1.Nielsen Buys Sorenson

Nielsen announced that they would be buying Sorenson Media, noting in their various press releases that it was a sign of how  serious they were getting about addressable advertising. While that’s no doubt true, there’s a lot more here to unpack.

Why It Matters

Sorenson was in Chapter 11, having filed for bankruptcy relief in order to get out of what court papers called an “onerous” contract with local broadcast giant Sinclair. Word on the street was that what was really "onerous" was that Sorenson’s promised software solution never worked the way it was supposed to, much to Sinclair's dismay

That promised solution involved using ACR (automatic content recognition) technology to identify users and the shows they were watching, at which point Sorenson, in conjunction with the smart TV OEM, would insert an addressable ad on top of the local broadcast feed.

Given that (a) Nielsen only paid $11.25 million for the deal and (b) the only other bidder was Sorenson’s found Jim Sorenson, there’s probably a whole lot more going on there.

Some theories we’ve heard are:

It’s a patent play and Nielsen feels good that with a little love and a little money, they can get Sorenson’s overlays to work a promised. 

It’s a PE play and Nielsen, whom private equity firms have been circling for a while now, is trying to prove that it’s woke and down with the shift to addressable, thus making it (or its new addressable division) more attractive to potential PE buyers.

It’s a legit attempt by Nielsen to make addressable happen and they are planning to integrate Sorenson into a division that already includes their existing Gracenote technology (Gracenote collects ACR data via LG), Qterics, a smart TV software firm that Nielsen picked up last year, and Media Tek, a smart TV chipmaker they recently teamed up with.

Remember too that none of these reasons are mutually exclusive and that all of them can be in play at one level or another.

Several industry insiders have told us that they’re hoping that Nielsen’s involvement in the addressable market can help push it from being a niche product to a more mainstream one, the theory being that Nielsen is a big enough name to get even the most old school of marketers to conclude that, like the internet before it, addressable isn’t just a fad.

At the same time, others have questioned the value of the paper and patents that Nielsen bought, especially in regards to where Samsung fits into the picture, given that the original Sinclair deal was allegedly built around Sorenson collecting data from Samsung smart TVs.

While Samsung controls close to 40% of the smart TV market in the United States, the company has not previously allowed any third parties to have access to its ACR data. Thus, people we spoke to were unsure what sort of deal Nielsen would wind up with—if they wound up with any sort of Samsung deal at all.

In other words, a whole lot of uncertainty.

What You Need To Do About It

Not much you can do other than sit back and watch how this all plays out.

Keep an eye on how well and how quickly (not to mention "if")  Nielsen integrates Sorenson with Gracenote et al, if they’re able to iron out the alleged glitches in Sorenson’s software (changing channels in particular) and, finally, how and if both Samsung and private equity firms play a role in this.

We’ve heard just about every opinion under the sun around this, from “clutch move on Nielsen’s part” to “it’s the cherry on the whipped cream on a sh*t sundae,” so this should be a fun one to watch as it plays out.

 

2. Are The Oscars A Victim Of The Content Bubble?

Lots of talk this week about how interest in the Oscars is at an all time low. Now granted they have not done themselves any favors, what with the no-host-this-year thing and the we’re-not-going-to-play-all-the-nominated-songs-oh-what’s-that-Gaga-okay-we-are escapades.

But one theory that’s getting bandied about a lot of late is that movies in general are less of a big deal at a time when there’s so much good TV. For where there was once a huge quality gap between “the cinema” and "the idiot box", that line no longer exists and that both talent and audiences are now evenly spread over both mediums, which makes it hard to focus people’s attentions on movies as an example of a superior art form.

Why It Matters

Simmering right underneath that argument about aesthetics and quality is the fact that TV-first companies like Netflix and Amazon are getting very involved in the movie industry right now, up to and including the fact that Netflix’s movie Roma is a front runner in a number of categories and many Hollywood types are not happy about Netflix releasing the movie on TV at around the same time it released it in theaters, making it likely more people have actually seen Roma on TV, which further blurs the already blurry line between the two video mediums.

There are all sorts of issues at stake here—everything from battles over windowing (how long it takes a movie to get from the theaters to pay per view to rental to streaming) to why movies are having such a hard time attracting customers (cramped multiplexes and 108-inch UltraHD TVs) to how much everyone is getting paid and by whom, all the way down to what the actual distinction is between a four-hour TV series like Collateral and a three and half hour movie like Gandhi and should we even care?

What You Need To Do About It

If you’re a studio, you probably want to play both sides. Audiences don’t seem particularly bothered that movies are now available on TV—it’s a convenience for most people and allows them to actually watch more movies, especially given the prices of tickets, popcorn and teenage babysitters.

We’re thinking that history is on the side of the Netflix’s of the world and that the theater chains and movie divisions can only keep their defenses up for so long before it all comes crashing down. One thing about the internet is that it doesn’t take kindly to artificial barriers that prevent people from getting access to content, and this seems like it’s about to be example number 567 of how that plays out.

Which may actually open up an opportunity for filmmakers to create the sort of movies that really are best seen in a theater and for audiences to rediscover the value of watching something on a large screen in the company of a large audience.

So keep an eye on how Roma does tonight, whether the Academy does something foolish next year like try and kick Netflix and Amazon out, and whether, as the content bubble continues to grow and the Flixcopalypse is upon us, audiences still bother to make distinctions between movies and TV.

We suspect the answer will be "not much of one."