There’s no mistaking the dramatic changes taking place in the video content realm. Consumers are avidly seeking out content from a variety of traditional and new content providers, and they’re eagerly tracking it down across mobile, digital and linear channels. In fact, American media consumption recently hit a new milestone in the first quarter of 2016, with subscription video-on-demand (SVOD) usage now equal in the U.S. with DVR usage.
While the myriad content offerings is a bounty for consumers, who now spend 70 hours each week with media, content providers are increasingly challenged to break through and make sure their offerings are front and center. Despite the commotion in the space, however, many of the industry’s best-known content providers agree on one thing: The consumer needs to be the primary consideration.
“I’ve been a proponent of a holistic view of content for consumers my whole career,” said Kris Magel, president of Initiative U.S., during a content monetization panel at U.S. Consumer 360 this week in Las Vegas. “And that puts the focus on new technology, new programming and new revenue opportunities. While some have said video has changed more in the past five years than in the past 30, I would argue it’s changed more in the past single year than in the past 30 years.”
As he dove into the panel discussion, Magel outlined how much choice is currently available, then asked how the panelists see their companies’ futures, particularly with regard to competitive advantage. And despite Magel’s probing about perceived overlap among content providers, the panelists from Hulu, CBS, Turner, Google (YouTube) and Facebook each outlined individual strategies that approach content, distribution and advertising quite individually.
“Very simply, we’re television,” said Peter Naylor, senior vice president of ad sales at Hulu. “We are SVOD and OTT, and we’re TV for the whole family. In fact, today, we’re 70% in the living room. That’s a large shift from where we were when we started. Mobile tablet use is 15%. And from a content perspective, we’re focused on offering acquired and licensed last night’s TV programming. That’s our value proposition. Over time, however, original content will be a differentiator.”
Hulu’s position, however, stands apart from those of CBS and Turner, both of which have strongholds in the traditional TV space. For CBS and Turner, the focus is on creating premium long-form content and leveraging that digitally so that consumers have access to it wherever and whenever they want it.
“We have not changed direction,” said Donna Speciale, president for Turner ad sales. “We will always be about premium content. Now, it’s just a matter of how many screens we’re on. Premium seems to be what consumers are craving.”
Mark DeBoise, executive vice president and general manager for CBS Media/CBS Interactive, agreed, emphasizing that CBS’ business centers on long-form content, adding that the living room TV remains the No. 1 screen for video viewing—even though the type of programming on that screen is evolving.
So where do newer providers like YouTube and Facebook fit in? To their credit, they’re focused on differentiating themselves in places traditional providers aren’t. For example, YouTube is focused on nourishing the content generated by its four million creators—and it spends most of its effort looking at mobile. For Facebook, the strategy doesn’t involve creating programming. Rather, the focus is developing a channel for short-burst, real-time content. And both YouTube and Facebook have younger viewers in mind.
“We have a deep relationship with our creators—that’s the point of difference for us,” said Lucas Watson, vice president of global brand solutions and innovations at Google. “We want to deliver high-definition, high-quality video across every screen, and we want to do that for any video that hits on the emotion that our creators bring forth.”
But because the content scenario is evolving and providers are broadening their offerings and footprints, Initiative’s Magel pushed the conversation to the topic of “everyone getting into everyone’s business.”
“YouTube used to be an upload platform,” he said. “Hulu was an acquired content platform. There were ad-free and ad models. Today, things are much different.”
“People chose ads for a reason,” said Hulu’s Naylor. “There is a cost difference, but not all ads are shunned. The screen is the most important factor. So now we have an ad-free option. The majority will chose the ad supported option, but there needs to be two options.”
With regard to options, Turner’s Speciale stressed that the space is really open for anyone, and that means it would behoove Turner to be as many places as possible and supported by ads.
“It’s about thinking about the consumer and addressing what they want,” said Speciale. “It’s not a one-size fits all. There is overlap. We’re all trying to figure out what the consumer experience is and how to get there. So we have to understand where the consumer is going and be there.”
“The experience is changing,” added Facebook’s Smallwood. “You want to make sure the quality and platform is good. The consumer is what we’re all trying to optimize for.”
On the subject of broader content distribution, CBS’ DeBevoise stressed that his network would want its content to be in every package, which sparked a slight air of restlessness across the panel, given that some companies have not shared viewership data and others are still unwilling to share control of ad sales.
“We do distribute a little on Facebook,” said Turner’s Speciale. “We have a partnership for CNN and Facebook Live, but there are very specific guidelines. The video needs to be within 10 minutes because it can’t show up in the SVOD space. So I think Facebook needs to share a little more.”
“We do share some,” said Smallwood. “We share social content data and audience ratings data. Specific data elements are still in the mix. The real issue has been about how can we share the data in a privacy safe way. We’ve also provided more data over the past year than we ever did before.”
CBS’ DeBoise emphasized a different issue: control over ad sales. “We would love for CBS to be in every package. But control over ad sales is the piece that’s missing. We want to be the ones going to the meeting and pitching our stuff. We don’t want another provider selling our content. We have to have mandatory control over our own inventory.”
When all was said and done, however, the panelists agreed that the consumer is in control and that each company needs to find ways to deliver value and options as diverse as their viewers.