions, the company’s main investor, Barry Diller, said the fight was over.  Indeed, there is no way Aereo could continue in its current form without paying the same substantial retransmission fees that cable, satellite, and telco providers currently pay, eliminating its position as an inexpensive alternative.

To recap, in 2012, a temporary injunction filed by several broadcasters was denied by the Federal court in New York, citing a previous case involving Cablevision’s remote DVR service.  The consensus among the judges was that since Aereo is designed to send signals to individual consumers, it is not broadcasting publicly and therefore not violating any copyright laws.  That decision was upheld by a federal appeals court in April of last year.

While three of the Supreme Court Justices agreed with that assessment, the majority did not.  In their minds, Aereo operates in the same way as any other multichannel provider, because it “receives programs that have been released to the public and carr[ies] them by private channels to additional viewers.” (You can read the full decision here).  Because of that, said the Court, it too must comply with the Copyright Act of 1976, which is the law that enables broadcasters to collect retransmission fees from said providers.

Justice Scalia, one of the dissenters, expressed concern that the Court’s “improvised standard” will “sow confusion for years to come.”  The fear in the technology world is that this will strongly discourage any innovative new over-the-top solutions for fear of being squashed by the broadcasters.  For consumers, it whittles down the less expensive alternatives to having a traditional multichannel subscription—but the fact of the matter is, there is no evidence that current cable subscribers have any interest in abandoning their service.

Our latest estimates show that multichannel subscriptions are quite stable—while some consumers may switch providers, very few are abandoning their cable altogether.  Which means that OTT options like Roku, Apple TV, and video game consoles are largely supplemental, and that the viewers that rely strictly on broadband for their video never had a multichannel subscription in the first place.  But—as we’ve pointed out before—they must often relay on the same cable companies for their broadband connection.

Bottom Line: This decision is not surprising; the broadcasters have deep pockets and powerful lobbies in Washington.  The truth of the matter is that even if Aereo had won, it wouldn’t have presented much of a threat to the broadcasters—at least not in and of itself.  What could have been disruptive is the inevitable efforts by MVPDs to avoid retransmission fees by adopting a similar model.  Even then, though, those services are likely to have appealed to a small contingent of consumers that never had a multichannel subscription to begin with, as those who have it don’t seem to be in any hurry to part with it.





Watchlist: Amazon Set-Top Box

Amazon is planning a trojan horse for the living room–a proprietary set-top box. The device itself will look to compete with the likes of Roku and Apple TV, but more importantly it will serve as a gateway to Amazon’s marketplace. I would expect the price point to be relatively low given their history in the tablet marketplace. All of this, of course, is speculation as we do not have product details or a release date, just a lot of chatter. 

Why Are TV Channels Still Numbered, Anyway?

In the on-demand, programmatically-bought future, fitting content into numbered slots will seem antiquated and superfluous. Our great-grandchildren will hardly believed we ever did things this way.

When I was a kid, we had a small black & white TV with a dial. We had our choice of channels 2 -13, plus another knob for the vast UHF wasteland. No offense, Weird Al.

Television was presented to us as an ordered list, because that was how it was broadcast. Since each TV station needed to broadcast on a different frequency, they were assigned orderly little slots. Since geographically adjacent markets needed to alternate which slots they used, and TV-makers didn’t want to manufacture new knobs for each market, the slots were assigned numbers and the numbers were put on the knobs in sequence. Channel 4 broadcast at a slightly higher frequency than Channel 3, but a lower frequency than Channel 5.

Then along came cable TV. Cable inherited this legacy even though it was not bound by broadcast frequencies. Consumers needed to know that if they subscribed to cable, they would still get “Channel 2” and “Channel 7”; plus they get new cable networks, which get their own arbitrary numbers. Why train people on a whole new system, right? Cable is just like “regular” TV, except with lots more of it. Also, it’s easier to show a number on the front of the cable box than the name of the channel. So the numbering model was still useful. Also cable companies could use “low” numbers as negotiating leverage with networks.

This model doesn’t hold for newer forms of content. The Huffington Post isn’t “Website number 802.” Of course it isn’t, trying to number websites would be superfluous and silly. You don’t have to navigate up and down through a list of websites, you just type in what you want based on its descriptive name and go there. Your only hurdle perhaps is remembering which vowels to leave out of the domain name.

A slow revolution of sorts is beginning to take hold that will finally challenge the numbered-TV model. You may have heard this referred to as “cord-cutting” or as the adoption of “over-the-top” entertainment options. This trend doesn’t just mean people cancelling cable and watching Netflix instead. It challenges the 70-year old definition of what a “network” is and the 7-year old definition of what an “app” is (vis a vis entertainment).

Right now, we have cable networks with linear programming, and we have apps with supplementary content about those cable networks. The logical conclusion of the current trends is that the two merge; the linear TV broadcast of live events plus on-demand shows all live within an app that is ad supported (e.g. Hulu), subscription based (e.g. something like HBO Go or Netflix), or some sort of hybrid. Imagine a world where you subscribe to “cable”, but instead of 500 numbered channels, you get access to 500 apps. Each app then has the “TV network” as you used to know it embedded within, plus supplementary functionality. So your ESPN app includes live coverage plus a widget showing scores, and your History Channel app shows an interactive map with the best routes for ice road trucking along with the show of the same name.

You don’t necessarily lose the ability to bundle content the way cable does currently. For instance, a parent company with many cable networks could bundle them together into one subscription app, effectively becoming a mini-cable company unto itself. A user could then rebuild an approximation of current-day cable service by subscribing to some of these bundles. The idea of assigning numbers to these apps at that point would seem completely ridiculous. As content providers shift to this model, so begins the decline of the channel number. The last vestige will be over-the-air broadcasts; but even then any remotely modern digital tuner can list channels by name rather than number with a simple firmware upgrade.

And what would that then mean for advertising? Well it’s a whole new world entirely. The 30 & 60 second spot formats will erode in favor of a new set of standards for video and interactive ads. These new standard units will be distributed across a vast sea of platforms, apps and experiences in real time based on programmatic algorithms. In parallel there will be enormous opportunities for specialized sponsorships, apps, games and experiences that can rise above the clutter and integrate themselves with audiences’ lives. If you need help imagining what this future will be like, just take a look at where digital display advertising has been headed.

We’re already reading about Apple skipping the cable companies and going directly to content providers for their long-awaited TV offering. Netflix original programming is another example of what this future may look like (albeit without ads). The more Netflix produces original programming, the more they begin to resemble what we currently think of as a TV network. Except they never had a channel number, and never needed one, and never will.

What To Expect From Smart TVs In The Coming Years

From connected TVs to streaming devices like Roku and Boxee, the Smart TV space is experiencing a great deal of growth. According to One Touch Intelligence, Smart TVs have a 22% U.S.penetration while over the Top Devices take 11% so what is leading consumers embracing the tech? It appears that richer content and interactivity are the driving force with apps like Netflix and Amazon Prime accessible on most platforms in addition to exclusive licensing deals from broadcast and cable networks and interactive elements like t-commerce capabilities.  For now, the space is extremely fragmented but our prediction is that dedicated streaming devices will win out as they are display agnostic.

Millennials And Cord Cutting: TV Everywhere A Must

With the rise of Over-the-Top providers, cutting the cord has never been easier according to a new study from Miner & Co Studio. The report states that 13% of 18-34 year olds (8.6 million) who already have broadband service are committed to a broadband-only existence with Pay TV and broadband crossovers moving away from the cable model. The key driver appears to be consumer demand for VOD and live streaming TV everywhere. Also interesting is the lack of desire for offline content, saving shows to watch during periods without connectivity.

Asus’ Qube Set Top Box For Google TV

The Qube looks a lot like a Boxee box and is powered by Google TV coming with the latest features like voice controls and the updated YouTube app. The set-top box has a very unique interface with everything on screen “rotating on a on-screen cube shape.” Google TV has been mostly a pet project for Google, but expect aggressive expansion in the next year or so.

Boxee Streaming Services Comes To TV Manufacturers

Boxee’s latest features–namely cloud-based DVR and streaming services–can now integrate into Smart TVs without the dedicated Boxee box thanks to a partnership with Sigma. The new development creates a turnkey Boxee bundle, allowing any TV OEM include Smart TV and streaming services directly to their hardware. Stay tuned to see if any major players incorporate the NY company’s technology in the future.