Why live television is the key to online fortunes

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New research reveals how broadcasters believe the opportunity associated with advanced TV advertising will prove hugely significant as competition for live online viewing heats up. Yospace’s Paul Davies examines the future of live and linear video.

Yospace recently sponsored a programme of research by MTM looking at the future of live television and its transition to over-the-top (OTT). The programme included interviews and discussions with some of the leading players in broadcasting across Europe, and the candour of the responses was refreshing. These are some of the findings.

It’s no secret that TV viewing is becoming increasingly fragmented – audiences have more choice over the type, platform and device on which to consume content than ever before. Across Europe, broadcasters are racing to deploy multi-platform TV offerings and, almost hand in hand, advanced advertising capabilities across a growing range of different platforms and devices.

Another key factor behind the fragmentation of the way video is delivered and consumed is the sharp growth of on-demand content. In such an environment the high quality and ongoing value of live and linear video is often overlooked, but advertisers are still huge supporters of the medium for a very simple reason: live and linear video can attract mass concurrent audiences in a way that the more fragmented offerings simply cannot reach.

It is for this reason that many European broadcasters believe that, despite reports to the contrary, live and linear video has a bright future.

As live viewing moves online they also see opportunities to more fully monetise content than ever before via new advanced TV advertising technologies.

This point bears greater significance when you consider rumoured moves by the major internet media companies into sports-rights acquisition, which suggest that they too realise the unique value of live content.[advert position=”left”]

Live event programming, particularly sport, has incredible power to attract concurrent audiences at scale: it accounts for around 10-15% of total linear viewing on TV sets and approximately 70% of simulcast viewing on broadcasters’ OTT video services in the UK.

With such dominance in the rapidly growing online world, many players in the industry expect sports rights to be a focus for future competition in the live and linear TV market.

At present, internet media company investment in live event rights is low compared to broadcaster investment, but it’s widely acknowledged that they have a significant appetite for content to drive customer acquisition for pay services and to attract large-scale audiences for advertising-funded services.

In most cases, they have limited their acquisitions to lower tier rights, but many people expect companies such as Google, Facebook and Amazon to increase their investment in rights to top-tier sports and major live events.

However, building a long-term business case will be difficult if they acquire sports rights at inflated prices. Many commercial broadcasters and TV platforms have already developed their online simulcast TV services are in the driving seat in this regard.

Broadcasters are already at the coal face and have a great opportunity to ‘supercharge’ their IP simulcast advertising offers with the next generation of advertising technology. This will significantly aid their defence against internet media competitors.

One fast-growing piece of ad-tech in particular is gaining a lot of traction. Dynamic ad insertion (DAI) into linear IP streams provides a strong growth opportunity because it enables broadcasters to sell previously unmeasured and unsold advertising inventory, creating an immediate new source of revenue.

Once DAI is in place, broadcasters are seeing opportunities to strengthen their data-driven advertising offers.

Ad inventory on IP simulcast services sells at a premium due partly to the popularity of live sport content, which provides advertisers with a high-quality context and an attractive audience demographic. The nature of the content is a contributing factor, but so is the nature of simulcast as a broadcast medium – simulcast viewers are seen as more likely to sit back and engage with the live nature of the content than they are with catch-up content, which leads to higher ad view-through rates, and therein lies the value of live television to advertisers and broadcasters alike.

Broadcasters and pay-TV providers are confident that linear TV has enduring appeal and that premium content such as live sports will continue to attract large audiences. Most intend to invest further in advanced TV advertising capabilities to increase revenues and remain competitive and improve ability to monetise their content by offering advertisers more data-driven targeting opportunities.

Many broadcasters believe the scale of opportunity associated with advanced TV advertising, and its potential to grow as audiences increasingly migrate to IP channels, will prove hugely significant as competition for live online views heats up.

The future face of live television as it moves online is hard to predict, but it’s clear that broadcasters across Europe have reasons to be cheerful as long as they’re able to maximise the potential of the technology on offer. As for live television as a medium, its going to be around for a long time yet.

The full findings from the “Future of Live and Linear Video” research programme are available to download here.