Lots Of Streaming Newbies Still Out There, Google Delays The Demise Of Cookies

1. Lots Of Streaming Newbies Still Out There

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A recent study from Interpret says that over the next three months, around half of the people buying smart TVs and connected devices like Roku and Fire TV will be streaming newbies, first time entrants into the smart TV and connected device market.

Why It Matters

There are two key reasons why this matters. 

The first has to do with the actual device ecosystem. As per our upcoming series on the Emerging Smart TV Ecosystem, smart TV OEMs have done a great job of improving their interfaces and user experiences to the point where they should be able to convince new users they don’t need a streaming stick. 

That could cut into Roku and Amazon’s bottom lines, though the former has invested heavily in partnering with OEMs so that the Roku operating system now powers over 25% of the smart TVs sold in the U.S., no external device needed.

Amazon is moving in that direction too, striking deals that will have Fire TV as the smart TV’s interface.

And for consumers who are wedded to the notion of a connected device, Roku and Amazon still have strong name recognition and benefit from the additional marketing that being a smart TV OS brings them--I may not buy that TLC TV with “Roku Inside” but I’ve seen “Roku Inside’ touted as an important selling feature and so if I go the streaming device route, it’s going to be on my list.

And Amazon has a whole marketing flywheel all their own, where a search for “smart TV” can ensure the presence of a low-priced Fire TV every time you log onto the site.

That’s why I believe the market is going to be closed off to newcomers like Walmart, Comcast and even Google, as there is nothing about their products that is markedly better than Roku or Amazon and it’s going to take a huge marketing effort along with a huge shift in consumer attitudes in order to allow them to achieve the sort of market share they’ll need to actually pose a challenge to Roku and Amazon, let alone Samsung, Vizio, LG and Sony. 

If they do stick around, they’re likely to be in Apple territory--their massively overpriced Apple TV device still  holds on to a small piece of the market thanks to a dedicated fan(boy) base.

The second notable thing about the Newbie Influx is the effect it is likely to have on programming.

Until now, the streaming audience has largely been younger, more educated and more affluent than the general population, and the original programming on streaming has reflected that.

That means that with the exceptions of Disney+ and Discovery+, everyone’s been creating HBO-like programming, which is exactly what said younger, more educated and affluent audience likes to watch. 

Hence TV’s second Golden Age.

The entrance of older, less educated and less affluent viewers to the streaming ecosystem means that the various Flixes are going to need to start producing programming aimed at that demographic. 

Which is not a bad thing, as it actually provides an opening for many of the streaming services to differentiate themselves from their peers. 

Netflix has been leading the way here, hiring Shonda Rhimes, Ryan Murphy and others who have had much success on network prime time with shows that are well-received but nowhere near as quirky and “HBO-like” as say, Orange Is The New Black or BoJack Horseman.

And now it’s time for the other major streaming services to get on that bandwagon and produce programming that will help set them apart from their competitors. 

What You Need To Do About It

If you’re on the smart TV OEMs, you need to really market the fact that your interface is vastly improved and that consumers no longer need a streaming device. You can’t rely on viewers to figure it out themselves. 

That means not only running ads about the improved ease of use, but also creating in-store displays and demos, educating sales teams and creating materials that work on Amazon and other ecommerce sites. 

You need to be blunt about what you’re saying too, directly addressing the fact that the viewer won’t need a separate streaming device. (You might also want to hurry up and clinch any outstanding carriage deals with Flixes that might cause one of these new viewers to decide they do need a peripheral device after all.)

If you’re one of the Flixes, it’s time to open yourself up to shows that you and your peers would never watch. There’s a whole audience out there that doesn’t love the sort of HBO-like programming you’ve been making, finds it “confusing” or “boring” and the truth is there’s more of them than there are of you. 

It’s also a great way to set yourself apart from your competitors. You can be the Flix with all the great sitcoms, or all the great crime dramas or all the great reality competition shows. But you do need to do it because right now you all seem to have the same programming. The same really good programming, mind you. But the same programming nonetheless.

2. Google Delays The Demise Of Cookies

Google was going to follow in Mozilla and Apple’s footsteps and do away with cookies on its super popular Chrome browser next year, but for a host of reasons, they decided to hold off for another year, until the end of 2023.

The company blamed its decision on ongoing negotiations with the UK’s Competition and Markets Authority (CMA) but the reality is it’s stuck between a rock and a hard place as doing away with cookies actually leaves Google in a better position vis a vis other digital advertising vendors which pisses off regulators, while keeping them raises all sorts of valid privacy concerns, which pisses them off even more. 

Why It Matters

You could easily write a book on why Google’s cookie policies matter, so I'll simplify things here and focus on how they affect the TV industry.

TV is the OG cookie-free electronic medium and so many in the TV space are thinking they will benefit from the demise of cookies, as brands turn to TV to be able to better track audiences.

The ability to track audiences and their behaviors was, you’ll recall, the key selling point for digital advertising, which promised supremely accurate direct response-like results to advertisers who had previously had very little insight into how their advertising was actually performing.

This lack of any sort of attribution, of course, left marketing teams exposed to charges that they were eating up precious funds wasting money on expensive TV commercials that did not work, or, more accurately, that no one could prove worked. With digital, they could produce all sorts of shiny four color charts showing exactly how well their banner ads worked and how they were able to use cookies to retarget consumers for years on end.

Extra points for the fact that senior management rarely had any idea what they were talking about but knew it sounded modern and impressive.

And while brands are relooking at TV now that it’s gone digital (TV’s ability to create emotional connections is still quite powerful), the TV industry has a lot of work to do to make it easy for brands to target the audiences they are looking for in a privacy compliant manner.

To begin with, there’s the fact that TV is both viewed and measured on a household basis. So even though one person in the household may have given a company permission to track their viewing so as to receive more relevant ads, that doesn’t mean everyone in the household has.

So there’s that and the fact that everyone and their brother is trying to set up a walled garden which makes it almost impossible for advertisers to make anything close to a cohesive TV buy.

What You Need To Do About It

If you're the TV ad industry, you need to get your act together about data and privacy, though fortunately, you’ve been given a little more time to do so. 

The bottom line is that everyone needs to get over themselves and realize that no one company can dominate the market and that by working together everyone will wind up making more money.

Fortunately, there seems to be a growing recognition of how important this all is. There’s a consortium called the TV Data Initiative that is trying to create some sort of order out of the data chaos, (TV[R]EV is their media partner) and there are other groups and consortiums as well, e.g.,  Project OAR and their attempt to create standardization around linear addressable.

This is a golden opportunity for the television industry to get bigger pieces of advertiser’s budgets and to get money from new advertisers as well.

So the key thing they all need to do about it is to get over themselves and not blow this opportunity.


Alan Wolk

Alan Wolk veteran media analyst, former agency executive, and author of "Over The Top. How The Internet Is (Slowly But Surely) Changing The Television Industry" is Co-Founder and Lead Analyst at TVREV where he helps networks, streamers, agencies, brands and ad tech companies navigate the rapidly shifting media landscape. A widely published columnist, speaker and industry thinker, Wolk has built a following of 300K industry professionals on LinkedIn by speaking plainly and intelligently about TV and the media business. He is also the guy who came up with the term “FAST.”

https://linktr.ee/awolk
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