Amazon’s Prime Video Channels Biz to Generate $1.7 Billion in 2018

Amazon doesn’t offer a “skinny bundle” of streaming TV channels — but its a la carte Prime Video Channels service is having a huge economic impact on the pay-TV business.

According to new estimates from BMO Capital Markets, Amazon’s Prime Video Channels will pull in $1.7 billion of revenue this year, more than double from last year’s $700 million. That’s poised to grow to $3.6 billion in 2020 worldwide.

Assuming the ecommerce giant shares on average 70% of the subscription fees, Amazon will pay out $1.2 billion in 2018 to Prime Video Channels partners — ballooning to $2.5 billion in 2020, the firm’s analyst predicted.

“We believe [Prime Video Channels] is a material driver of standalone [ subscribers for many entertainment companies,” representing anywhere from 25%-45% of total OTT users depending on the channel, BMO analysts Daniel Salmon and William Lowden wrote in the report.

In the U.S., Amazon’s Prime Video Channels currently provides a selection of 156 channels. Those include CBS All Access, WarnerMedia’s HBO, Cinemax, and Boomerang; Lionsgate’s Starz; PBS Kids and Masterpiece; Viacom’s Noggin and Comedy Central Now; Hallmark Movies Now; Lifetime Movie Club; Tribeca Shortlist; BBC/ITV’s Britbox; CuriosityStream; Cheddar; and AMC Networks’ Urban Movie Channel, Acorn TV, Sundance Now and Shudder. All movies and TV shows included with the subscriptions are available to watch on-demand, and many channels also provide live-streaming feeds.

A huge advantage Amazon offers partners is massive scale: It currently has about 75 million Prime Video worldwide (including about 40 million in the U.S.) and is on pace to top 100 million by 2020, BMO’s analysts estimated. Amazon earlier this year announced that it had surpassed 100 million Prime members globally but hasn’t broken out numbers beyond that.

In addition, Amazon removes friction from the OTT-subscription process, letting customers purchase access to a channel with a few clicks and by integrating the video services into a unified service available across several hundred devices.

But there’s a tradeoff: Amazon takes anywhere from 15%-50% of the channel subscription fees (estimated to be 30% on average), with bigger players like HBO and Showtime gaining more favorable splits. That’s compared with those media companies keeping 100% for subs through their own, direct-to-consumer services. Plus, Prime Video Channels removes media companies’ direct customer relationship (and limits the data they are able to collect), the BMO analysts pointed out.

Still, on a per-subscriber basis, media partners earn more from distributing their OTT services through Prime Video Channels than from deals in which their channels are bundled into traditional pay-TV or “virtual MVPD” internet services, like Sling TV, YouTube TV, DirecTV Now or Hulu With Live TV, according to BMO’s analysis.

Meanwhile, Amazon is continuing to expand access to Prime Video — including with Comcast, the U.S.’s biggest cable operator. This week, Comcast began rolling out Amazon Prime Video to Xfinity X1 subs, which includes access most of the channels they subscribe to through Prime Video Channels (with the exception of HBO/Cinemax and CBS All Access because of the programmers’ contractual restrictions in their deals with Amazon).

Amazon first launched the program in December 2015 as the “Streaming Partners Program” in the U.S. with about 20 partners, and has since expanded and rebranded the service as Prime Video Channels. The company has launched Prime Video Channels in the U.K., Germany, Austria and Japan. The BMO analysts identified France, Spain, Italy, Canada, and India as potential markets where Amazon could roll it out next.

Source: Variety Media

ABC Seeks $2 Million to $3 Million for Oscars Ads

Walt Disney’s ABC has sold more than three-quarters of its commercial inventory for its February 24 broadcast of the glitzy awards fest, according to Jerry Daniello, senior vice president, entertainment brand solutions, for Disney ad sales, pacing ahead of its progress at this time last year. He declined to comment on the price of a spot in the event, but two media buyers familiar with negotiations for advertising in the event say ABC is seeking between $2 million and $3 million for a 30-second ad.

“We are working lockstep with the Academy,” Daniello told Variety in an interview. No matter the host or the format, “it’s the biggest event we have on our network.” Commercials tied to the Oscars broadcast and ABC’s red-carpet coverage generated approximately $128 million for the network in 2017, according to Kantar, a tracker of ad spending – more ad revenue than it generates on any other day of the year.

Advertisers didn’t buy time in the Oscars with a specific host in mind, Daniello says. “Most of the interest we had to date was locked in”, he notes. ABC has seen interest in the broadcast, he adds, from automobile manufacturers, retailers, beverage marketers, and makers of consumer technology.

Madison Avenue’s attention to the event – even with a steep price – shows that movie buffs aren’t the only ones infatuated with extravaganzas like the Oscars, despite some of the fluctuations they have suffered in audience. Marketers are also paying top dollar for other events that typically bring in some of TV’s biggest crowds. CBS is seeking between $5.1 million and $5.3 million for a package of TV and digital advertising around its coming broadcast of Super Bowl LIII, according to three people with knowledge of negotiations, and, according to one of those people, around $1 million for a 30-second spot in the network’s February Grammys telecast.

ABC’s Oscars telecast has been beset in recent outings by low viewership. Ratings have more or less tumbled steadily since an Ellen DeGeneres-hosted telecast won 43.7 million viewers in 2014. This year’s broadcast captured just 26.5 million viewers, a 20% drop from the 2017 telecast. ABC in 2016 renewed a deal to broadcast the popular event through 2028.

Despite the audience drop, ad costs for the event continue to rise. ABC sought as much as $2.6 million for a 30-second Oscars spot in its 2018 broadcast. The price in recent years had typically hovered at between $1.8 million and $2.2 million.

Simply put, in an era when TV audiences have splintered around on-demand streaming video, big crowd-pleasers like the Oscars continue to have value – even if they attract fewer eyeballs than they did in the past.

ABC and the Academy have started working with sponsors in recent years to allow more commercials that play off elements of the awards proceedings. In 2018, for example, Walmart used its commercial time to run a series of short films crafted by female directors. The retailer is expected to return to the broadcast in 2019. “We are experimenting with ad formats,” says Daniello. “There is strong interest in developing specific creative elements that link to the content.”

Realizing advertisers are interested in the ability of TV content to drive consumers to seek out information via digital and social media, Disney approached potential Oscars sponsors with research it commissioned with Google examining just that. The study showed ads in live “tentpole” events broadcast on ABC or ESPN in the first quarter drove more than twice the search engagement compared to other broadcasters’ big first-quarter live broadcasts. According to the Google study, search engagement for both ads and content in the 2018 Academy Awards was nearly three times the average of that related to events such as the Super Bowl, the Golden Globes, the Grammys or the Winter Olympics.

Advertisers also know the Oscar playing field is a protected one. The Academy of Motion Pictures and Sciences limits the amount of advertising time allowed in the awards broadcast, meaning the commercials have a better chance of standing apart from the pack. Even so, the Academy has allowed more commercials – between 70 and 80 – in the broadcast in recent years, compared with about 60 between 2007 and 2011, according to Kantar.

The success of the Oscars broadcast is often at the mercy of the slate of films up for honors.. When the top movies nominated are arty films aimed at older audiences, viewership tends to slump. When the nominees for best films are blockbusters, the ratings increase.

In 1998, approximately 55 million viewers tuned in to see the crowd-pleasing “Titanic” win “Best Picture.” Oscar ratings hit a new low in 2008, however, when just 32 million tuned in to see “No Country For Old Men” win the big prize, down from about 38.9 million the year before. Top films in 2018 were not blockbusters, but rather well-received films like “The Shape of Water,” ‘The Post,” “Darkest Hour,” “Three Billboards Outside Ebbing, Missouri” and “The Phantom Thread.”

Source: Variety Media

How NPR Aims to Bring Transparency to Podcast Metrics

NPR has unveiled a new open source podcast measurement project that aims to bring more transparency and granularity to podcast metrics. The project, dubbed Remote Audio Data (RAD), has been developed in partnership with a number of podcast app developers, ad tech companies as well as tech and media heavyweights including ESPN, Google and iHeartMedia.

At its core, RAD allows podcast publishers to tag individual moments in their podcasts — think ad breaks, mentions of sponsors, individual segments and more. Podcast apps that support RAD will keep track of listeners reaching those moments, and send relevant data back to publishers.

RAD has already been implemented in NPR’s own NPR One Android app, and podcast analytics provider Podtrack is starting to offer support as part of a beta program. In addition, NPR has gotten commitments from Acast, AdsWizz, ART19, Awesound, Blubrry Podcasting, Panoply, Omny Studio, PRI/PRX, RadioPublic, Triton Digital, WideOrbit and Whooshkaa to implement support for RAD.

The development of the standard was supported by Cadence13, Edison Research, ESPN, Google, iHeartMedia, Libsyn, The New York Times, New York Public Radio, Voxnest and Wondery. Notably absent from the list is Apple, which has long been one of the biggest players in the podcasting space.

Source: Variety Media

YouTube Warns Creators They May See a Drop in Number of Subscribers

YouTube is enacting a broad purge of spam accounts over the next two days, and it’s warning creators they could see a big drop in subscribers as a result.

The Google-owned video service regularly works to verify the legitimacy of accounts, and its purge of spammy and bogus users has led to steep declines in sub counts in the past.

YouTube, as part of its quarterly report on enforcement of community standards that first launched earlier this year, said on Thursday it deleted 1.67 million channels during the third quarter of 2018, 80% of which were for spam violations. All told, those channels represented around 50 million videos (which were removed along with the channels).

In addition, in the third quarter YouTube said it deleted 7.85 million videos (81% of which were first detected by automated systems) for violations of its guidelines prohibiting spam and adult content as well as “low-volume areas” like violent extremism and child exploitation. YouTube also removed over 224 million comments for violating community guidelines, most of which were for spam.

To identify spam accounts, YouTube says it uses a mix of “industry-leading techniques and proprietary technology.” Spammer accounts tend to subscribe to a variety of channels, instead of just subscribing to channels that bought the spam.

YouTube requires channels to have a minimum of 1,000 subscribers to participate in the platform’s ad-revenue sharing program, called the YouTube Partner Program. If the spam-purge causes a channel to drop below the 1,000-subscriber threshhold, it will no longer be eligible for the rev-share program.

Source: Variety Media

Apple Music Phases Out Connect Social Feed

Apple Music has notified artists that it will be phasing out its Connect social feed. Artists won’t be able to post to Connect anymore effective immediately, and their existing posts will be removed by next May, according to an email sent to artists that was first published by 9to5Mac Thursday.

“Today we’re streamlining music discovery by removing Connect posts from Artist Pages and For You,” that email reads in part. “This means you’ll no longer be able to post to Connect as of December 13, 2018, but all previously uploaded content will still be searchable until May 24, 2019.”

Apple first introduced Connect as a dedicated social feed when it launched Apple Music back in summer of 2015. Connect allowed artists to post music, videos, photos and more to Apple Music, and was billed as a way to directly interact with fans.

However, the feature saw less traction from artists than Apple had anticipated. The company deemphasized Connect in a subsequent Apple Music redesign, moving it from a dedicated tab within the app to a more generic recommendation area.

Source: Variety Media

Digital Ad Verification Firm and New Ad Formats

Integral Ad Science (IAS), a digital ad verification company, has hired a new CEO and board member.

According to IAS, they will focus on expanding IAS into new global markets and pushing into new ad formats. 

Source: Variety Media

Facebook’s Smart Display Gets ABC News, CNN, Web Browser & Instant Games

Facebook is expanding the content available to users of its Portal smart display slash video calling device: The company is bringing news content from ABC News and CNN to the device, which can now also be used to browse the web.

The launch of a new web browser to Portal will enable users to visit their favorite sites, check out recipes, and even play videos from YouTube. Facebook is also adding its web-based casual Instant Games to the device, allowing users to play “Words with Friends,” “Draw Something,” “Sudoku” and a handful of other titles.

Facebook launched Portal in October with an emphasis on video calling: The device, which is available with two screen sizes, comes with an integrated smart camera that automatically focuses on users as they move through the room — something that is supposed to enable more natural video calls.

But from day one, Facebook also added apps from a number of content partners, including Food Network, Spotify, Pandora, iHeartRadio and Newsy. The company also tightly integrated Portal with its own Facebook Watch video service.

With Friday’s additions, Portal users will be able to consume additional news content, and also have access to CNN’s Great Big Story video offering. And the company also added a few more video calling features, including additional AR effects.

Source: Variety Media

Amazon Starts Selling Google’s Chromecast Again

Amazon is once again selling Google’s Chromecast streaming adapter, three years after yanking the product from its website. The e-commerce giant began listing the 3rd-generation model of Google’s Chromecast streaming stick, as well as the 4K-capable Chromecast Ultra, on its website this week. The move could be a first step towards a more comprehensive business agreement between the two companies.

Amazon stopped selling Google’s Chromecast devices in late 2015, and at the time justified the move with the argument that Amazon’s own video services weren’t available on Chromecast. Google charged that this was Amazon’s fault, and that the company easily could have added cast capabilities to its apps if it wanted to. The two companies also disagreed on a host of other issues, including Amazon’s use of Android, and Google’s unwillingness to bring its own apps to Amazon’s Fire tablets.

The conflict gained some additional urgency when Amazon released its Echo Show smart display device in 2017. The device initially featured a customized YouTube integration, which Google quickly blocked, arguing that it violated YouTube’s terms of service.

Amazon followed up with a work-around, which was once again blocked by Google. And late last year, the search giant further escalated the conflict by also blocking Amazon’s Fire TV devices from accessing YouTube.

Amazon’s decision to once again sell Chromecast could signal an end to this feud, and increases the likelihood that Google may bring an official YouTube app to Fire TV. Spokespeople from Google and Amazon didn’t immediately respond to a request for comment.

Source: Variety Media

Internet giants pose existential threat to banks – BIS chief

Internet and ‘big data’ giants like Amazon and China’s Alipay pose an existential threat to traditional banks, the head of the Bank for International Settlements, Agustín Carstens, said on Tuesday.

Carstens, who took charge of the central bank umbrella group a year ago, said the huge amounts of data that big internet companies gather on their customers meant they potentially have advantages over established banks.

They may have better information on customers’ spending and lifestyles, which might make it easier to judge the risks of providing a loan.

“This is very big,” Carstens, who was previously governor of Mexico’s central bank, told Reuters on the sidelines of a banking conference in London where he spoke on the growing influence of big data.

“This can be an existential threat to some financial intermediation firms so it is very important for us to get all of this early on and try to steer it without distortions.”

Alipay, the payment affiliate of China’s Alibaba , is already catching up with HSBC in terms of market capitalisation. The growth of Alipay and companies like Tencent has prompted Chinese regulators to take steps to be able to monitor them more closely.

There are also questions over whether U.S. giants such as Amazon, Google or even social media firms such as Facebook, could expand in financial services with similar setups.

“Each model is different, but what is universal is the exploitation of information,” Carstens said.

“Amazon doesn’t have much of an open financial intermediation model, they don’t have a financial arm like Alipay but there is nothing that prevents them from generating it.”

The key point was that it was not yet clear how much of a competitive edge social media and shopping data can give internet companies that go into financial services, he said.

From the perspective of the authorities, the questions are whether it will create any risky lending or destabilise the financial system in any way.

“We need an open public discussion,” he said in a speech entitled “International coordination is the name of the game”, which he gave at the conference.

Source: Reuters

Media Companies Trail in Artificial-Intelligence Adoption Amid Fear, Unfamiliarity: PwC Research

Companies in the media sector are generally progressive in embracing digital tech to adapt their businesses — but they are more reluctant than other industries to move forward with artificial intelligence, among other emerging technologies, according to new research from PwC.

Per PwC’s survey of 1,000 U.S. executives for its “2019 AI Predictions” report in multiple industries, 20% said their companies will deploy AI across their businesses next year.

By comparison, media companies are in the extremely early phases of implementing AI, the consulting firm’s research shows. Only a limited few have defined an AI business case and deployment plan — and hardly any have projects currently in process, PwC found. Just 7% of media execs said they are making “substantial” investments in AI, according to PwC.

“AI has been a hot topic, but it’s not in production as much as you think,” said Scott Likens, who lead PwC’s emerging technologies group. “There’s still mystery about emerging technologies among business executives.”

One of the concerns about AI is that it will introduce new problems. The potential for AI-powered cyberthreats was the top-ranked concern among tech, media, and telecommunications execs surveyed by PwC (43% of whom identified it as the No. 1 worry).

“We automatically don’t trust something we don’t understand, even if it’s better,” Likens noted.

There’s also a lack of understanding of how AI can be used to improve efficiencies and create new revenue opportunities, according to Likens. Artificial intelligence, depending on how it’s defined, is 50 years old, he said. So far, though, the promise of AI has been tough to explain. “People say they’re using AI when in fact they’re just using analytics,” Likens said.

The benefits of AI applications can be intangible, according to Likens. For example, it’s hard to measure the extent to which an AI-powered personalization feature for content results in a better overall customer experience, he said.

Among media execs PwC polled, only 12% identified AI as being the “most disruptive” emerging technology in the next three years.

Still, media executives do see the potential for AI applications. Of respondents who picked AI as the No. 1 disruptive technology, 19% said they expect AI will help cut costs, 5% said it will boost productivity, and 3% said it will improve customer experience.

One of the biggest challenges — as with the adoption of any emerging technology — is changing the culture of an organization to embrace it, Likens said. “Changing process takes a lot of time,” he said. “Upskilling the workforce is difficult. There’s knowledge on both sides that has to come together — that includes people with AI domain expertise and businesspeople.”

In addition to AI applications that can reduce costs (like automating call centers and customer service), artificial intelligence used in conjunction with other technologies can produce big wins, according to Likens. “We think the convergence of emerging tech is where it’s at,” he said.

For example, PwC deployed an application for a client (which Likens declined to identify) that combined blockchain and AI to automatically manage content-rights and royalties payments. “A lot of the manual processing went away by automating that smart-contract process,” he said.

Likens also sees promise in combining AI with virtual-reality and other immersive experiences. “With AI it’s not just canned interactions… it’s a live interaction model,” he said.

Source: Variety Media