Bundles, Bundles, Bundles: What We Learned At The Stream TV Show
So hot on the heels of Cannes, we had the StreamTV Show last week. TVREV programmed the first day, a three and a half hour extravaganza called “The Future of FAST Supersession.”
It was, to be fair, more about the future of TV than the future of FAST, but that lacks alliteration, so there you are.
The event focused on four key trends we are seeing in the industry right now:
The battle for control of the TV operating system
The challenges faced by local TV in the age of streaming
The growth of contextual ad targeting
The continued evolution of FAST
The day was capped off by an epic OTT rap about the continued relevance of The Great Rebundling by our boy Kirby Grines
The rest of the conference was also epic, the highlight for me being a keynote delivered by Needham’s Laura Martin, the Wall Street analyst I find myself agreeing with most.
Martin had interesting thoughts on a number of topics, including a skepticism about shoppable content, but the most important takeaway is her prediction that the next giant tech company, the one that will dominate the AI world, will be an American company, because our entrepreneurial infrastructure is unrivaled anywhere in the world.
She cited examples of how American companies came to dominate each new tech innovation— Microsoft and the PC, Apple and the smartphone, etc., and so Martin predicts that the company that dominates AI will be an American start-up, created by kids who are still in high school now but who have an intuitive understanding of AI and the possibilities it holds.
Why It Matters
Coming at a time when there’s a lot of pessimism about America’s future, it was a heartening message, one that I think makes a lot of sense.
Back to CTV, though, here are the key takeaways from each of our sessions.
The Battle For The TV OS matters because each half a percentage point can be worth tens of millions of dollars. 40% of the market is still up for grabs too, mostly outside of the US, which is why the battle doesn’t get a whole lot of play here.
While user experience matters, price likely matters more—there has not been much innovation in actual TV sets for several years now, and there was a feeling that price was often the key differentiator.
And how do TV OEMs keep prices down? By the ad revenue they get from the home pages on their operating systems and their FASTs.
So there’s that.
The other reason operating systems matter is that they have a whole world of data. That means they can, among other things, help surface content and that with the advent of AI, that surfacing can be much more personalized and accurate, even taking into account multiple viewers.
We also spoke about the notion of personalized channels. This is something near and dear to my heart, as nine years ago I wrote a book called Over The Top: How The Internet is (Slowly But Surely) Changing The Television Industry that had a chapter called “The Spotifyization of Television” which was all about how TV would soon be doing things similar to Spotify’s Daily Mixes.
“Soon” being relative, of course.
How Local Broadcast Handles The Shift To Streaming matters because at many levels local broadcast is the most vulnerable section of the industry as streaming advances and it has, by and large, been slow to respond to the trend.
FAST would seem to be the ideal solution for local broadcast, a place for them to move their news shows, to personalize those news shows, and to use their familiarity with the local market to maintain their dominance in the ad market.
There are numerous bumps on that road though, including streaming companies and start-ups that are also targeting local news and the realization that all advertising is local these days thanks to geotargeting.
The Growth Of Contextual Ad Targeting matters because contextual seems to solve the world of hurt that is currently engulfing streaming advertising.
Key takeaways here start with the fact that agencies and brands have two incompatible definitions of what streaming actually is. There are those who (correctly) view it as television, a more addressable version of traditional pay TV, but TV nonetheless, and, as such, it needs to be planned and bought together with traditional pay TV.
But then there are those who throw it into the digital bucket where it gets lumped together with social video and display advertising and where the general attitude is “you reached your target—why do you care where it ran?”
And where whatever made it special—the emotional connection created by sight, sound and motion—gets thrown to the ground and ignored.
Buying and selling streaming like digital has led to a world of problems, everything from overfrequency to privacy concerns to issues around measurement.
The promise of contextual is that in addition to giving audiences more relevant ads, it can also make all of those pain points disappear.
Which is pretty huge in and of itself.
There was also discussion around what “contextual targeting’ really is, with the consensus being that it can be everything from genre and actors to emotions and action on screen. Meaning it can cover a wide range of inputs.
The final benefit to contextual is that it can help advertisers find relevant content in genres like news that they traditionally avoid. Because while no one wants to run ads against a story about politics or a fatal 10 car pile-up, most news content is actually fairly positive, stories about centenarians celebrating birthdays and “top 10 travel tips for your next beach vacation.”
And the good news is that contextual keeps getting better and more precise.
The final topic we addressed was the Future of FASTs and trends in the segment.
One key takeaway, confirmed by multiple representatives of the various FAST services, is that said FAST services are working to make the user experience better in terms of the integration of linear and on-demand. So that if, say, someone comes into a series at Season 3, Episode 4 on linear, they can easily go into on-demand and watch the series from the beginning.
This is part of an overall emphasis on user experience that includes greater levels of personalization. So that, for example, the home screen will be able to better display shows that it predicts a user will want to watch while also displaying more personalized ads.
Another topic was the ability of niche services to survive in a world increasingly dominated by larger media companies. There, the consensus was that niche services with a strong product offering and a dedicated and loyal user base were the ways that niche services would survive. The ability to offer more hours of programming was also key—services increasingly want their channel partners to have bigger libraries.
The final FAST trend worth noting was something that came up outside of the show—the big SVOD services are all going to start rolling out FAST services in the Global South where consumers don’t have money for TV subscriptions. Bloomberg’s Lucas Shaw is reporting that Netflix is about to do so and it likely won’t be long before others follow suit.
While the SVODs will try and delay the rollout to the US and Europe as long as possible, in the end they will all end up with a three-legged stool consisting of a FAST, with mostly library content, plus subscription ad-supported and ad-free tiers. The goal of the FAST will be to get viewers to upgrade to a subscription plan, largely by teasing them with older seasons of originals and pushing them to subscribe to watch the current season. (This is very similar to how networks like AMC used to use Netflix back in the day, pushing out older seasons of The Walking Dead in order to drive tune-in.)
What You Need To Do About It
If you are anyone in the industry, you need to stay on top of the trends. TVREV can help.
All of these trends matter and will help shape the future of the industry at large and your business in particular.
We are big fans of the StreamTV Show, both as a place to learn and a place to network. (Denver in June isn’t too shabby either.) So be sure to check that out next year.
In the interim, remember that there are FAST services and FAST channels and they are two different things, and that it’s easier to say “streaming” than to try to explain the difference between OTT and CTV.
