The rapidly growing virtual MVPD market has been derided by some analysts as a low-margin, zero-impact business that is only cannibalizing linear pay TV services. But operators are bullish on their abilities to monetize the IP-based services with advanced advertising.
Startup vMVPD fuboTV is the latest example. The company announced a deal with programmatic ad serving platform SpotX.
According to fuboTV, Denver-based SpotX has been providing “programmatic monetization” for the virtual service’s live over-the-top content.
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FuboTV, which launched its ad sales business over the summer, said that more than 150 national brands purchased its ad inventory during the fourth quarter, double its third-quarter production. Fifty of the top 100 biggest U.S. advertisers now run campaigns on the vMVPD using the SpotX platform, fuboTV added.
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“In today’s fully automated advertising ecosystem, it’s increasingly important for us to find the right technology partner that can streamline the programmatic monetization process,” said Andy Hammond, VP of sales at fuboTV, in a statement. “We continue to be extremely impressed by SpotX’s robust monetization capabilities, massive scale and deep agency relationships, and look forward to working more closely together throughout 2018.”
The divestiture by fuboTV into a new revenue stream is vital to the company’s business model, which had previously relied only on subscription money. Touting around 100,000 customers as of October, fuboTV is selling its service for $39.99 a month, which arguably covers the costs of licensing its content.
However, the margin picture for fuboTV—and vMVPDs in general—might soon be more attractive if these services are able to use their IP capabilities to generate meaningful revenue from advanced advertising. Dish Network, for example, recently announced that it was rolling in advanced advertising impressions via its sizable Sling TV audience into its broader satellite TV-generated addressable ad sales via new cross-platform measurement tools provided by comScore.
FuboTV said SpotX will also enable it to dynamically target audiences by a variety of different data segments including live vs. VOD, DMA, device and language. FuboTV is also leveraging SpotX’s demand facilitation services to connect premium brands with the service’s niche inventory. FuboTV said private marketplace deals have increases an average of 55% monthly via SpotX.