Last month, we attended and spoke at the NCTC’s Winter Educational Conference, where we announced our latest partnership. There were several themes throughout the show that caught our eye. It is impossible to ignore the market shifts and apparent audience fragmentation, but there are technology innovations like IP, OTT, linear parity (also referred to as multiplatform parity), and virtual interconnects that operators can embrace to maintain competitive advantage and deliver an enhanced consumer experience.
With technology trends come challenges but also many opportunities to open up new revenue streams. Read the following blog to dive deeper into the latest advertising methods that can increase revenue instantly, while also optimizing inventory.
You can’t walk into an electronics store without being bombarded with promotions for all things connected TV. And as the cost of simple add-on boxes like Roku or Amazon’s Fire TV continues to drop in price, it’s a sure bet they’ll continue flying off the shelves. Let’s face it, sometimes using apps to watch what we want is just easier.
This is not a new phenomenon, but by now, every media stakeholder has accepted that this is the future. It has led some longtime video service providers to question whether they will still have a place in it. Completely transforming the viewing experience and competing with agile, digital native companies operating at global scale is not easy or cheap. There’s also no one, proven path forward – but the obstacles are clearing with the help of advancement in managed, cloud-based video services that are making it easier to do on digital what is already being done on traditional infrastructure.
Sitting still is not an option
According to Comscore, 64 million U.S. households use OTT. The Video Advertising Bureau has estimated that the number of households using only OTT services and devices has tripled since 2013, rising to at least 14 million homes.
Traditional video operators know they can’t sit still. In an app-based world, there is simply not a long-term opportunity tied solely to the set-top box and legacy delivery infrastructure. Of course, while launching an app solves one challenge, it opens the door to a host of others. How will quality be assured? How will rights and access be managed? What teams and infrastructure do I need in place to support it? And how the heck do I monetize it?
These are all issues we at Imagine have been talking through with independent video operators eager to take streaming plays from the experimentational phase to full-fledged services. The cloud is playing a significant role here. It is offering scale, lowering upfront investments, assuring quality and removing heavy management burdens. Comcast has successfully licensed its impressive, feature-rich X1 platform throughout North America. And global streaming TV platform provider MOBITV is making significant inroads with independent operators across the U.S.
The monetization piece? We’re working with Amazon and MOBITV to simplify how next-gen ad delivery capabilities are rolled out to ensure operators can develop a thriving business around the new offerings they are bringing to market, while protecting ad revenue on non-app platforms like set-top boxes. The ace up the sleeve they will have on this front is “linear parity,” which essentially allows them to mirror on digital what they’re doing in their traditional business.
Breaking free from past limitations
Legacy ad splicing and insertion architectures have historically been incompatible with current-generation systems that support content and ad delivery to connected devices, forcing a fragmentation of the ad ecosystem through separate buying, selling and delivery of traditional TV ads and digital ads. But removing this barrier opens a whole new world for sales organizations that are empowered to sell ads exactly as they have been, with the assurance that insertions will happen whether content is viewed on a regular set-top or that brand new Roku stick.
In this vein, linear parity delivers big for TV providers on a number of fronts, enabling
- spot-based advertising to reach audiences with a specific ad in a given program no matter what screen is being used;
- audience-based advertising to blend digital and traditional video eyeballs for more efficient utilization and targeting of ad inventory;
- greater agility in ad scheduling and insertion due to the implementation of more flexible IP systems;
- reductions in CapEx and OpEx with the elimination of parallel ad systems;
- more cohesive sales and buying strategies as silos are collapsed; and
- such a strategy to support the industry’s long-term shift to all-IP delivery.
With these advancements in play, operators that once struggled trying to determine how to compete with digital upstarts are suddenly positioned to lead in their respective markets.
In our next blog on this subject, we’ll dive into how linear parity is actually implemented and key benefits of deployment. Read further about monetizing in today’s fragmented ecosystem here.