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Week In Review: Fox Announces Addressable Advertising Plan With Comcast and Hulu; Netflix Still Going Strong, Defies Expectations

1. Fox Announces Addressable Advertising Plan With Comcast and Hulu

Lions are lying down with lambs, pigs are flying and devils are lacing up their ice skates. Fox, a TV network, has announced a deal with Comcast, an MVPD, and Hulu, a streaming service, to allow for addressable advertising.

Now granted it’s a trial program and it only works with Fox’s On Demand shows, but still… this is the first crack in the wall and kudos to our friend Fox’s Joe Marchese and his team, and the folks at Comcast and Freewheel for making it happen. (Freewheel, which is owned by Comcast, will actually serve up and place the ads.)

Why It Matters

If it’s going to survive, the TV industry needs incorporate addressable advertising into its offering. While the networks all know that, they also know that a shift to addressable will likely completely disrupt the current system which is based on selling most of their inventory during the upfronts each May.

They also know that right now, the only way to serve up addressable advertising is via the MVPDs and their set top boxes, and since networks and MVPDs don’t really like or trust each other all that much, that hasn’t happened.

Fox’s new trial plan, which includes all Fox networks: FX, NatGeo, et al., also loops in the Open AP platform they launched with Turner and others earlier this year to allow for indexed buys on linear. (Indexed means you’re still buying the entire audience for the show, you’re just buying it on a show that indexes highest with your target audience.)

But given that the most desirable audiences (upscale and younger) are the ones most likely to watch shows via VOD, as well as the rapid growth of time-shifted viewing overall, the ability to target those audiences via addressable is very exciting and a huge breakthrough for the industry at large.

What You Need To Do About It

If you’re a network, watch to see how Fox’s trial plan plays out and if it appears to be working, do something similar ASAP.

If you’re an advertiser, put some money aside for this ASAP, as you’ll want to get out ahead of the curve in terms of understanding how it all works.

And if you’re an MVPD, get over your fear of Freewheel or use DoubleClick or your own proprietary platform. This is the sort of program you want to be involved with, so start talking to the networks.  You may even be able to figure out a way to boost your own addressable offering at the same time, making it an even bigger win for you.

 

2. Netflix Still Going Strong, Defies Expectations

Netflix defied expectations again this last quarter, adding 5.3M new subscribers (850K in the U.S. and 4.45M internationally.) That’s almost one million more subs than the 4.4M that Wall Street had predicted.

The numbers, especially the U.S. numbers came as a surprise, since Netflix had not had any breakout hits and actually went so far as to cancel a few of their shows. (RIP The Get Down.)

Why It Matters

Part of Netflix’s appeal, as we’ve noted many times before on here, is that it has more shows you might want to watch than traditional networks, what with reruns, movies and an increasing amount of original content, and you can watch them any time you want.

Plus it’s got that thing all modern success stories, from Whole Foods to Starbucks to Uber have: buzz. Which means that Netflix doesn’t need advertising to draw in subscribers. Everyone’s heard of them, everyone’s talking about them, everyone wants to be them.

That’s something no other platform is ever going to be able to replicate and why all of the next round of new entrants into the industry are going to come from companies you’ve already heard of.

Amazon is already in the market and Facebook and Apple are not far behind. Microsoft doesn’t seem interested, Twitter doesn’t have scale, Snap would have to pivot from short form, but maybe. And then there’s Samsung.

Samsung owns over 40% of the smart TV market in the U.S., plus a whole lot of smart phones. Together, that gives them a pretty solid base from which to launch, especially if what they’re launching is an AVOD (ad-supported) service, as they’d be able to target ads to specific users of their various devices and, as noted above, the TV industry needs more ways to serve up addressable advertising.

What You Need To Do About It

If you’re a network and you’ve been heeding Discovery CEO David Zaslav’s words about not selling all the programs you own to Netflix, then keep on heeding them: they’re only growing bigger and the more you can starve them of the sort of reruns of hit series that make their catalog so attractive, all the better.  OTOH, the number they’re willing to spend on original content now seems to have ballooned to $8 billion, so they may not care.

If you’re an MVPD, you know what we are going to say: be like Comcast. Strike a deal with Netflix and get them on your service ASAP. You get added stickiness. They get your tech-phobic customers and marketing efforts, your users get a single bill and a better user experience.

And if you’re an advertiser? Think about branded content, sponsorships and other non-interruptive models, because Netflix, they don’t play no ad game.