Google is expanding its tool for publishers to combat ad blocking.
"Funding Choices comes at a cost; publishers have to meet the Coalition for Better Ads’ Better Ads standards, which Google’s Chrome ad filter enforces and which some consider another way Google is dictating the rules of the web. Publishers also have to share the revenue with Google if they get readers to pay. Finally, few publishers are able to get people to pay for online access in the first place."
It should be noted that Google has (at least previously) paid two of the most popular ad blockers to have Google's ads whitelisted; effectively Google's revenue helps fund the development of ad blockers. Google then develops a tool for publishers to deal with adblocking...taking 10% (of monetised viewing) to do so.
While Google may be virtue signalling an intent to solve the ad blocking issue, it fully intends on capitalising on the revenue opportunity it represents.
This move (combined with their News Initiative to monetise new subs and GDPR requests to be 'controller') is aimed at making Google the gatekeeper to the content consumption experience for a large portion of the population.
Any other takes/perspectives?
The internet is predicated on the notion of it being free. But what if this predilection was found to be the root cause of most of our media and societal ails; filter bubbles, 'fake news', misinformation and the spread of conspiracy theories, privacy breaches et al.
Our technological and in some ways societal future depends on what happens next.
Jaron Lanier, a scientist, musician and writer is known for his work in virtual reality and his advocacy of humanism and sustainable economics in a digital context, and contends that when free digital systems and great tech entrepreneurs exploded there was a 'globally tragic, astoundingly ridiculous mistake, rather than a wave of evil where behaviour modification empires (we know them as social networks) sprouted and effectively 'broke' the internet'. He believes 'we simply just need to remake the decision'.
Lanier suggests, that born of this period (in the late 1990s) was a 'mythical power which produced two different passions; for making everything free and for the almost supernatural power of the tech entrepreneur. (But) How do you celebrate entrepreneurship when everything's free?' These two things are at odds with each other and this decision for predominantly 'free' has resulted in systems which modifies users' behaviour in the process of allowing them to seek information and communicate with others via the internet.
The only solution back then was the advertising model and just like users, the likes of Google and Facebook are hooked; unable to diversify from the proposition of cost centres to profit centres.
His most notable thought; "I don't think our species can survive unless we fix this. We cannot have a society in which if two people wish to communicate the only way that can happen is if it’s financed by a third person who wishes to manipulate them.”
Would/will users ever be able to be weaned from the 'free' model. Would we make a different decision if we knew back then? Would we being willing to remake the decision now?
A comprehensive and contextualised account can be read via New York Mag
Worth watching the TEDTalk in full.
Seven West Media will be the next FTA broadcaster for cricket ending Nine Entertainment Co. four-decade stranglehold on the sport. News Corp-controlled Foxtel will pay for the majority of the rights in a $1 billion deal which could see a large number of matches held back for pay-TV, including some Twenty-20.
Big Bash League’s media equity and brand accessibility is arguably only what it is thanks to Network Ten so a hard act for Seven to follow and a risk with many games exclusive to PayTV.
The numbers are right now for Cricket Australia but the impact will be in 3-5 years. A definite change in the landscape and an all-in on sport for Murdoch.
The Australia reports the deal as is understood to include Seven committing to estimated annual payments of $75 million or $450m over 6 years, with Foxtel stumping up $105m a season or $630m.
Read more detail here:
The Australian - Seven Network seizes cricket media rights from Nine, Ten in a partnership with Foxtel
SMH - Seven and Foxtel nab cricket broadcasting rights in $1 billion deal
There’s only one broadcaster winning the (long term) strategic game here.
For Nine this now isn’t a ‘must have’. Even the revised Nine Entertainment Co. & Network Ten offer $900m ($150m pa over 6 years) to keep cricket on FTA, would see Ten retain the Big Bash League while Nine would keep the Test matches...but importantly international Twenty20 & 50 over matches would switch from Nine to Ten.
Nine has already won the Australian Open Tennis Tournament & entering the Cricket negotiations with Ten means it shifts a significant portion of its cost base, freeing it up for more diversification & greater margins & still receive summer sport revenue.
Foxtel's aggressive bid estimated between $160 to $170 million per year for every game (or $800-850 million) may be viewed by Cricket Australia as a financial lifeline as SMH points out, but unless Foxtel & Seven West Media can deliver something (questionable & arguably detrimental to CA brand) like a knock out news lock out (Comm Games style), I’d question the long term strategy. Even if the bid wins, they ‘win’ the rights but inherit the largest cost base for a summer sport with no additional benefit for users and no significant audience gains for Cricket Australia. Right now, CA need an outcome which delivers improvement/stability for the brand. Taking cricket from FTA is a risk.
As News Corp play hard ball, Nine’s patience, holistic view of rights & willingness to collaborate should pay off here.
Blockchain will affect the practice of marketing and the media industry in ways not yet entirely obvious but is it over-hyped?
No. It will be both inevitable and transformative.
Blockchain has been made possible with the convergence of scaled audiences, connectivity and computation power and provides a new data structure enabling what is known as crypto economic protocols. Blockchain is technology which decentralises the way we do business. Blockchain can create new network designs and supply chains and reduce the friction from many processes.
What this means for media and marketing is the way in which content is distributed and indeed the ownership, management and use of personal information and therefore the ability for marketers to reach consumers as they have done previously will be up-ended. Existing distribution models for both editorial and advertising content will be impacted by disintermediation and many AdTech and MarTech businesses will be under threat.
Plain and simple; if you're a media middle-man and you've read anything about Blockchain, you're likely to be a little nervous or amidst a period of heavy innovation.
We have reached a time right now where we're questioning how the tech giants ended up with too much power. Blockchain will be their likely usurper and from this, peer-to-peer for everything will become (the most likely) reality. How we never thought of this rather than allowing the rise of large networked empires will amuse future generations.
Blockchain is less about how the technology works itself and more about how it will be utilised and what the implications or impacts are.
As Jeremy Epstein from Never Stop Marketing discusses on the EchoJunction* podcast, with Blockchain we 'now have technology which allows for the transfer of items of value as opposed to simply information (like the internet delivered) without the need for third party intermediaries which add time and risk'. That is, we are seeing the distinction between the internet of 'Information' and the Internet of 'Value'.
Most significantly, it allows consensus about the state and ownership of assets at particular times and has strong security guarantees to ensure that 'history' cannot be altered by bad actors. This means this innovation enables or liberates all types of value (including content) as the owners and recipients are protected through verification.
According to Singtel's APAC Associate Director for Financial Services Industry Innovation, Cindy Nicholson, 2018 will be the breakthrough year for Blockchain and the technology will mature by 2025^.
This is what we will start to see:
The most significant change will be in the space where consumers themselves make money from their own data...but more on that later.
Waiting to see how it plays out is likely to see players 'left out' or 'left behind'. Education, preparedness and early experimentation (or partnerships) is key.
Update (April 10, 2018): Found this explainer on Blockchain which might be useful - A Beginner's Guide to Blockchain - Steve Sammartino
* The EchoJunction Podcast with Adam Fraser; Jeremy Epstein talks Blockchain
^ AdNews; In Depth - Can blockchain revolutionise how media is traded? and Blockchain Summit 2017
At the same time we are being overwhelmed with the avalanche of streaming offerings, little is being said of the ability of Australia's internet to cope with the amount of data required for all the predicted streaming.
Akamai's State of the Internet Report is not comfortable reading. So why is Australia is becoming a digital backwater? With internet speeds ranked 44th in the world, studies cite the direction of the nbn as part of the problem (as reported by the ABC).
Reading Australia doesn't even have connection speeds above the average 10 Mbps 'high broadband' threshold is depressing, but to learn we are ranked behind New Zealand should surely spark the competitive nature in us to at least try and challenge our cross-Tasman rivals.
It would be an understatement to suggest 2015 will be the year for streaming.
Late 2014 saw a flurry of partnerships and launch announcements (Seven and Foxtel to join forces in a 50:50 JV to deliver Presto and Nine confirmed Fairfax as partner for 'Stan') and just this week Netflix (after announcing it's AU plans late last year) has commenced it's 2015 assault on the market with trials to block some Australian VPN users.
Prepare yourselves for the onslaught of content deal announcements in the first quarter: The first of many this week - "Stan signs Amazon Prime shows, announces pricing and kicks off pre-launch campaign".
One thing is for sure - there will be more choice and more freedom to choose (as very well articulated by Chris Stephenson). The growth in SVOD will spur the delivery of more diversified content and ensure it is more evenly distributed than ever before with consumers at the helm of choice (and device). Streaming is undoubtedly the future of how Australians will consume content.
Streaming is the future of content - internet TV will replace linear TV. CEO of Netflix, Reed Hastings predicts the demise of broadcast TV by 2030. Undoubtedly, TV audiences are ageing and 16 years will see us move through another generation of viewers. There may potentially still be those in older segments clinging to traditional viewing but largely, the market will have transitioned away from traditional TV.
I don't see the future of TV devoid of advertising. Early proclamations of ad-free options are a lure to gain adequate audience numbers early.
With the advent of greater consumer choice comes greater media fragmentation making media buying even more challenging. Streaming does however, present the opportunity for advertisers to achieve placement in content rich and contextually relevant environments. More importantly, operating as a subscription service, the data enables greater personalisation, validation and retargeting opportunities. The pressure and ability to resist the opportunity might prove too great and ads within SVOD (or tiered subscriptions with lower tiers delivering ads) are an inevitable outcome.
Netflix while currently ad-free is said to have signed 'commitments' to Google Partner Select (a programmatic video ad marketplace) and while Stan (currently) promotes its platform as 'ad-free'. As consumers, let's rejoice and take advantage of the short-term ad-free commitments while they last but as advertisers and planners, rally the (strategy) troops for when the flood gates open.
Of the potential of streaming in the market, there has clearly been consideration in numerous boardrooms for the size of the prize. Whilst there are already seeing large consumer segments shifting significant portions of their viewing to SVOD and many players scrambling to get a slice of the action investing huge swathes to stake their claim there are not many public proclamations of market potent. Early estimates from Nine assume that 40% of Australians will be streaming within 4 years. That would be approximately 10.2 million Australians based on population growth estimates or 4.031 million households (at current estimates of 2.53 people per household and assuming they mean all people).
It's important to note that 83% of Americans claim to be currently streaming movie and TV content at home, Netflix enjoys reach to almost 12% of total Americans and significantly 2 in 3 prefer to stream with commercials than pay a monthly subscription to stream without commercials.
Nine/Fairfax, Seven/Foxtel, Netflix and Quickflix have all been vocal in their offerings and each will come out aggressively. We've yet to see the full extent of Telstra's plans, and we've not yet heard from Apple and Google (or Android TV - fully launched this week) or even contemplated the possibilities from Amazon or tie ups with TV manufacturers. (Check out some of the players here).
But buying content is not a cheap business. Nine and Fairfax announced a JV backed by a $100 million investment, Foxtel and Seven have combined their pennies and most notably Netflix recently paid $90 million for the first season or 10 episodes of the original Marco Polo. Netflix clearly benefits from global rights deals and currently pays less than local players so the current lower cost of content and the production of epic originals can be shared across multiple geographic markets. Local players will have domestic volume advantages when negotiating rights, but I'm not sure any party can accurately put a figure on or a fully prepared for the looming increases in the cost of content rights.
For mine, the AU market is too busy and it's unlikely all players will be able to sustain the high cost of content over the long haul. There will be success stories, there will be losers and for some, there may be small wins but without the breadth and depth/quality and the quantity of content required to draw significant enough numbers to put a double digit dent in market share. Profitability from subscriptions alone then comes into question and therefore the proposition of ad-supporting becomes more attractive.
Here are my (brave and potentially embarrassing if wrong) predictions of what I think will play out:
1. Quickflix and EasyFlix are acquisition targets. If they can't hang on for the near there years it will take for them to benefit from streaming becoming mainstream they will need to succumb, focus on niche content to keep content costs low or incorporate another revenue (advertising) stream. Their catalogue offerings will not draw adequate audiences needed to fund the bigger content plays in the short to mid-term.
2. There will be a direct impact on the traditional TV market. As Google and Apple become more active they won't play to the same conventions as local operators will aim to dictate. TV will be online - we're not talking catch-up but new, original content which shakes-up traditional program schedules (what consumers want, when they want it). Just this week at CES, US satellite operator, Dish announced Sling - its online television service. It almost certainly will be a very delicate dance for FTA and Pay TV owners to ensure they maintain the traditional TV fortress for long enough to transition adequate audiences to SVOD without impacting current TV revenue. Once the numbers arrive at SVOD offerings and presumably some are lost to FTA and Pay TV where does the (traditional) TV ad revenue go? It's not a hard sell to suggest a product which is a blend of traditional TV and catch up shouldn't have ads - viewers are already well acquainted with ads in both TV and catch-up environments. Ads here are a given and so is the power of dynamic ad insertion and programmatic.
3. The last bastion for streaming to conquer will be live sports. A mass exodus from live TV for viewing of live sports is unlikely and not imminent in Australia. Networks control TV production; an expensive investment and TV viewing of sport is currently the preferred method of consumption Clearly though there are portions who are transitioning to other devices (think Cricket Australia Live and NRL Digital Pass). Control by the rights holders (like Cricket Australia and NRL Digital Pass) will see the networks relinquished to content distributors of sport only. I'm not convinced that's the preferred option (for networks) if we see a future where all content is streamed. If live sport is integrated into the streaming offerings of networks, ads are inevitable, just like on traditional TV.
Sponsors won't want to relinquish their presence in these sports especially if the streaming platform draws adequate numbers, so at the very least native advertising will be an easy obvious solution. But imagine the advances in on-screen interactive ads, augmented reality and click-to-buy in real-time within the next 1-2 years. Might they be too tempting? A three-way play from Telstra, Foxtel and Seven offering TV coverage/production, streaming platform and data access bundles could be formidable.
4. Accurate (and independent) measurement and validation of audience numbers across platforms (including mobile!) will be mandated as advertising becomes incorporated. This requires a step-change in current solutions and thinking - solutions which compliment and add to current measurement. It most definitely is not a digital replica of TV measurement and nor is it a panel only solution. The gate is wide open for some very creative solutions and partnerships.
Hang on to your hats - we're in for one hell of a ride.
More launch activity with the announcement of Presto Entertainment - the joint venture between Foxtel and Seven West.
Is $1.5-2 billion too high for AFL rights come 2017 or do we assume the sport will continue to grow, the potential exists for more cost effective and creative methods of delivery to mature and produce greater returns and there is more scope foe creativity in the structure of rights' deals?
If we assume Gyngell is genuine on the call to arms for regional streaming - "In five years time we will just go around regional television and stream content into those markets - if you can watch it from America…you can watch it from Wagga", this creates greater monetisation opportunities also, no?
This is potentially naive thinking, but the inability to future project opportunities for sports viewing either by new means and the current magnitude of the I assume the current profit margin networks are rewarded with is limiting the thinking on the possibilities and investment into better offerings for consumers will always lag behind.
PS. Wagga goes nuts for AFL!
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