Broadcasters should give up on their players and let platforms aggregate their VOD

Broadcasters have had a great run since 2007 dominating catch-up TV on multiscreen devices, with viewers watching their VOD content largely through broadcaster apps, but those days are coming to an end. That is the view of Decipher, the UK media consulting firm, which believes that the advent of sophisticated whole-home services that redistribute linear or on-demand content from a central STB/DVR server to multiscreen devices will make broadcaster ‘player’ apps redundant. 

As we reported previously, Decipher believes platform operators need to deploy next-generation platforms with the ability to provide what it calls “multi-room on crack”. This involves a new multi-tuner and mega-memory media server that can transcode broadcast channels on-the-fly so IP versions can be streamed around the home to second televisions or portable devices. 

This server should also provide an enhanced version of what DISH Networks has done in the U.S. with its Primetime service, recording lots of popular broadcast channels simultaneously and automatically, and using those recordings to deliver catch-up TV. Decipher believes this is a much better approach to on-demand viewing at home than using OTT apps. 

This kind of whole-home solution, when they are deployed, will spell the end for broadcaster players, the company reckons. Decipher’s Managing Director Nigel Walley explained the thinking at a recent Antenna presentation on ‘The Evolving TV Landscape’. He thinks it is very compelling for consumers if a company like Sky can deliver all broadcast channel catch-up assets via its own multiscreen app, using its own aggregation, but it also benefits broadcasters and advertisers.

The platform operator can become a single source of data for all viewing in the home, including at the level of individual viewers. Moreover, there is no data that a broadcaster currently gets from viewers using their player apps that should not be available to them, and shared with them, by a platform operator. This may involve a commercial data sharing deal of some kind but Decipher is convinced that some broadcasters, and especially commercial broadcasters, might actually welcome the thought of being able to abandon their own player projects and the management burden these place upon them.

And Walley pointed out that broadcasters need viewing data from their platform partners for linear viewing anyway, and linear accounts for the vast bulk of their audience, even today. He believes that when it comes to developing a broadcaster data strategy, you cannot look at your own player app as anything other than a small part of the overall data requirement. Using supermarkets as a comparison, he said the platform operator is the main store and a player app is the equivalent to their petrol station outside. You must have the data from the main store.

So, if you rely on a platform partner to get some of your most valuable data already, why not rely on them for the catch-up viewing data as well? Walley has long argued that Pay TV operators in particular have the best data of any media company, courtesy of their billing relationship and understanding of who lives in the house and a whole raft of other first party and third-party data.

Walley argues that TV platforms (whether pay or free) are the only ones who could conceivably pull together viewing data on linear and VOD and analyse them together. A broadcaster has no idea if people who watch linear also use VOD because they do not have the ability to correlate the two, he explains. “Only  a platform could do that. However, the platforms are letting the side down a bit at the moment, as they currently seem unable or unwilling to provide good data quickly to the broadcasters.”

He also acknowledges that today the free-to-air platforms still rely on broadcasters running their own OTT apps into the set-top boxes, something he thinks is madness.  â€œWe need a single VOD system built into a YouView box for instance, to allow BT to bring together viewing data on linear and VOD  in their boxes.”

Decipher thinks it is inevitable that operators will become the umbrella aggregator for broadcaster catch-up content that is presented with broadcaster branding. He has long bemoaned broadcasters for thinking that they should be the aggregator themselves and that they have customers rather than viewers. 

He uses another supermarket comparison, declaring that broadcasters are like Heinz whereas the platform operator is the supermarket, like Tesco. “Heinz and Unilever do not have their own corner shops and they let Tesco run the supermarket or corner shops,” he explained at the Antenna event. 

Broadcasters should not fight against operators aggregating all the catch-up content on their media servers and via their umbrella multiscreen apps, but welcome it. And he suggested an inevitability to the outcome anyway. “It is not a battle the ‘players’ will win, anyway.”

Separately to this, Decipher has been analyzing how the advertising world could treat the different forms of on-demand viewing that we see in our homes today. There is an important distinction at this moment between what Decipher calls TV-VOD, meaning on-demand assets aggregated by the platform operator, and player-VOD, where the content is viewed through the broadcaster app. 

The key difference today, when deciding how to measure and trade viewing of catch-up content, is that TV-VOD is regarded as a shared experience, with a multi-person audience in front of the television, whereas player-VOD is considered a single-user viewing experience. And if you want to introduce targeted advertising, player viewing relies on cookie or log-in data whereas TV-VOD relies on platform operator data about the home and its occupants.

In terms of measurement, as TV-VOD is an ‘audience’ you need to know who is in front of the television, Decipher explained. “You cannot assume that the video was served to one person, like with player viewing”.

The company presented four possibilities for how catch-up viewing could be traded and monetized. In option one, combine linear TV with TV-VOD and DVR (up to the +3 or +7 day point at which time-shift views are still included in the broadcast ratings). Then price all views the same and wrap them up as one deal, taking the opinion that “it is all TV”.

The second option is to create a new VOD category for TV-VOD that is neither broadcast advertising or player advertising. Decipher has considered the potential for a new metric like the one found in the magazine market where you measure the circulation, work out the readership per magazine (which might be proven to be an average of 3.3 people reading each magazine that is sold, for example) and then multiply the two together in order to get your true readership figure. 

The company points out that VOD viewing is too fragmented to use panel measurement, but you could use a panel to work out the multiplier (i.e. the ‘readership’ per magazine, which in the case of TV-VOD is the typical number of people in front of the television for defined on-demand sessions. “So BARB might find that in an average home watching Broadchurch [the hit ITV drama] the on-demand audience looks like this…” 

You use set-top box data to show that 750,000 homes saw the show in a TV-VOD setting. “You are then able to monetize the audience that is in the room. Everyone gets monetized because you are basing it on STB census data. The downside with this option is that you have to create a new VOD category but this is the approach that most accurately represents what is happening.”

Option three is to create three different VOD categories for advertising and measurement, this time with TV-VOD split into platform operator and broadcaster content, with player-VOD making up the trio. The fourth approach would be to treat TV-VOD the same as player-VOD so that one served video stream equals one impression. TV-VOD and player-VOD are sold together and use player-VOD metrics in this scenario.

If Decipher had to bet on which approach will win out, it would opt for VOD and broadcast bundling, even though it would probably lead to a reduction in VOD CPM (cost per thousand) rather than raise the price of linear. 

The whole picture could get quite messy if we see the arrival of the ‘multiroom on crack’ model where the Pay TV operator projects their experience onto every screen, with more broadcaster VOD coming under their umbrella. As Decipher pointed out, the lines start to blur if you start an on-demand session on the television but then move to a multiscreen device. “Is that TV-VOD?” The question was not meant to elicit an answer but only to highlight the growing complexity of television and on-demand delivery.