Week In Review: Spotify's Discover Weekly Is A Hit; VOD Ad Impressions Double
1. Spotify’s Discover Weekly Feature Is A Surprise Hit
We've been banging on about recommendations for a while, how they are going to be incredibly important for the television industry going forward, helping to create greater loyalty among consumers and alternative revenue streams for MVPDS via paid recommendations.So we were quite pleased to see that Discover, Spotify's weekly recommendation playlist, has become a smash hit.Why It MattersMusic, like television, is tough to keep track of. There are the mainstream top 40 hits, but after that it's sort of a free for all as radio, which once brought new acts to the masses, has abdicated that role.Enter Discover Weekly which has gained a big following for its ability to accurately predict the music it's listeners will like.And it's "accurately" that's so key: the reason so many recommendation services fall short is that their recommendations aren't very good. Music services have it easier in that there's way more music to choose from and their listeners give them a larger sample for their algorithm to draw upon, but that doesn't mean a good TV recommendation service can't deliver with the same degree of accuracy. Especially if that service also serves up short form video.The benefits are numerous, including greater customer satisfaction, stickiness, more time spent watching and increased revenue as recommendations can be monetized.What You Need To Do About ItIf you're an MVPD you should probably hire the people who built Spotify Discover. Barring that, look to build or buy a recommendation system, preferably one that takes both short form and long form into consideration.If you're a brand or a TV network wait until these recommendation engines are in place and use them as ad venues. They will be getting a lot of eyeballs.
2. VOD Ad Impressions Double From 2015
Q2 2016 saw 4.85B VOD ad impressions, nearly double Q2 2015’s 2.775B impressions. Even more telling: there were 4.18B mid-roll impressions, up from 2.34B a year ago. Another telling stat: 22% of the VOD ads were network tune-in ads, up 11% YOY. Why It MattersTime shifting is getting more and more real and the networks are going to need to adjust their advertising strategies to adapt to it. VOD is a great medium to promote both network TV shows and brands because there are fewer commercials and viewers who have chosen to watch a show on VOD are unlikely to change that channel. (Partly out of loyalty, partly because it could take another 10 minutes of navigating through awkward MVPD set top box UIs to get back to the show, but regardless, they still watch.)The shift to VOD will impact the upfronts, where advertisers are paying for specific viewers. The fact that there are fewer viewers will actually make that inventory more valuable, as there will be fewer commercials and scarcity drives prices up. At the same time, the larger audiences for VOD might increase the value of those spots and also influence creative decisions: if brands don’t know when a spot will be watched, references to seasonality and other time-sensitive elements will need to be taken into account.What You Need To Do About ItReevaluate your VOD ad strategy. That’s true for MVPDs, who’ll need to make VOD easier to find and navigate through, for networks who should continue to use VOD for promotion and for brands who’ll want to increase their spending on VOD and pay attention to their creative units.
TV[R]EV is written, curated and incubated by the BRaVe Ventures team. Find TV[R]EV on Facebook and Twitter, and sign up for the newsletter to stay up to date on the TV[R]EVOLUTION.
