coverstory_cover story 21/05/2015 18:35 Page 5
or 30 second pre-roll advert means I’ll
almost certainly give up on watching the
content altogether,” he admits.
KEY. Trudelle
suggests that the key
issue to address for
advertising to be
successful in an ondemand world
remains the relevance
and quality of ads, and
how these ads are
integrated into the
viewing experience. “Some content providers
like Disney in the US market have realised
that OTT services can support advertising as
long as smart dynamic ad insertion is done,
providing a broadcast-grade experience to
consumers. We definitely expect an increase
over the coming quarters in the number of
advanced multiscreen TV advertising
solutions deployed as both service and
content providers try to improve
monetisation.”
Stehmier says that as the direct to
consumer content market is rapidly
changing, so too will be the way content is
supplied and financed. “This is where we as
distributors have to make a fundamental
change in the services that we offer. Adsupported content – be it through pre-roll or
actual advertiser funded programmes, will
still be a vital part of being able to build a full
non-linear bouquet of consumer access
points and this is something that we are
already looking into at Off the Fence.”
Walters says there is a clear trend of
customers willing to pay for quality – a trend
which is helping a lot of subscription
businesses grow. “However, this doesn’t
mean that free services that are ad-supported
are on the way out – witness YouTube.
However, what will become more and more
difficult is to be in the middle: charging
people AND advertising to them at the same
time. Conventional pay TV broadcasters are
going to have to
make their choice and soon. Advertisers
will have to start
moving in a different
direction as they
think about
integrating their
products into content
viewers want to
watch, over what
they’re forced to
watch in ad ‘breaks’”
SCALE. Weaver
disagrees this is the
case. “Quality is at
“There are still
broadcasters that
have not cleared
content for VoD.”
Dan Finch,
Simplestream
AD-SUPPORTED. Does increased
subscriber expectation of quality do away
with the need for ad-supported content?
Lattie says that in terms of subscription
VoD and free VoD, content owners are
already taking advantage of the opportunity
to cross-promote their own content. “For
example, HBO has begun doing more prerolls on subscription VoD viewing to drive up
brand equity. In the case of transactional
VoD, we don’t expect ad-supported content,
but we do think that we’ll see more of this
cross-promotion of assets, much in the way
content is promoted prior to a movie on DVD
or Blu-ray. At this point, the lower-thirds
and snipes familiar from linear TV are not as
easy to integrate into VoD assets.
Nevertheless, if people are going to watch
and if there is a way to sell and insert ads,
then content providers will take advantage of
that opportunity.”
For Gidley, there is no inherent link
between the quality of content and the
business model. “Ad-supported content is
often just as well-funded, well-produced and
high-quality, the distribution is simply based
on a different business model. The free-to-air
television industry produces some of the best
quality content out there but each market
has its own specifications that operators
need to understand – free-to-air content in
one country can be paid content in another. I
expect to see a range of approaches, but the
key will be the ability to match the right
business model with the right content in
each market.”
Guthrie suggests there is no doubt that
adverts are widely seen as detracting to the
viewer experience, so in a highly competitive
world subscribers who are paying a
subscription for premium content are
unlikely to put up with adverts. “However,
not everything we choose to watch is
necessarily premium content, so there is
definitely room for ad-supported content
provided it is itself quality, is of limited
duration and carefully placed. For me, a 20
20 EUROMEDIA
one end of the scale and price sits at the
other. That’s why new technologies take a
while to become adopted - the jump in
quality from, say, CRT to HD, or HD to UHD
is amazing from a quality perspective, but is
prohibitively expensive. Similarly, while
subscribers expect a high level of quality,
they are willing to balance that out with the
need for an affordable service. Thus, if
content is free, they are willing to live with
ads. That’s the accepted trade-off. In a time
when we have a generally flat economy and
a squeezed middle and struggling poor,
luxuries like £7.99 (€11) a month for Netflix
can get dumped by the wayside when an ad
support solution like All4 or ITV Player is
available for free. The AVoD model isn’t
going anywhere,” he asserts.
Dawes takes a similar view, although he
accepts there is clearly a difference between
the ad-supported content on social media
sites and ad-supported long form content.
“Subscription services such as Netflix are
commissioning their own content, very
successfully it seems. However there will
always be a place for content that is funded
and paid for using some of the more
traditional businesses that have been
established in the television industry,
whether through the traditional commercial
channels taking the advertising model over
to their VoD services or through more use of
newer models such as product placement.
Many subscribers will continue to want to
access ‘free’ content that is of high quality
and the ad-supported model is a familiar
and relatively simple way for them to do
this.”
Nochimowski feels that this is not
necessarily the case. “Netflix has set the
standard, at least for young audiences, with
an affordable, all-you-can-eat, on-demand
offering and no advertising. Thus, it’s
difficult to justify an ad-funded model.
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