Tag: Advertising

OTT & Multiscreen – How Our Lives Will Change with Online Video, In the Next 10 Years

Management - Gabriel Dusil (Keynote, v1.5, How Online Video Will Change Our Lives in the Next 10 Years, title)

Synopsis

Online video providers today have the ability to experience a one-to-one conversation with their audience, compared to the somewhat anonymous nature of this relationship in traditional TV. Viewing habits of consumers continue to rapidly change in the next ten years, bringing more choice, portability and accessibility to video. A granular nature to analyzing subscriber behavior will open new opportunities for content owners, end users, and everyone in between. This will require accompanying changes in advertising expenditure as it pertains to a global vs. local focus.  In the global reach of video, due to the ubiquity of the Internet, online services will need optimize to capitalize on new market opportunities.

Watch a video of the Presentation here:

Download the Original Presentation here:

Portfolio – Visual Unity, Open Day, Prague (How Online Video Will Change Our Lives, ’13 v1.8).pptx

View the PDF version here:

http://www.slideshare.net/gdusil/portfolio-visual-unity-open-day-prague-how-online-video-will-change-our-lives-13-v18

[slideshare id=20314519&doc=portfolio-visualunityopendaypraguehowonlinevideowillchangeourlives13v1-8-130501031944-phpapp01]

OTT & Multiscreen • Evolution of Online Media

12.Oct.18 - Visual Unity Opening Day, Prague (Evolution of Online Video, title)

Synopsis

Various industry players are working feverishly to engage customers through online video so that content is available anywhere, anytime, and on any device.  Migration to multiscreen video consumption requires thought leadership and forward-thinking partnerships, to help clients keep pace with the rapid march of technology.  vuEasy™ is a new solution that opens doors to a wide range of companies waiting for an ideal Cloud-based service to monetize their past, present and future content.  Monetization is not just about selling content – it is about building business awareness and a communication strategy around a brand. With vuEasy™, Visual Unity enables an eMarketplace so that businesses can converge in a single cloud service and convert their multimedia assets into revenue.

Watch a video of the Presentation here:

Download the Original Presentation here:

Management – Visual Unity (Master, v3.4, vuEasy).pptx

View the PDF version here:

[slideshare id=17672858&w=476&h=400&sc=no]

OTT & Multiscreen • Digital Video Series • 2 • Granularity of Choice

Graphic - Granularity of Choice (title)
In the days when there were only a handful of channels, the ratio between useful and useless didn’t seem to matter – Especially when it was free and over the air (OTA[1]) content. But as Pay TV[2] came to market in the 90’s, consumers were presented with hundreds of channels and monthly fees. The gap between relevant and irrelevant widened significantly. Throughout this transition subscribers became used to the notion that, “buying the entire book store”, was necessary just to get a few books. It was a necessary evil for users to purchase more than they actually wanted to consume.  There was no other way to get access to the handful of channels that we really wanted to watch.

But in today’s internet world, consumers no longer need to buy the entire bookstore to get a few books. Consuming content is analogous to going to the library and only borrowing (i.e. viewing) what we want – then giving it back when we’re done. Accessibility to online content has removed the need to subscribe to more than we need to consume. Whether it’s head-end or long-tail[3] content, consumers only need to purchase and consume what they want, without any excess baggage and expense.

Figure i - The Long Tail of Internet Video Consumption

Figure i – The Long Tail of Internet Video Consumption

The frustration of having too many channels didn’t matter, as long as we could watch what we wanted. But the challenge for broadcasters was introducing their subscribers to mid-tail to long-tail content otherwise unnoticed by the casual viewer. Cable and satellite providers addressed these market challenges through the introduction of EPG (electronic programming guides), and DVR (digital video recorders or PVR, personal video recorders[4]). With these new set-top boxes (STB[5]), subscribers became untethered from the limitations of linear broadcast. Finally consumers could watch their programming whenever they wanted, the freedom to pause or rewind if they wanted…or, dare we mention – fast-forward through commercials – to the irritation of advertisers. Nevertheless, there was still a string tying the subscriber to linear TV since the digital video recorder needed to wait for the program to broadcast before it could be captured onto a set top box. A limitation that will always apply to live broadcast for that matter.

"I only watch four channels. Why do I need to pay for over 500"

With Over the Top content (OTT)[7], services such as Netflix[8] and Hulu[9], subscribers could finally disconnect themselves completely from linear television, and just download what they wanted (i.e. any content), when they wanted (i.e. any time). With Apple’s introduction of the iPhone in 2007[10] and iPad in 2010[11], consumers became untethered from their living rooms and could watch videos on any device and ‘anywhere’.

"For subscribers that have Cut-the-cord ... broadcast television has become a frustrating experience"

With the growth of online video, a trend has also begun with subscriber’s cutting-the-cord[13]. This is a fairly recent phenomenon where consumers cancel their cable or satellite TV contracts, and exclusively use the internet for their viewing experience.  This may include a combination of OTT services, cloud-based subscription services, or any number of websites which serve internet video.  The accompanying chart shows that around 7% of global Pay TV subscribers have cut the cord, with another 8% proactively reducing their costs.  From this group, 56% that made the change were motivated by saving money, and another 42% weren’t watching enough television to justify the subscription cost.  Overall this decline may not seem alarming, but for cable and satellite providers with millions of subscriber, this amounts to sizable losses in annuity revenue streams. In the U.S. alone, over a two year period from the beginning of 2010 till the end of 2011, the cable TV industry lost 2.3 million subscribers[14], and this downward trend is continuing unabated. With an ARPU[15] (Average Revenue Per User) of $53 US per month[16], this amounts to a loss of over $1.4 billion US per year.  This decline doesn’t appear to be slowing any time soon.

Figure ii - Global Subscription Changes & Reasons for Reduced Spending

Figure ii – Global Subscription Changes & Reasons for Reduced Spending

In a world where Netflix offers an extensive movie library and Hulu offers the same for TV serials, then what is left for broadcaster’s to differentiate their offering? Currently this includes live sports and news events. These may be the traditional broadcaster’s last remaining holy grail – but for how long? Protecting their revenue streams has created a sense of urgency, more so than embracing new online revenue opportunities. It’s no mistake that most of the 2012 Olympics in London were only available via selected broadcasters world-wide[17].

Figure iii - Decline in U.S. Cable TV Subscribers

Figure iii – Decline in U.S. Cable TV Subscribers

The Internet has significantly disrupted the traditional TV subscription model. Even if consumers still watch their television for live news and sports, for some it has become a medium for background noise within the confines of their living room. It’s a relaxing release from having to make a choice of what to watch. For others the autonomy to make content choices has widened, and the ability to granularity access that content also has.

The need to own content is also being diluted by accessibility. As service providers continue to consolidate libraries, extended their content rights, and provide multiple ways to consume content, the need for ownership is slipping from the minds of consumers. This may be partially the reason behind the dip in disc sales over the past few years.  According to Rentrak[18] and DEG[19], the decline in Blu-Ray and DVD disc sales is currently around 16% per year. Despite the growth in Blu-Ray disc revenue, this hasn’t offset the decline in DVD sales[20].

"Today we need to buy the whole store to get a few books"

"Tomorrow we will just get what we want to consume"

According to Rentrak, video sales continued to steadily rise until 2005, fueled in part through a combination of rental and sell-through revenue. The turning point of the video industry appears to be around 2006. This was the year when Blu-Ray was introduced. Around this time Internet speeds had finally caught up to the ability to deliver video in real time. Albeit, first in standard definition (SD). In the middle of the decade video streaming technologies such as Real Time Streaming Protocol (RTSP)[22] took hold.  2006 was also the year when Google[27] purchased YouTube for 1.65 billion US$ – less than 18 months after it was founded.  On the 29th of June 2007 Apple begins shipping the first iPhone[25], which was instrumental in fueling the popularity of mobile video. Steve Jobs[26] certainly recognized that he could create unique products that where a culmination of multiple technological innovations.  Another critical milestone was the launch of FairPlay[28] DRM (Digital Rights Management) by Apple, and PlayReady[29] DRM from Microsoft in February 2007. This brought some comfort to movie studios that their titles will be secured when distributed online. During this time, the defining changes in consumer behaviour could be attributed to both an improvement in video quality, the introduction of 1080p televisions, and the growth of OTT services bringing low-cost or no cost video to the end-user.

Figure iv - Consumer Entertainment Spending in U.S. Homes

Figure iv – Consumer Entertainment Spending in U.S. Homes

The need for ownership is now outweighed by our ability to easily access online content. For instance, YouTube[33] is already seen as the most popular method of watching and listening to music videos[34]. Why purchase a CD when a high quality audio and video track of the artist is readily accessible online? And it’s free!  This has caused Generation X consumers to sit back and wonder how they managed to spend thousands of dollars in building massive disc collections. Especially when, in the case of a DVD – the movie is only watched once. The same applies to music CD’s that been played a handful of times. The concept of physical disc ownership is beginning to be an archaic concept.  CD, DVD, and Blu-Ray sales will continue to struggle amongst the rapid rise of internet-based video and music distribution[35].

Even though VoD (Video On Demand)[30], has slightly offset the decline in entertainment sales alone, overall the video disc rental industry is in a steady 2% decline per year. It has yet to be determined whether the global accessibility of legitimate internet video services,  the international expansion for content rights, and  4K UHD (Ultra High Definition)[31] will be able to reverse this trend. Certainly the revival of 3D[32] hasn’t managed to save the industry in these past few years.  In the meantime, it appears that this downward trend won’t be recovering any time soon.

Figure v - 2006: The Turning Point for Digital Video

Figure v – 2006: The Turning Point for Digital Video

Furthermore, physical collections are made obsolete through the re-release of titles at better qualities.  This cycle has been repeated as far back as the VHS transition to DVD, and again when DVD’s transitioned to Blu-Ray. The consumer frustration of replacing collections is apparent at every juncture.  Blu-Ray disc may certainly be the final physical medium for content distribution[36] but does not eliminate this cycle from repeating itself when 4K content is released. The technological innovations in bandwidth, processing power, and screen resolutions are certainly enabling video to be delivered with pristine quality video via the internet, without the need for disc storage.

“The Linear Schedule works because it takes choice away from people. They might be tired after a busy day, and they don’t want to think too hard about what they view. VoD takes a lot of thought processing”, (Complete quote) “Social media on TV? 'We are still learning'”, by Chris Forrester, IBC Daily, 9th Sep. 2012

As a final note, it’s worth mentioning that the current high definition broadcasts are usually limited to 720p[38]. This is mainly due to preserving precious bandwidth, and also helps reduce transcoding time and storage costs in the back-end.  1080p[39] video double these resource requirements in all directions . High compression ratios also help to squeeze as much video as possible in today’s precious bandwidth. For the moment this ensures that Blu-Ray continues to maintain a significant lead at the high-end, maintaining stellar video quality at 1080p. In some cases Blu-Ray contains over ten times the video information of its downloadable or streaming counterpart. Blu-Ray’s bandwidth requirements of 25 to 50Mbps are simply not feasible for today’s average internet subscriber. So the lucrative 1080p market remains safely in the hands of Blu-Ray, for the time being.

“If the subscription fee is set correctly, consumers’ perception of being able to access any content outweighs the value of ownership”, “TV Anywhere: The Game Starts Now”, Simon Frost, Head of TV Marketing, Ericsson

Internet speeds are increasing, both for wireless and wireline, and online video providers are creeping into this market with their own 1080p offerings. By the time 4K disrupts the market within this decade, it is likely that technological innovation will converge to stream ultra-high resolutions in real-time – leading perhaps to the demise of disc sales.

 

Read Additional Articles in this Series

  • I. Consumption is Personal

    In the days of linear television, broadcasters had a difficult task in understanding their audience. Without a direct broadcasting and feedback mechanism like the Internet, gauging subscriber behavior was slow. Today, online video providers have the ability to conduct a one-to-one conversation with their audience. Viewing habits of consumers will continue to rapidly change in the next ten years. This will require changes in advertising expenditure and tactics.

    II. Granularity of Choice

    The evolution from traditional TV viewing to online video has been swift. This has significantly disrupted disc sales such as DVD and Blu-Ray, as well as cable and satellite TV subscriptions. With the newfound ability to consume content anytime, anywhere, and on any device, consumers are re-evaluating their spending habits. In this paper we will discuss these changes in buying behavior, and identify the turning point of these changes.

    III. Benchmarking the H.265 Video Experience

    Transcoding large video libraries is a time consuming and expensive process. Maintaining consistency in video quality helps to ensure that storage costs and bandwidth are used efficiently. It is also important for video administrators to understand the types of devices receiving the video so that subscribers can enjoy an optimal viewing experience. This paper discusses the differences in quality in popular video codecs, including the recently ratified H.265 specification.

    IV. Search & Discovery Is a Journey, not a Destination

    Television subscribers have come a long way from the days of channel hopping. The arduous days of struggling to find something entertaining to watch are now behind us. As consumers look to the future, the ability to search for related interests and discover new interests is now established as common practice. This paper discusses the challenges that search and discovery engines face in refining their services in order to serve a truly global audience.

    V. Multiscreen Solutions for the Digital Generation

    Broadcasting, as a whole, is becoming less about big powerful hardware and more about software and services. As these players move to online video services, subscribers will benefit from the breadth of content they will provide to subscribers. As the world’s video content moves online, solution providers will contribute to the success of Internet video deployments. Support for future technologies such as 4K video, advancements in behavioral analytics, and accompanying processing and networking demands will follow. Migration to a multiscreen world requires thought leadership and forward-thinking partnerships to help clients keep pace with the rapid march of technology. This paper explores the challenges that solution providers will face in assisting curators of content to address their subscriber’s needs and changing market demands.

    VI. Building a Case for 4K, Ultra High Definition Video

    Ultra High Definition technology (UHD), or 4K, is the latest focus in the ecosystem of video consumption. For most consumers this advanced technology is considered out of their reach, if at all necessary. In actual fact, 4K is right around the corner and will be on consumer wish lists by the end of this decade. From movies filmed in 4K, to archive titles scanned in UHD, there is a tremendous library of content waiting to be released. Furthermore, today’s infrastructure is evolving and converging to meet the demands of 4K, including Internet bandwidth speeds, processing power, connectivity standards, and screen resolutions. This paper explores the next generation in video consumption and how 4K will stimulate the entertainment industry.

    VII. Are You Ready For Social TV?

    Social TV brings viewers to content via effective brand management and social networking. Users recommend content as they consume it, consumers actively follow what others are watching, and trends drive viewers to subject matters of related interests. The integration of Facebook, Twitter, Tumblr and other social networks has become a natural part of program creation and the engagement of the viewing community. Social networks create an environment where broadcasters have unlimited power to work with niche groups without geographic limits. The only limitations are those dictated by content owners and their associated content rights, as well as those entrenched in corporate culture who are preventing broadcasters from evolving into a New Media world.

    VIII. Turning Piratez into Consumers

    IX. Turning Piratez into Consumers, I

    IX. Turning Piratez into Consumers, II

    X. Turning Piratez into Consumers, III

    XI. Turning Piratez into Consumers, IV

    XII. Turning Piratez into Consumers, V

Content Protection is a risk-to-cost balance. At the moment, the cost of piracy is low and the risk is low. There are no silver bullets to solving piracy, but steps can be taken to reduce levels to something more acceptable. It is untrue that everyone who pirates would be unwilling to buy the product legally. It is equally evident that every pirated copy does not represent a lost sale. If the risk is too high and the cost is set correctly, then fewer people will steal content. This paper explores how piracy has evolved over the past decades, and investigates issues surrounding copyright infringement in the entertainment industry.

About the Author

Home - Signature, Gabriel Dusil ('12, shadow, teal)Gabriel Dusil was recently the Chief Marketing & Corporate Strategy Officer at Visual Unity, with a mandate to advance the company’s portfolio into next generation solutions and expand the company’s global presence. Before joining Visual Unity, Gabriel was the VP of Sales & Marketing at Cognitive Security, and Director of Alliances at SecureWorks, responsible for partners in Europe, Middle East, and Africa (EMEA). Previously, Gabriel worked at VeriSign & Motorola in a combination of senior marketing & sales roles. Gabriel obtained a degree in Engineering Physics from McMaster University, in Canada and has advanced knowledge in Online Video Solutions, Cloud Computing, Security as a Service (SaaS), Identity & Access Management (IAM), and Managed Security Services (MSS).

All Rights Reserved

©2013, All information in this document is the sole ownership of the author. This document and any of its parts should not be copied, stored in the document system or transferred in any way including, but not limited to electronic, mechanical, photographs, or any other record, or otherwise published or provided to the third party without previous express written consent of the author. Certain terms used in this document could be registered trademarks or business trademarks, which are in sole ownership of its owners.

References


[1] Over-the-air programming, Wikipedia, http://en.wikipedia.org/wiki/Over-the-air_programming

[4] Digital video recorder, Wikipedia, http://en.wikipedia.org/wiki/Digital_video_recorder

[6] “I only watch four channels. Why do I need to pay for over 500?”

[7] Over-the-top content, Wikipedia, http://en.wikipedia.org/wiki/Over-the-top_content

[12] “For subscribers that have Cut-the-cord … broadcast television has become a frustrating experience.”

[13] “Cord Cutting 101: Four Easy Steps to Cut the Cord” by Mike Flacy, Digital Trends, 2nd Jan. 2013, http://www.digitaltrends.com/home-theater/cord-cutting-four-steps-to-cut-the-cord/

[14] “GOODBYE, CABLE TV: 2.3 Million Americans Have Pulled The Plug Since 2010”, by Jim Edwards, 12th Feb. 2012, Business Insider, http://www.businessinsider.com/goodbye-cable-tv-23-million-americans-have-pulled-the-plug-since-2010-2012-2

[15] Average revenue per user, Wikipedia, http://en.wikipedia.org/wiki/ARPU

[16] “Tapping Buyer Behavior To Capitalize on Next-Generation Video Opportunities”, Cisco, March 2012, http://www.cisco.com/web/about/ac79/docs/clmw/CLMW_Consumer-BB_SHORT.pdf

[17] List of 2012 Summer Olympics broadcasters, Wikipedia, http://en.wikipedia.org/wiki/List_of_2012_Summer_Olympics_broadcasters

[19] Digital Entertainment Group, DEG, http://degonline.org/

[20] “Year-End 2012 Home Entertainment Report”, Digital Entertainment Group

[21] “Today we need to buy the whole store to get a few books. Tomorrow we will just get what we want to consume.”

[24] Apple iTunes, Wikipedia, http://en.wikipedia.org/wiki/Itunes

[25] Apple iPhone, Wikipedia, http://en.wikipedia.org/wiki/IPhone

[28] Apple Fairplay, Wikipedia, http://en.wikipedia.org/wiki/FairPlay

[29] Microsoft PlayReady, Wikipedia, http://en.wikipedia.org/wiki/PlayReady

[34] “’Attention is the new money’: Why artists needs to look beyond YouTube”, By Mike Johns, http://www.iptv-news.com/2012/10/attention-is-the-new-money-why-artists-needs-to-look-beyond-youtube-2/

[35] “U.S. Consumer Home Entertainment Rental & Sell Through Spending”, Rentrak, http://www.rentrak.com

[36] “Video Format War: Blu-ray vs. Streaming”, by John Brandon, PC World, http://www.pcworld.com/article/241215/video_format_war_blu_ray_vs_streaming.html

[37] “The Linear Schedule works because it takes choice away from people. They might be tired after a busy day, and they don’t want to think too hard about what they view. VoD takes a lot of thought processing”, (Complete quote) “Social media on TV? ‘We are still learning’”, by Chris Forrester, IBC Daily, 9th Sep. 2012, http://www.ibc.org/page.cfm/Action=Library/libID=3/listID=4/libEntryID=609

[40] “If the subscription fee is set correctly, consumers’ perception of being able to access any content outweighs the value of ownership”, “TV Anywhere: The Game Starts Now”, Simon Frost, Head of TV Marketing, Ericsson, http://content.yudu.com/A1yak6/IBESept-Oct12/resources/44.htm

OTT & Multiscreen • Digital Video Series • 1 • Consumption Is Personal

Consumption Is Personal, by Gabriel Dusil

Have you ever wondered how your analog TV ever figured out what you were watching? Was it based on those surveys posted by companies such as Nielsen[i], to be filled out over the course of a week, then extrapolating their findings to the entire country, or was it magic?

"Broadcasters don’t easily know who’s sitting in their audience. Online Video Providers will have a 1to1 conversation with their audience.”

Figure i – A Broadcast Audience vs. Online Video Audience

However they did it, it’s clear that the Internet has changed the way in which content owners and marketers observe and measure consumer behavior. The one-to-one link between the online provider and the subscriber has a new sense of intimacy, whether we like it or not. Some consider this direct communication to be a threat to privacy; others believe it is an untapped opportunity. Either way marketers are scrambling to take advantage of this new treasure trove of information, consolidate it, make reasonable sense of it, and then sell it for a lot of money. The better they understand our consumer behavior, at an individual level, the more they can satisfy advertisers and sponsors. This will lead to  more personalized advertising, and customized recommendations, which will in turn lead to happier advertisers and more money for better content. It’s a virtuous circle waiting to happen.

Consider the notion that maybe our frustrations with advertising have been due to the generalized nature of its presentation. We are accustomed to the fact that the majority of advertising we experience on a daily basis we find personally irrelevant. In fact, for internet-based advertising this conventional wisdom is not entirely true. Google’s pay-per-click (PPC)[iii] ads have had tremendous success over the years[iv]. More specifically, advertisers using this service have a direct ability to measure their success – something which is very hard to do in print advertising. The point is that this sea-change in the observation and analysis of consumer behavior is not entirely a threat – which is often our reaction to change – but rather an opportunity for consumers to discover products they would not easily find on their own…or for that matter, even consider looking for it.

"The chances of an advertisement targeting me personally, are slim and far-between"

How subscribers view advertising in the context of internet video is a solid step in understanding their motivations. A user study by Ericsson[vi] shows the overwhelming value of receiving recommendations from friends and family in suggesting new content. This is followed by suggestions from a recommendation engine which has been correlated with past purchasing and viewing behavior. It’s also worth noting how subscribers also value social media in their purchasing preferences. Surprisingly the study shows that expert recommendations are the least trusted source.  What if advertising could be valued in the same light as personal recommendations?

Print ads establish a sense of relevance by placing their ads in physical places where the most eyes will see it, in publications with a specific demographic, and next to articles of related interest[vii]. Ads of this type traditionally measure their success based on total impressions; whether or not they were “seen” by the target audience. But relevancy reaches a new level when implemented online. This happens not only by correlating a web page with the interests of the web surfer, but also mapping the user’s demographics and past behavior to the advertisement itself. For example consider advertisements related to pregnancy: A web site promoting folic acid, may determine that the user is a woman, below the age of 30 years. This may suggest that the user is already pregnant, or not yet, but is in the family planning stage. So a banner ad offering pregnancy related products could be displayed. But what if the user is a man above the age of 60, and searching for folic acid?  In this case advertisements related to products which prevent heart disease may be chosen instead. Further refinements in the advertisement could be made if additional demographic and past behavioral information became available.

Mining demographic data against a database of products is complex combination of art and science. At the moment, there is no magic formula. It’s a challenge that marketing organizations are trying to solve, in order to uncover hidden opportunities.

Image

Figure ii – Most Useful Recommendations for Internet Video Services

Ultimately the choice of print vs. online advertisement spending depends largely on the target demographic. If the target audience is an owner of a Rolex[viii], runs their own business, but doesn’t own a computer, then advertising in Forbes[ix] magazine may be more appropriate[x]. Likewise, targeting the 20-something[xi] generation, may require focusing on Twitter, Facebook, and YouTube banner placements.

Image

Figure iii – Productive Online Advertisement Spending

 

With the global nature of the internet, ensuring that online advertising is relevant requires tracking of several metrics.  A web surfer from the Czech Republic browsing CNBC in the US ‘may’ be served advertisements relevant to their location and demographic.  The following approach is based on the 3MS Initiative[xii] and comScore[xiii]:

  • Is the advertisement in view[xiv] on the target device? According to comScore, an average of 37% of ads are not in-view in the European Union[xv] (EU).  The location of the ad should be relevant to the target user.  For example a banner at the top of a webpage maybe overlooked by a user which is focused on scrolling to the article lower down on the webpage.
  • Is the ad shown in the correct geography (aka. geo-location)? According to comScore, up to 7% of advertisements are served outside of their target geography. Half of these were served in the wrong language. On an international scale, relevancy is not only required on a geographic level, but also required for cultural and language significance.
  • Were the ads served with the target brands? comScore reports that 55% of ads in the EU were served against inappropriate brand content.  A small fraction of served ads even involve fraud.

Ultimately the main question that needs to be answered is, “Do my ads reach the correct audience?” Optimizing these three metrics ensures maximum return on investment (ROI)[xvi] for advertising spend.  Measuring this ROI is essential to justifying future advertising spending.

In the print world the cost of an ad is measured by the cost per thousand impressions (CPM[xvii]). National magazines may charge an average of $6 CPM, whereby TV placements would range between $10 and $35 for a popular sitcom[xviii]. The ultimate success of advertising is measured by subsequent revenue that is generated. But in some cases it is hard to map ROI success of an advertising campaign when other marketing & sales activities are also contributing to the bottom line.

Conversely it is much easier to manage the ROI of Internet advertising since the entire workflow of prospect to client can be closely tracked. All of this activity can even be measured and analyzed in real-time. Online advertising costs are typically cheaper as well, whether it be production costs of a short-form video, or the desk top publishing costs of a small banner ad.  Some companies even save costs by repurposing their print ads and broadcast TV commercials for subsequent internet usage.

Is my content any good? Is it engaging my viewers?The success of online advertising can be dynamically improved with appropriate statistics and data analytics. Armed with this information, a brand administrator can pull content which isn’t performing, and explore why others are successful. Relevant questions that should be answered by an online video reporting engine include:

  • When, where, and what content has been watched?
  • How is the content being consumed, and on which devices?
  • Which content is selling the most or the least, and why?
Figure iv – Advertising Expenditure by Medium

Figure iv – Advertising Expenditure by Medium

The overall health of the global advertising industry has been analyzed by companies like ZenithOptimedia[xix]. From their study Internet based advertising is the only medium showing consistent double digit growth over the past six years (the growth in 2012 was 15%). Internet advertising actually surpasses all other advertising types in overall expenditure, except for television, which continues to grow at a healthy 5% per annum. At these current rates Internet advertising will exceed TV ad spending within the next 10 years.  Interestingly, this coincides with a related study showing that consumers will be watching more online content compared to live broadcast within this decade[xx].

Targeting consumer advertising at a personal level will be a great  opportunity if it’s done with privacy, ethics, and human decency in mind. At least that is our wish. Privacy issues aside, maybe one day our viewers will be pleased to see advertisements that know them well enough that they offer precise suggestions on related interests – guiding them to new products or services that they would otherwise not have noticed. Minority Report[xxi] may have depicted such a utopian advertising future as over-the-top. But if subtle enough, it may be enjoyable to buy something on the back of a personalized ad.  Consumers would certainly find a new appreciation for advertising if it saved them days of researching the purchase themselves. Imagine that users would trust advertising suggestions so well, that they would regard them as highly as recommendations from friends or family. Maybe that’s how advertising is supposed to work?

Image

Figure v – Weekly Viewing Times for Video

 

Read Additional Articles in this Series

I. Consumption is Personal

In the days of linear television, broadcasters had a difficult task in understanding their audience. Without a direct broadcasting and feedback mechanism like the Internet, gauging subscriber behavior was slow. Today, online video providers have the ability to conduct a one-to-one conversation with their audience. Viewing habits of consumers will continue to rapidly change in the next ten years. This will require changes in advertising expenditure and tactics.

II. Granularity of Choice

The evolution from traditional TV viewing to online video has been swift. This has significantly disrupted disc sales such as DVD and Blu-Ray, as well as cable and satellite TV subscriptions. With the newfound ability to consume content anytime, anywhere, and on any device, consumers are re-evaluating their spending habits. In this paper we will discuss these changes in buying behavior, and identify the turning point of these changes.

III. Benchmarking the H.265 Video Experience

Transcoding large video libraries is a time consuming and expensive process. Maintaining consistency in video quality helps to ensure that storage costs and bandwidth are used efficiently. It is also important for video administrators to understand the types of devices receiving the video so that subscribers can enjoy an optimal viewing experience. This paper discusses the differences in quality in popular video codecs, including the recently ratified H.265 specification.

IV. Search & Discovery Is a Journey, not a Destination

Television subscribers have come a long way from the days of channel hopping. The arduous days of struggling to find something entertaining to watch are now behind us. As consumers look to the future, the ability to search for related interests and discover new interests is now established as common practice. This paper discusses the challenges that search and discovery engines face in refining their services in order to serve a truly global audience.

V. Multiscreen Solutions for the Digital Generation

Broadcasting, as a whole, is becoming less about big powerful hardware and more about software and services. As these players move to online video services, subscribers will benefit from the breadth of content they will provide to subscribers. As the world’s video content moves online, solution providers will contribute to the success of Internet video deployments. Support for future technologies such as 4K video, advancements in behavioral analytics, and accompanying processing and networking demands will follow. Migration to a multiscreen world requires thought leadership and forward-thinking partnerships to help clients keep pace with the rapid march of technology. This paper explores the challenges that solution providers will face in assisting curators of content to address their subscriber’s needs and changing market demands.

VI. Building a Case for 4K, Ultra High Definition Video

Ultra High Definition technology (UHD), or 4K, is the latest focus in the ecosystem of video consumption. For most consumers this advanced technology is considered out of their reach, if at all necessary. In actual fact, 4K is right around the corner and will be on consumer wish lists by the end of this decade. From movies filmed in 4K, to archive titles scanned in UHD, there is a tremendous library of content waiting to be released. Furthermore, today’s infrastructure is evolving and converging to meet the demands of 4K, including Internet bandwidth speeds, processing power, connectivity standards, and screen resolutions. This paper explores the next generation in video consumption and how 4K will stimulate the entertainment industry.

VII. Are You Ready For Social TV?

Social TV brings viewers to content via effective brand management and social networking. Users recommend content as they consume it, consumers actively follow what others are watching, and trends drive viewers to subject matters of related interests. The integration of Facebook, Twitter, Tumblr and other social networks has become a natural part of program creation and the engagement of the viewing community. Social networks create an environment where broadcasters have unlimited power to work with niche groups without geographic limits. The only limitations are those dictated by content owners and their associated content rights, as well as those entrenched in corporate culture who are preventing broadcasters from evolving into a New Media world.

VIII. Turning Piratez into Consumers

IX. Turning Piratez into Consumers, I

IX. Turning Piratez into Consumers, II

X. Turning Piratez into Consumers, III

XI. Turning Piratez into Consumers, IV

XII. Turning Piratez into Consumers, V

Content Protection is a risk-to-cost balance. At the moment, the cost of piracy is low and the risk is low. There are no silver bullets to solving piracy, but steps can be taken to reduce levels to something more acceptable. It is untrue that everyone who pirates would be unwilling to buy the product legally. It is equally evident that every pirated copy does not represent a lost sale. If the risk is too high and the cost is set correctly, then fewer people will steal content. This paper explores how piracy has evolved over the past decades, and investigates issues surrounding copyright infringement in the entertainment industry.

About the Author

Home - Signature, Gabriel Dusil ('12, shadow, teal)Gabriel Dusil was recently the Chief Marketing & Corporate Strategy Officer at Visual Unity, with a mandate to advance the company’s portfolio into next generation solutions and expand the company’s global presence. Before joining Visual Unity, Gabriel was the VP of Sales & Marketing at Cognitive Security, and Director of Alliances at SecureWorks, responsible for partners in Europe, Middle East, and Africa (EMEA). Previously, Gabriel worked at VeriSign & Motorola in a combination of senior marketing & sales roles. Gabriel obtained a degree in Engineering Physics from McMaster University, in Canada and has advanced knowledge in Online Video Solutions, Cloud Computing, Security as a Service (SaaS), Identity & Access Management (IAM), and Managed Security Services (MSS).

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Copyright 2013, All information in this document is the sole ownership of the author. This document and any of its parts should not be copied, stored in the document system or transferred in any way including, but not limited to electronic, mechanical, photographs, or any other record, or otherwise published or provided to the third party without previous express written consent of the author. Certain terms used in this document could be registered trademarks or business trademarks, which are in sole ownership of its owners.


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[xvii] Whereby ‘M’ = thousands in Roman numerals

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