1. The Sky Auction Is On
Comcast and Disney (or Disney/Fox, to be more accurate) are having their final showdown over Sky this weekend, in an unnecessarily complex process known as a blind auction. It seems that there’s an entire sub-industry built around helping people understand blind auctions and succeed at them, so this should be fun to dissect afterwards.
Though personally, it would have been way more fun if Bob Iger and Brian Roberts just did three rounds of rock, paper, scissors.
Why It Matters
There are a lot of moving pieces here. The two biggest ones are Sky and Hulu.
Sky has a strong presence in Europe, lots of well done advanced advertising products plus some excellent European sports rights deals, and anyone who wants to take on Netflix and Amazon is going to need all of those things.
Hulu has advanced advertising products, a much larger library than Netflix and Amazon, a rapidly growing user base, a successful vMVPD … and three different owners.
That last point is key. Right now, post-Fox-Disney merger, Fisney (Dox?) owns 60% of Hulu, Comcast owns 30% and AT&T owns 10%.
The thing is, as our boy Rich Greenfield keeps pointing out, is that Disney needs Hulu like a fish needs a bicycle: they’re in the process of launching two Disney-only OTT apps and while using Hulu as the base for the adult-focused app might have worked, they don’t seem to be going there.
Comcast, OTOH, could definitely make use of Hulu. They’ve been behind the curve on launching their own OTT app, they need a way to distribute all that NBCU programming domestically and internationally, and Hulu could provide them with an easy way to expand their offering into Europe.
The vMVPD part is key too: the free standing app thing is fine until it isn’t: consumers don’t like complexity, don’t want to have to deal with multiple network apps, don’t like finding out that when the price of all those apps is added together, the end result is a whole lot of Benjamins. So it’s more than likely, from where we’re sitting, that the Hulu vMVPD will be worth something to Comcast in the U.S. (especially if they bundle it with Comcast broadband) and the Hulu VOD platform will be useful for them in Europe.
Which is a long-winded way of saying that regardless of who wins today’s auction, the story is only half over: the Hulu piece still has to be resolved because having Disney and Comcast co-owning it after today is going to be more than a little awkward.
(We had thought that it would make a lot of sense for Comcast to offer to buy Disney’s share of Hulu in exchange for letting them win Sky, and while it’s possible that was offered up behind closed doors, it hasn’t happened, so we’ll just have to sit tight. We will do an update to this when the victor is announced.)
What You Need To Do About It
Not much you can do. Just get the popcorn and hit “Refresh” on your Twitter feed a lot. #StillMissingThatMacOSDesktopApp
UPDATE: Reports are in saying Comcast outbid Disney, £17.28/share versus £15.67/share. And while it’s not really, really over until Sky’s shareholders say it is, the fact that the auction seems to have a lot in common with Final Jeopardy makes us happy.
2. “Premium Video Ads” Are Mostly Showing Up On TV
Freewheel released its latest Video Monetization Report, which “tracks marketplace trends on premium video consumption and advertising across STB VOD, OTT, Desktop, Smartphone and Tablets” which showed that 57% of digital video ad views in Q2 2018 were seen on actual TV sets (versus laptops, tablets and smartphones.)
Why It Matters
Ad-supported OTT is booming. (Which is why our next TVREV special report is all about ad supported OTT and other advanced advertising.)
By “ad supported OTT” we’re talking about anything that’s not live, set-top box delivered television. But particularly about OTT VOD apps, everything from Hulu and CBS All Access to Pluto, Xumi and Tubi.
People are watching more ads on those platforms because viewers are spending more hours on those platforms.
Advertisers are starting to notice and appreciate that trend too, because ad-supported OTT combines digital-style segmentation and targeting with the “bigness” of TV: high production value commercials that are seen on a large screen.
There’s also context: brands running on platforms showing TV shows know they’re not going to run into brand safety issues. Or fraud either, for that matter. (For consumers, there’s the lure of much smaller ad loads than they’ll find on traditional TV.)
Then there’s attribution: since OTT devices have IP addresses associated with them, companies like iSpot and Data + Math can use that data to understand what ads drove what actions at different points in the sales funnel, via a process known as multitouch attribution.
All of that, in aggregate, is why it’s not surprising that we’re seeing more ads being run on TV-like platforms than on purely digital ones.
What You Need To Do About It
If you’re an advertiser or ad agency and you haven’t started looking into ad-supported OTT, now is the time. (There’s a report coming out later this year that should prove helpful.)
If you’re a platform, vMVPD, or one of the companies whose technology helps power the ad-supported OTT space, you should (a) be happy at how well ad supported OTT is doing and (b) consider becoming a sponsor of our report. You know how to reach us.