Well-known industry analyst Alan Wolk is publishing his popular Week In Review columns first on FierceVideo every Friday. This means that FierceVideo readers are the first to get all Wolk's insights as they navigate the fast-moving television business.
1. Roku Buys Nielsen’s Linear Addressable Unit
Networks were never able to directly sell linear addressable advertising because it would have meant collaborating with the MVPDs and well, cats and dogs.
Development of technology that allowed for ad overlays on smart TVs solved that problem (no MVPD necessary) and this week Roku reached a deal with Nielsen to buy their version of the solution, as well as the team that was working on it.
Why It Matters
Roku’s ambitions extend far beyond being just a streaming stick and this allows them to extend their advertising reach to linear, which, despite the widely held misperception that there’s been a “massive wave of cord cutting,” is where the vast majority of Americans still watch TV and where the vast majority of ad dollars are spent.
Roku’s prescient 2019 purchase of Dataxu gives them the tech stack to use their streaming data to target viewers on linear.
The deal actually highlights two very important trends happening right now in the TV industry.
The first is the rapid growth of addressable advertising, while the second, is the ascendancy of the smart TV ecosystem, which stands in contrast to the content-based ecosystem.
While Roku does indeed make sticks, they are also the operating system for around a third of all smart TVs sold in the US today, making them a major player.
This was a smart move on their part, because as the smart TV OEMs realized that their operating systems mattered and that ceding that space to Roku and Amazon was a big mistake, we’re going to see a lot more people ditching their dongles and relying on their smart TV’s native operating system instead.
That’s why Amazon is getting into the TV OS business, Google is looking to integrate New Chromecast into Android TVs and Comcast is trying to get Walmart to make Xfinity TVs. (Apple, OTOH....)
The Roku-Nielsen deal means that the four major OEMs, Samsung, VIZIO, LG and Roku, now all have their own FASTs, their own ACR-based data sources and their own ad businesses.
Owning all of that allows them to solve for things like frequency capping (showing the same ad to the same person too many times) because they can see all the ads that run on that particular device, regardless of the source. Because while people may switch from app to app, streaming to linear, live to VOD over the course of an evening, chances are they’re not switching TVs.
The growth of this new smart TV ecosystem is also the impetus behind LG’s recently Alphonso acquisition (now renamed LG Ads) and a big reason why VIZIO announced it’s going to be launching an IPO.
What You Need To Do About It
If you’re one of the smart TV OEMs, this is your moment. Keep evolving your interfaces and remember that most people just want to be able to quickly find the apps they watch most, which is the genius of Roku’s simple iPhone-like layout.
If you’re an advertiser, the frequency capping capabilities (among other benefits) of smart TV OEMs is a true blessing both to you and to the poor consumers who can recite your ads by heart. (And not in a good way.)
If you’re an industry professional, keep a look out for TV[R]EV’s upcoming series on the white-hot smart TV ecosystem--reports, videos and events. Stay tuned for details.
2. Paramount+ Launches
Paramount+, the last of the major Flixes, launched this week, bringing the grand total to nine. Learning from the mistakes of their predecessors, the app actually walked new users through what was available upon initial login and asked for some quick help refining recommendations.
The only #fail was that neither Roku nor Amazon updated CBS All Access to Paramount+ in their search menus, so anyone trying to find Paramount+ came up short. Fortunately, anyone trying to install an app in the first few hours it’s available is likely enough of a fan to figure out how and where to find it, or they quickly turned to their smart TV’s homescreen, where the app was readily available.
Why It Matters
The most interesting thing about Paramount+ is that there’s a live video feed from your local station (at least on the ad-free version) as well as from CBSN, the network’s 24-hour news service.
This is basically an admission that the driving idea behind the app is “Welcome Cordcutters!” and that they expect to port all their programming to Paramount+ sooner than later.
It’s a feeling that’s reinforced by the layout of the app, which seems to mostly be a library/VOD repository for all their various and sundry networks (CBS, MTV, Nickelodeon, BET et al) with a couple of mostly forgettable originals from CBS All Access thrown in.
The original content they’ve announced thus far seems heavy on reboots of popular Viacom and CBS series, which is the sort of content that is going to appeal to audiences who were perfectly content with what’s on linear TV.
This stands in marked contrast to other services whose content seems mostly geared to people who were not very happy with network prime time fare and were looking for something a bit more sophisticated. (More on that in a minute.)
Sports is also a big focus of Paramount+, with March Madness almost upon us and lots of NFL games in the fall.
Since it’s not clear that Paramount+ sports fans will get anything over and above what they’d get from linear CBS, this also seems aimed at the type of viewer who was mostly happy with what’s on traditional broadcast TV, save the price tag.
Which brings up the question as to whether VCBS and other broadcasters are banking on the eventual demise of the traditional pay TV ecosystem and just what does that mean and how soon do they expect that to happen. (You can find some deeper thoughts on that here.)
What You Need To Do About It
If you’re VCBS, you need to settle on a consistent content strategy and stick with it so that viewers can tell you apart from the other Flixes. It looks like you’re already doing this, but you may want to be even more explicit about it.
Similarly, you should rely more on Pluto to push subscribers to Paramount+, maybe give them the first three episodes of the "iCarly" and "Frasier" reboots to get people hooked enough to sign up.
If you’re a fan of all of VCBS’s content, be it Nick sitcoms from your childhood, MTV series from your teen years, or CBS procedurals from your adult years, Paramount+ is worth checking out, especially given that it’s free for the first month, which is plenty of time for you to decide whether it’s worth keeping.