STREAMING LIVE SPORTS IS ABOUT TO BECOME BIG BUSINESS: There’s a fascinating set of developments occurring with live streaming of play-by-play sports. In 2016 Twitter was the first publisher to cut a streaming-only rights deal with the NFL. The endeavor was generally deemed successful, with Twitter claiming an average of 3.5M unique viewers per game against licensing costs of $1M/game. (Guessing they didn’t turn a profit on this deal, but it was more of a year one experiment than anything.) Now other publishers like Facebook, Amazon, and YouTube are showing interest in the NFL, as well as just about every other play-by-play property they can get their hands on. The reason for the demand is simple – sports is exclusive content publishers can use to draw new uniques to their platform with the hope of recycling them into regular users. For the leagues/teams streaming represents incremental revenue. Although you have to wonder if streaming games will eventually cannibalize broadcast viewership and negatively impact their mother ship TV deals, which are priced in the billions instead of millions. This Recode article explains the marketplace dynamics and breaks down the pros/cons of the four main competitors for the NFL’s 2017 streaming rights.
NIELSEN’S EAR BUD PROBLEM: Lately I’ve been on a rant about Nielsen’s mounting challenges with its PPM measurement platform. While most of their problems have to do with sample size which causes ratings instability, there’s another lurking issue which is a much more fundamental problem. PPM can’t detect listening through ear buds unless the listener sets up the maze of wired connections shown in the image below. (I’m not kidding, that’s a real picture of what a listener would have to plug into and wear.) Inside Radio’s article explains the problem for broadcasters. In a nut shell the vast majority of stream listening occurs through ear buds, so as streaming grows PPMs will miss a larger and larger chunk of listening. Nielsen’s response is that only 2.6% of current broadcasters’ listening occurs via stream (which is a whole different problem), so not measuring stream listening is statistically insignificant in the short term. In the long term Nielsen’s plan is not to use PPMs to measure stream listening at all, and instead use broadcaster-installed SDKs to measure server-based data – which is how the pureplay streamers are already measured through Triton. No wonder broadcasters are starting to talk about bringing back paper diaries and getting rid of the PPM dumpster fire all together.
HEADER BIDDING IS HEATING UP: Finally today, there’s a battling brewing for the future of display revenue in the form of Header Bidding. Google is the reigning king in display because they run most of the exchanges (ad networks) which fulfill programmatic bid requests from publishers. But recently companies like Amazon have developed header bidding technologies which effectively bypass the Google-only exchanges by allowing multiple networks to directly bid for inventory from participating publishers, thus driving up the price for premium display inventory and simultaneously cutting out the middle man named Google. (If you really want to geek out on the header bidding process, or just need a good sleep aid, see the diagram below.) Facebook is the latest publisher to get into the scrum with their announcement to begin header bidding with their Facebook Audience Network (FAN) properties. I know this topic is a little dense, but it’s important to understand as it has the potential to revolutionize how display inventory is bought/sold. The Motley Fool is featuring a good summary article explaining the nuances of Facebook’s move as well as what’s at stake.
Have a great Tuesday guys!
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