The Streaming Wars – What’s in store for brands?
Last month, Frances Sinclair, strategy partner for Carat took part in Mediatel's Future of TV conference on the panel of 'Harnessing the Expected Growth in Ad-Supported, Non-Broadcaster Streaming'. She shares with us her take away from the conference and her thoughts on the future of streaming and how brands can expect to be affected.
If we’ve learned anything about television from the past decade, it’s that consumers are greedy for more – spawning an ecosystem of new platforms and services that have upended the definition of just what we call a television experience.
The emergence of catch-up TV, addressable TV, connected TV, the successful growth of Netflix and Amazon Prime Video, the launches of Britbox and AppleTV and the rise of binge-watching behaviour all lay testament to this.
Ofcom figures show that in 2019 there were five million more active streaming subscribers than there were for similar cable services in the UK. Without a shadow of a doubt, the Brits are a nation of streamers.
The twenties look set to be just as exciting – with promises from all corners of the media and technology industries to continue changing the shape of how, where, when, and what we watch.
This March, Disney will bring their latest streaming offering, Disney+ to UK shores. For those doubting how the entrance of Disney newest streaming service might further shake-up the UK television market – consider that Disney will remove content from other channels and that within its US launch week last November, the platform attracted over 10 million US subscribers.
We’ll also see Hollywood and tech powerhouses Jeffery Katzenberg and Meg Whitman launch their mobile-first, short-form streaming service Quibi in April. Boasting the star power like Steven Spielberg and offering 4-10-minute bites of content within a subscription model[i].
YouTube will remain the lead streaming platforms for younger audiences, and their original programming quality looks set to continue with a full-length documentary to mark 20 years of the Coachella Music Festival, and the Robert Downey Jnr. hosted documentary series, ‘The Age of AI’.
Amazon is expected to continue its bull-run in acquiring content rights and original programming. They will also release IMDB TV, their ad-funded TV service, and we’ll be watching out for its continued move into UK market sports rights that currently include tennis’s US Open and ATP tours, NFL and Premier League.
If the television industry was a person, it’s 2020 New Year’s resolution might be to gorge on the content equivalent of cream cakes and caviar. And while the idea of choice sounds fantastic – all this content, just like cream cakes and caviar come at a cost, literally to consumers. Put simply, to access high-quality content; people will have to pay for it.
Can the marketplace support all the players?
US research from Ovum indicates consumers develop fatigue after 3-4 subscriptions. While this might suggest we’re nearing peak streaming in the UK – this could potentially be counter-acted if platforms are willing to disaggregate their content verticals and allow consumers to pay for the bundle of content within platform/s most relevant to them.
Alongside the streaming wars, there’s white space available for aggregation wars. How much time do you currently spend flicking between services when looking for a program to fill a rainy afternoon? What this space lacks is curation, as streaming libraries remain painful to navigate.
We’ve seen partnerships with BT and Amazon Prime Video, and Sky with Netflix go some way to alleviate this. Expect this space to scale and the types of subscriptions to become more flexible as the streaming wars heat up with OTT and cable providers fighting for market share.
Another alternative could look like that of the mature audio streaming market where players like Spotify operate on a hybrid subscription and ad-funded models.
Which begs the question, how can brands play in these new television spaces?
We can’t ignore that most streaming platforms are currently ad-free; gone are the pre and mid-roll placements that brands and planners are used to tussling over.
The last decade has done everything to allow consumers to avoid ad breaks – with Netflix leading the charge. In this decade, advertising execs and brands need to focus on how to make television advertising feel inviting and exciting.
Let’s take a closer look at the Netflix model. While Netflix experiences are ad-free, product placement is evident in much of its original content. A simple example of this is the appearance of Burger King, Coca-Cola, Baskin Robbins and KFC in their hit show, Stranger Things.
They are also not opposed to actively allowing brands to license third-party experiences. For example, working with Subway to create an exclusive sandwich promoting animated series, Green Eggs and Ham and licensing outfit merchandising for La Casa de Papel to Diesel.
With platforms like Netflix spending so much on content, the question is, can they leverage that incredible audience attention, and deliver shareholder value?
Media research group Forrester notes that Netflix is strengthening its marketing team, perhaps hinting at greater partnership flexibility, including ad-funded models in the year to come[ii].
How might the ad space develop?
Some services like Hulu, HBO Max, Peacock and Quibi feature ad-funded models and both pre-roll and mid-roll breaks will remain on YouTube. Xandr, AT&T’s ad-tech platform is already delivering ‘pause ads’ in several markets. These ads appear when a viewer decides to pause the content they’re watching.
As sports broadcasting moves to OTT players, the likes of DAZN are shoring up their ad technology capabilities, integrating with Google to ensure their services are transparent and accountable, providing advertisers with greater flexibility in creative delivery and measurement such as cross-platform audience targeting in and out of a live streaming window.
Branded entertainment done right is also a significant opportunity for brands on ad-free platforms. Jaguar Land Rover, Mondelēz, Lexus and Shell have all dipped their toes into this space - placing high-quality documentary and entertainment content on Amazon’s Prime Video. This type of content remains high risk, requiring partnership with high-quality production houses and understanding the purpose behind the undertaking. Consumers do not want to watch an hour-long advertisement.
Audience profiling will continue to mature while being mindful of GDPR, CCPA and other privacy restrictions. Like targeting already available in products such as Sky AdSmart, agencies and brands will plan and measure audiences on criteria like digital advertising including location, age bracket and broad demographics.
While advertising overlays have been a feature of display advertising for years, they look set to scale in the streaming market. These contextually relevant placements feature inside television programming, using computer vision and machine learning to identify relevant conversations and objects within video content, then meshing content into programming augmented to different audience cohorts based on advertising relevance.
Adding a newly released cereal to your weekly Ocado shop or purchasing tickets to a recently released movie via shoppable ads that can be scanned and bought instantly with your mobile, Alexa or Google Home would also make a lot of sense and add the tantalising prospect of directly attributable sales.
By most accounts, for brands – streaming will continue to disrupt the television market and increase the number of hours consumers dedicate to content. Brands need to embrace the space and find a balance between broadcast TV and the niche and zeitgeist programming available on streaming platforms, reaching consumers when they want to be talked to with content that’s relevant and enjoyable.
Implications for brands
- Brands need to be brave and look for opportunities to test and learn their way into the streaming space. Be aware not all advertising opportunities will look like a traditional 30-second television spot. Think immersive, contextual placements, shoppable ads, branded entertainment and licencing
- Don’t discount traditional television programming. The UK broadcast market still retains globally award-winning and culture-defining content that attracts large audiences
- Look to evolve your television measurement framework – the arrival of connected TV, programmatic buying and tech-savvy streaming platforms will provide greater transparency on audience reach, quality of attention and in some cases directly attributable ROI.
You can watch more of Frances’ views on the streaming market from her panel discussion at Mediatel’s Future of TV Global conference.