Fragmentation is here for TV – but it can’t be invited to stay
TV as we know it is changing rapidly, with growing competition from streaming giants and audiences – and the way they are measured – continue to fragment. Andrew Gilbert, director of platforms, Yahoo AUSEA, argues local networks need to unify approaches to realise their potential.
The word that sums up 2023 for our local commercial TV networks is fragmentation.
We’ve seen audience fragmentation come to the fore as linear audiences decline and more people consume via digital channels, which has also led to a revenue fragmentation which has not favoured local businesses in the same way, as global players enter the ad-funded streaming market.
Then there’s the continued fragmentation of measurement, which has seen a lacklustre response from the market to the much-delayed launch of streaming measurement platform VOZ and subsequent spawning of several competitive services. It remains to be seen how the market will react to the news OzTam is changing to a new twice-daily reporting system and the impact later daily ratings will have on TV’s ability to drive media press headlines each day.
And of course there’s a fragmentation in the way TV is being bought, with different broadcasters and platforms opening up for different standards.
It’s all quite full-on for even the casual observer.
But it’s not all bad news, and my sense is that this in some ways has been the year of pain that had to happen as broadcasters ready themselves for the brave new world. But if it’s going to happen, there needs to be a rejection of too much fragmentation across all these areas.
A winter of good content
People are watching more video content than ever before, it’s just that the means of consumption is changing. This is good news for premium content providers.
A good example this year is when 7.32 million viewers tuned in to watch Seven’s coverage of the Matildas semi-final against England in the FIFA Women’s World Cup, the highest linear TV audience in two decades and re-writing the BVOD audience record books.
The reality is that strong local TV content will deliver large audiences, but a growing proportion are accessing it through on demand platforms, such as 7Plus, as more people cut the cord from the aerial and go digital-only on their TVs.
Sticky content is imperative – as Seven and their rivals acknowledged during this year’s upfront events – but increasingly we’re conditioned to be able to get access to it all at once and satisfy our craving in one big hit.
In a siloed world of digital apps and endless content creating true appointment to view TV is harder than ever and we’re seeing broadcasters move away from live formats in some of their big reality shows to make things more bingeable and allow people to discover them on their own terms.
In this context sports are going to remain important for linear and recent moves around protecting the anti-siphoning register will have an impact on protecting linear TV for a while longer. However, the recent announcement that Amazon Prime has secured a host of premium cricket rights is a shot across the bows that these same regulations are unlikely to survive beyond the next decade at most as transmitters are turned off and access to digital services becomes more open.
Measurement arms race
The three largest commercial TV networks – Nine, Seven and Paramount – have all committed to the imminent arrival of VOZ Streaming (albeit somewhat quietly), which will provide advertisers and their media agency partners a single dataset and buying opportunity across their BVODs (9Now, 7Plus and 10Play).
Although such unity between these networks is long overdue (about a decade since they launched BVODs), SBS and Foxtel’s Binge and Kayo are not yet in the VOZ Streaming tent, not to mention other global players such as YouTube, Netflix, Disney+ and so on.
While OzTAM has said it would welcome Foxtel and SBS to the Streaming VOZ camp the other digital platforms don’t appear to be able to get access.
There’s a bigger question here about what TV actually is. I asked this to a panel of media buyers earlier this year and the simple answer was premium content that I consume on the big screen. If that’s the criteria which consumers are looking through the lens of, then the absence of these other large ad-funded platforms causes a credibility gap for VOZ.
Perhaps the most eye-catching announcement from the recent Upfronts was that Foxtel appears intent on developing its own TV and video measurement solution. In Australia, this would mean that in a year or so there will be four TV and video audience measurement systems of note: OZTam/VOZ Streaming, Adgile Media (used by marketers); Samba (which Yahoo partners with for our Advanced TV measurement) and Foxtel’s future solution in partnership with VideoAmp.
This would align Australia with developments in the US. For years, Nielsen was the TV audience standard-bearer, but after falling foul of the Media Rating Council and losing accreditation for a year, other alternative audience measurement players flourished, including VideoAmp, iSpot and Samba.
This will inevitably lead to a number of TV and video currencies that the market uses to transact; a point media buyers are resigned to and that has been noted by Foxtel Media CEO Mark Frain.
But does it have to be that way? After all, advertisers (whether brand or media agency side) want to be able to compare apples with apples and have streamlined consistency in their approach to media.
In the UK there is a different approach; industry measurement standard-bearer Barb (Broadcasters’ Audience Research Board) recently rebranded to Barb Audiences – a reflection that it now measures “fit for TV” content outside of its major broadcasters (BBC, ITV, Channel 4, Channel 5 and Sky), including Netflix and Disney+.
So, while the UK has a strategy to welcome outsiders into the tent, Australia appears to be heading towards a multiple measurement and currency environment.
See not, want not
Discoverability is another issue TV networks have to grapple with as viewers increasingly use the AI tech of connected TV operating systems and aggregators to discover content on demand.
An Ofcom white paper by Mediatique, Connected Gateways, noted the growing importance of negotiations at global level between content producers like Netflix and CTV manufacturers such as Sony, that direct viewers to programs and apps.
While this hasn’t been a material concern for networks previously, the move by subscription services to include ad-funded tiers means this preferencing would have an impact on advertiser-supported eyeballs. The war for preferencing in TV operating systems is running hot, with the government set to hand down legislation to force pride of place for free-to-air TV networks over their subscription colleagues.
Citing the UK market as an example, it found that domestic TV broadcasters with strong local content BVODs, such as BBC’s iPlayer, could compete but global streaming giants often trumped “domestic bargains” – when Disney+ emerged, it relegated Channel 5’s BVOD to the second page on many devices.
The white paper noted that over time the control of manufacturer operating systems in terms of first party data, advertising and potentially billing will generate significant revenue opportunities, but conversely it can also pose a threat if TV networks get it wrong.
A new aggregator to the Australian market is Foxtel Hubbl and Hubbl Glass – a similar play to Sky Glass in the UK – which shows that local TV companies view controlling a user’s content interface as increasingly important.
Breaking down silos
While attracting audiences in a more competitive and aggregated world is vital, it will all mean nothing if the networks can’t monetise those eyeballs. Right now, it’s increasingly complex to buy TV and that is what needs to change.
There have been intriguing moves to make transacting easier within network inventory siloes to attract more advertising dollars.
Nine’s self serve Ad Manager allows advertisers to run spots on 9Now for as little as $500, targeting a slice of the circa $1.5bn SMB video market that usually advertise on YouTube and Meta. Seven’s Phoenix aims to provide a single Total TV trading system across its linear and BVOD inventory, promising to guarantee TV audience outcomes and kick ‘make goods’ into touch.
In isolation, these separate initiatives sound positive, but what advertisers and media buyers really want is a single window to buy video inventory across the entire ecosystem, whether it’s linear TV, BVOD, AVOD or SVOD. A protectionist approach might allow broadcasters to prevent some of the rot from the circa $4.2bn TV advertising market in the short-term, but raises questions about its longer-term sustainability.
As more and more inventory is traded digitally it will be important for networks to lean into trusted DSPs and ‘header bidding’, which enables programmatic and more traditional direct TV deals to compete on the level playing field. Right now there seems to be some resistance.
Seven West Media’s programmatic sales and audiences lead Luke Smith has previously acknowledged at an IAB Australia Ad Ops event, the importance of header bidding in driving up revenue during Seven’s Olympics coverage and that it represents the future of TV trading versus buying inventory direct.
For this to succeed, the TV industry needs to make access for DSPs easier, opening up the tent, so to speak, rather than forcing DSPs to rebuild their own infrastructure to accommodate inventory silos.
The local TV networks that thrive will be the ones that focus on producing outstanding content consumers want, ensuring their content is discoverable, and opening up the way that advertisers and agency partners can access inventory and trade.
In other words, breaking down silos rather than building more of them.
Fragmentation and complexity is inevitable in the near-term, but success will come when we move towards single-solutions that allow ease of access for audiences and buyers alike. It’ll mean a total mindset shift and real collaboration across the industry.
Let’s hope that can be achieved.
Andrew Gilbert is director of platforms, Yahoo AUSEA
