For consumers, the world of over-the-top video is flush with opportunity: the chance to cut the cord and save a little money, a video experience with an intuitive and simple user interface, and all the content one could want, on-demand and at your fingertips. But the OTT landscape is also incredibly confusing, with a dozen "skinny bundles" like Philo and FuboTV offering pay-TV-like services, and even more services offering single channels, like HBO Now and CBS All Access.
If there was one theme that would sum up the quarterly financial earnings calls of the big television companies this past quarter, it would be "over-the-top is coming, and we are ready for it." Whether these companies really are ready will be up to consumers to decide, but there is no question that just about every traditional media company is now betting big on OTT.
While many large streaming services try to be everything to everyone by having enormous libraries of content, we are now seeing a new wave of OTT startups targeting more niche audiences. Karma, an over-the-top streaming service that founder Karam Hinduja describes as "The Economist for the next generation, on video," officially launches today.
2018 is shaping up to be a pivotal year for over-the-top video. Amazon and Netflix are ramping up their spending on original content, while OTT bundles from YouTube and Hulu are expected to make a big consumer push. Traditional television companies, meanwhile, are building out streaming services of their own.
Live sports, long the linchpin for the traditional television bundle, appear to be finally finding significant viewership online, if early data from this year's Major League Baseball playoffs and Amazon's "Thursday Night Football" simulcasts are any indication.
The video landscape is undergoing sea changes, and a lot of major players with deep pockets are trying to figure out how to compete. It's easy for us media industry folk to lose sight of the fact that roughly half of all TV households across the country have no DVR and half have no streaming services. And the number who have top-tier cable packages is declining. CBS All Access, Disney/ABC, and others are putting down markers, trying to gain a foothold into this new media world. There's more room for them to thrive than many seem to think.
My wife found it infuriating that CBS' new "Star Trek: Discovery" is so good. Having recently seen the series premiere on CBS, we can't watch subsequent episodes unless we subscribe to the CBS All Access streaming service.
On the cusp of the 2017-18 television season, Nielsen released an analysis indicating most of the video ad marketplace growth is coming not from linear TV, but from digital video ad spending. There's a 3.6% increase from the $59.0 billion advertisers spent on TV during the 2015-16 season, while digital video ad spending, by contrast, has expanded 26%, to $9.3 billion during the first half of 2017.
One reason Netflix continues to grow and thrive, aside from spending a significant amount on programming, is that it does not have the same constraints as ad-supported networks. It does not need to worry about average minute ratings, audience flow or demographics.
The media-buying industry has historically been described as one that "buys time and space." Ironically, neither is the norm. And that's not likely to change any time soon, if your believe what readers like you tell us about the future of audience metrics. Take a moment and dwell on that.