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'Sea Change Move'

Streaming Media Fighting for Eyeball Share With Social Media, Panelists Say

Streaming media companies are “fighting for the TV screen” against social media video, said Darren Olive, Crackle Plus executive vice president-advertising sales and partnerships, on a Tuesday StreamTV World webcast. In eyeball share and attention share, “social media video certainly is grabbing and keeping a lot of the younger audiences,” Olive said, citing his own household where teenagers watch their phone concurrently with TV, if they’re watching TV at all.

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Larger social media video companies have done a good job in the TV and video marketplace to position themselves with ad agencies and clients, Olive said, “but I think there’s a big difference with short-form video and then the television long-form storytelling that we have.” At the same time, he noted the YouTube app in the U.S. is one of the fastest-growing apps on smart TVs. He's waiting to see how Instagram and TikTok address the connected TV space: “Are they going to tell a different story and provide different content?”

U.K.-based Virgin Media O2 household behavior research showed that when customers are watching a big screen TV, an average four additional screens are being viewed at the same time. “That’s a high number of active screens,” said David Bouchier, chief TV and entertainment officer, “so we’re very conscious as a business that we need to deliver the right service for the right screen.”

TikTok in its current form lends itself only to short viewing on small devices, Bouchier said. He noted Spanish broadband provider Telefonica has a curated version of TikTok on its set-top box and said Virgin Media has had talks with TikTok about the social media company's plans to “move to the big screen and how that would look.” TikTok acknowledged the consumer experience changes when on the big screen “because it’s not a one-to-one individual viewing experience,” Bouchier said.

Virgin Media has had YouTube on its set-tops for a while, and it’s not the favorite app for a family to view on VOD, Bouchier said. Social media services will have to evolve a big-screen version of their services, “and we’re constantly talking to them about how we would provide for that.”

Addressing the wide gap in viewing preferences among its traditional pay-TV and broadband streaming customers, Bouchier said of the under-25 subscriber, it’s “very difficult to get them to watch any of the traditional long-form media on the big screen, except when they’re watching with the rest of the family.” Those statistics are “very troubling” for broadcasters and the U.K. government, “which wants to see the U.K. businesses that tell U.K. stories engaging with that young audience. That is really a challenge," he said.

Commenting on Netflix’s ad-supported tier that launched last week, Crackle’s Olive compared Netflix’s move to Hulu early on, “putting itself alongside broadcast networks” in the U.S: “I think it’s going to move a lot more advertising and advertising dollars to [connected TV] and to streaming.” The key will be the price of the ads and the cost per thousand impressions (CPM) of advertising on Netflix. Olive cited reports of “upwards of $65 CPMs” in the U.S., “which could be ten times a household CPM on cable television.” Because the ad tier is a new "bright shiny object," he said, “right now they can get it."

Netflix's ad tier should bring more overall dollars to the streaming space, Olive said. Dollars allocated to digital advertising compared with time spent on connected TV “is not there yet" vs. where it should be, he said. Netflix' ad-supported VOD tier is a “sea change move for a lot of those brands to move the money over where it really should be.”

The Netflix ad tier will draw advertiser attention to streaming services, said Manish Bhatia, chief growth and product officer-media division, Kantar, a data analytics company. “Advertisers who may have been hesitant will come in and definitely play here, so it will be a larger swimming pool for everybody to swim in.”

It’s all about the price point,” said Virgin Media’s Bouchier. “If they’re looking for the value customer, it's going to take a couple of dollars, a couple of pounds off their subscription.” Because Virgin bundles Netflix, “we are potentially impacted,” he said.