1. Amazon May Be Launching An Ad Free Channel

An unverified report in a tech publication this week has lead to much speculation that Amazon is going to be launching a free ad-supported channel on its Fire TV devices sometimes soon. Said speculation coming about because the notion makes a whole lot of sense: ad-supported OTT is booming right now and Amazon is well positioned to take advantage of it. (More on that in a minute.) In the interim, however, Roku’s stock took a hit.

Why It Matters

Ad supported OTT is blowing up (in a good way) and, as noted here before, Amazon has two really big things going for it.

The first is all that data. Because (all together now) Facebook knows who we want to be, but Amazon knows who we really are.

Facebook knows we "Like" Blue Bottle coffee because we think it makes us look cool. Amazon knows we have a standing order for Maxwell House.

So there’s that.

Then there’s Amazon’s unique ability to run ads that people don’t realize are ads. For instance, they could sell the aforementioned Maxwell House a spot on one of the new app’s shows. But instead of it showing up as an interruptive ad during the show itself, the ad would show up on the Amazon home page of people who’d watched that show as a “sponsored” product.

Since Amazon is just the twenty-first century version of Macy’s, no one will find it odd that it’s there—much as no one would find it odd had Maxwell House set up a booth to give out free samples of coffee in a physical Macy’s.

In fact, we’d bet that a goodly number of those people would be all “How kind of that nice Mr. Bezos—I needed to get more coffee and he helped me to remember.”

So there’s that too.

The success of the app will, of course, depend heavily on execution—everything from which programs and movies they get and (most important) how well designed the interface is and how easy it is to use.

Wall Street’s rapid dissing of Roku is curious, though not out of character—the bulk of investors understand TV about as well as the denizens of Silicon Valley do. Regardless, it’s unlikely to be an either/or scenario—the ad supported app is not going to convince people to buy  Fire TV instead of Roku, nor is it likely to hurt Roku in any other fashion. If anything, Roku will be helped under the Rising Tide Lifts All Boats theory—the more ad supported inventory there is, the more attractive that inventory will look to advertisers, especially since the Roku and Amazon apps will likely have fairly identical audiences.

What You Need To Do About It

If you’re an advertiser, here’s a chance to prove us right—up your ad-supported OTT budget since regardless of which device the user has (Amazon and Roku are poised to dominate the streaming device market, and Roku already has 25% of the smart TV OS market and a new deal with JVC to show off) they’re going to be watching more of it.

If you’re a network, vMVPD or MVPD, take note—while a rerun channel is likely just going to be a sometime option, Amazon could start throwing some of its older originals on there in a few years and Roku could make a deal with a studio to do the same. And while it’s unlikely anyone is dropping pay TV for one of those services, they could prove to be major attention thieves.

2. Why Didja Could Disrupt Local Broadcast

Didja is a new service that shows local broadcast TV stations online. They recently announced apps for Apple TV and Amazon Fire, with Roku to follow shortly. And while they are currently only available in a few west coast markets and their offering at present consists almost exclusively of Univision and similar stations aimed at bilingual households, it could be a major disruptor if it manages to sign up a passel of network affiliates.

Why It Matters

There’s a reason pay TV is so popular in America and it’s not because Comcast is so damn charming.

It’s because over the air reception in America sucks big time and with the advent of HD over the air, the problem has only gotten worse. (Kids—ask your parents or grandparents about having to hold the rabbit ears or go up on the roof with dad to turn the antenna before the big game.)

One of the reasons we roll our eyes at stories about Millennials turning to antennas is that we know their little hearts are about to be broken, as a good rainstorm can make NBC or CBS all put impossible to tune in.

By providing access to local TV stations for free, Didja makes it much easier for viewers to actually cut the cord,  as, if nothing else, they’d have all their options (Netflix, Hulu, Amazon, HBO and all their local broadcast channels) available to them on the same device. This could be a boon for older viewers or for light TV viewers who don’t want to give up local broadcast. (The service comes with a program guide as well as a $5/month cloud DVR option.)

For advertisers, Didja conceivably offers the chance to run local linear addressable, given that they have the IP address of all their subscribers and could ask for a phone number or email during sign-up, too.

Now all they’ve got to do is use some of the $12MM they raised last year to help bring in the big guns—the English-language broadcast stations, most of whom are either network O&Os or affiliates.

What You Need To Do About It

If you’re a local broadcaster, you should probably talk to Didja. While there are no doubt numerous legal issues to be ironed out, especially for O&Os and affiliates, the service is unlikely to cannibalize any of your existing viewers and, if anything, will help you connect with a younger audience.

If you’re an advertiser and you’re looking to reach specific audiences in LA, the Bay Area or Phoenix, check them out. They could prove to be a great deal, especially if you’re looking to reach a specific segment of that audience.