Wible's Weekly - Social Share Shifts, OTT Ads, and Broadcast Maneuvers - Janney/MediaEntertainment

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Social Slipping - FB continues to be the undisputed leader in worldwide social sign-ins (logging into other sites using social network IDs), according to user management platform provider Janrain. However, Janrain's 1Q13 data suggests that GOOG is gaining share. This data complements GOOG's search data, creating a more powerful ad targeting platform. FB's market share of social logins declined to 46% in 1Q13 from 54% in 3Q12, compared to GOOG's share growing to 34% from 25% over the same period. GOOG especially made gains in consumer sites, which could imply that users have dedicated Google + accounts for (non-social) ecommerce purposes. Twitter also continues to lose share, except in music, which could explain their recent push into new amortization models like media discovery services.

Pros and Cons of Programmatic Buying – Programmatic digital ad buying is gaining steam, despite concerns shared by publishers and buyers. Approximately 70% of media buyers and publisher in North America already do some programmatic buying, according to a survey by Digiday and ad technology provider OpenX. The survey also indicates that 77% of those using programmatic buying plan to increase it in the next year. However, publishers are concerned with pricing, brand image, and media buyer relationships. Buyers value the improved pricing and targeting, but are concerned about the lack of data to inform bids.

IPTV Updates – Wealthier homes (incomes > $100k), have higher SVOD adoption than lower income homes, despite the relatively affordable price points of SVOD, according to a report by Nielsen. Wealthier households over-index SVOD adoption at 185% vs. lower income households under-indexing at 47%. This appears to validate the view that many viewers see SVOD services as additive to TV service, not as a substitute. Separately, AMZN announced entry into the set top box market, which will pit them against Roku and AppleTV, but also devices such as the PS3 and Xbox 360 that are able to stream video. It is not clear how this device would differ in the market or compete with other devices that already include streaming functionality.

Online Video Advertising – Online video ad views increased 45% from January to March 2013, according to data from comScore. This contrasts with the 9% increase in content video growth, which implies a higher ad load. This is further emphasized by the increase of ads as a percent of video time from 20.1% in January to 25.1% in March. The data from comScore also suggests that growth in the number of viewers is slowing down (2% growth), but that they are watching more, slightly shorter videos (videos/viewer is up 14% from Jan-March, while minutes per viewer is up 6%). The increase in ad load and videos per viewer suggests that the ad tolerance limit has not yet been exceeded and we could see higher levels of monetization from video.

Broadcast Retransmission – Related to our recent conference call on retransmission, broadcaster CBS took a stake in TV streaming firm Syncbak, likely in part as a strategic move against Aereo. Syncbak's technology allows broadcasters to replicate national, local and affiliate partnerships on the Internet and on mobile devices. This alternative may also harm broadcast revenue in the same way it would be broadcasters move to become cable networks, as they have recently suggested. Stations are in an interesting position as they face this uncertainty, retrans growth, and the sale of spectrum to mobile operators.

Tony Wible joined Janney Montgomery Scott in 2008 and is a Managing Director covering the Media and Entertainment sector after spending the previous 10 years at Citigroup Investment Research—most recently covering the Broadcasting and Entertainment Services industries.
Tony can be reached at twible@janney.com.

Janney Montgomery Scott LLC, is a U.S. broker-dealer registered with the U.S. Securities and Exchange Commission and a member of the New York Stock Exchange, the Financial Industry Regulatory Authority and the Securities Investor Protection Corp. Disclosures may be reviewed at Wible's Weekly.

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