Yesterday afternoon, NBCUniversal CEO Steve Burke took the stage at CES 2016 to make a case for the traditional TV business. Facing increasing competitions from the new Internet TV services like Netflix and digital videos, the TV ratings has been in steady decline for the past few years, but Burke firmly believes that the TV business is going to adept and hang around “for many, many years.”
Throughout his conversation with MediaLink CEO Michael Kassan, Burke stressed several times on the incomparable mass reach that TV possesses. “Niche content might work with targeted digital ads,” he admits, “but if you want a blockbuster, you better advertise on the Super Bowl.” He thinks too many marketers have been treating digital videos as a “shining new thing” that will magically replace the scale of TV, and warned against such mentality.
Nevertheless, the TV industry still needs to adept to the shifting viewing behaviors and pick up a few tricks from their digital competitors to connect with today’s mobile-first consumers. When asked about NBCUniversal’s recent investment in Vox and Buzzfeed, Burke said one of the reasons they invested is “to learn from them, to go to market with them.” He regards consumer data and premium content as the two key weapons that will help TV compete with its digital videos.
When asked if services like Netflix were enemies, friends, or frenemies, he said “all of the above,” and admitted that Netflix has definitely impacted the ratings, “but not as much as time-shifted viewing.” He concludes that all players in the content space will have to continue to evolve, and figure out how to get better at distributing content in digital spaces. To that end, NBC’s new OTT comedy streaming service SeeSo seems like a step in the right direction.
For more of the Lab’s CES coverage, click here.
Facebook reported its quarterly earnings yesterday and, all things considered, the social network is doing splendidly well, especially in regard to its mobile ad revenues. The company reported a 45% year over year increase in ad sales in the Q3 2015, bringing total ad sales to $4.3 billion, of which mobile ads took up about 78% ($3.4 billion). Moreover, Facebook also reported 8 billion average daily video views from 500 million users, up from just 4 billion video views per day in April.
With mobile ads now accounting for the majority of its ad revenues, Facebook’s transformation into a mobile company is now more than half complete. The majority of users are accessing the social network via mobile devices, and its monetization focus has also shifted toward mobile. Although part of that 8 billion views is no doubt fueled by the autoplay videos on user timelines, the impressive number still indicates early success in Facebook’s ongoing efforts to build out its video platform, which bodes well for Facebook as it competes with YouTube for the TV commercial dollars that are shifting to digital video.
Source: AdWeek and TechCrunch; Chart from Statista
Earlier this week, CNN announced its plan to launch a digital video platform named Great Big Story (GBS) that targets millennials with “three to five non-fiction videos per day” that caters to the interests of “urban, globally curious 25-to-35-year-olds.” CNN plans to rely on Facebook, YouTube, and an upcoming GBS mobile app as its primary means of distribution, with an app for OTT streaming platforms like Roku and Apple TV coming next year. The news network indicates no immediate plans for display advertising or pre-roll commercials on GBS, but focusing all initial advertising efforts on branded content instead.
What Brands Need To Do
By launching GBS, CNN is effectively building a young-skewing content platform to go after the content marketing dollars, which puts them in direct competition with the likes of Buzzfeed and Vice. For brands, it’s time to recognize the rising importance of branded content, especially videos, in reaching today’s younger, tech-savvy audience and start to team up with media owners to create quality content that people want to watch and share.
Following the launch of its OTT video service Watchable in July, Comcast continues its attempt in broadening its content offering by adding digital videos right into its X1 set-top box. Bringing in short-form videos from a number of content providers, including ABC, Discovery, AMC, BBC America, and its subsidiary NBC, Comcast’s digital content mostly consists of clips of news and sports at the moment. While it probably won’t be enough to convince the customers considering cord-cutting to keep their service, it does offer a nice complement to the existing living room viewing experience.
What Brands Need To Do
With consumers of all age demos excluding baby boomers now watch as much digital video as television, traditional media companies are starting to recognize the importance of digital content in reaching the increasingly fragmented audience today. In August, Comcast invested $200 million in BuzzFeed via NBCUniversal, making a play for its viral digital content. As the audience continues to migrate towards OTT on-demand platforms, marketers and brands will have to follow the eyeballs, as well as developing a more comprehensive digital strategy and campaign approaches.