Last week new Ten chief digital officer Rebekah Horne called for more unity from Australia’s TV broadcasters around the creation of a unified catch-up TV service.
Her plea is sensible. The reality is the Australian Free to Air TV broadcasters are being left behind when it comes to video online. The majority of inventory volume is simply found elsewhere – predominantly on YouTube, the music based Vevo and sprinkled across a bunch of newly created video ad networks.
In response to Horne’s comments, SBS chief Michael Ebeid flatly stated that “the boat had sailed” on a unified catch-up TV service, proudly claiming that SBS now had 4 million video views a month. But those 4 million video views, if sold out, would be generating SBS maximum revenue of $150,000 a month after media agency rebates. Hardly earth shattering and a sorry sign for the online video inventory if such numbers indicate an opportunity that has already tipped.
The reality with video is that inventory volume is key. For an area of advertising so keenly hyped by advertisers and agencies, video is troubled. For one thing, the larger, local heritage players are struggling to generate serious inventory levels. Second video, like paid search, is dominated by one player – Google – which has the dominant platform (YouTube) and the broadest content. Third, aside Google and the above mentioned Vevo, inventory is fragmented across local and international sources and formats. When it comes to local video revenue, YouTube would be the largest player by a mile.
Seven, Nine and Ten have done an admirable job over the years in trying to develop their video properties – adding programming to their online platforms, improving quality and making content more accessible across platforms. The ABC has perhaps done the best job, with its iView player widely praised and the network offering most programming online rapidly after its broadcast date.
The problem for the commercial players their platforms are not front of mind for users – unfortunately they don’t ‘own’ the video space. Consumers wouldn’t view ninemsn’s catch-up service, for example, as the definitive place to get video online. So it relies on its TV audience coming back to the online platform to either re-watch an episode of their favourite program, or catch up on an episode they missed. It’s the same for Seven and Ten.
It’s YouTube that does own the video space. It’s the default for users when they want to watch something, anything, online. Its depth of content – from that great AFL mark during the weekend, to footage of a favourite band, to movie trailers – is astounding and its content is more often than not placed in front of users via embedding. YouTube has literally tens of millions of videos, whereas Yahoo7’s Plus7 hub has just 44 programs.
Look at the Nielsen numbers from October 2012 below to see how much of a head start YouTube has:
YouTube – 10.4 million users per month, 1.426 billion streams per month
Ninemsn Video – 2.4 million users per month, 34 million streams per month
Yahoo!7 Video – 1.28 million users per month, 5.5 million streams per month
ABC – 1.3m users per month, 15.5 million streams
Ten Video – not in top 10
Between them in October, Nine and Seven have 2.8 per cent of YouTube’s inventory. Add the ABC and it’s just under 4 per cent. And armed with an increasingly large sales team, unrivalled user data and significant cash, YouTube is a significant threat to every broadcaster.
The only other area of digital so weighted towards one company is search – the most lucrative form of digital advertising and another area completely dominated by Google. The other high growth area is that of programmatic trading, which so far is looking like being dominated by Google to the same extent. Will Google be given the same free kick in video by an industry too proud to join together to compete against it?
In the US, the large TV networks realised the threat back in 2007 and created Hulu. Hulu saw Fox, NBC Universal and Disney pool their programming assets online into a jointly owned platform that aimed to deliver premium programming immediately after it was broadcast. After being widely mocked by elements of the technology and digital community, Hulu emerged as a solid offering for both users and advertisers, serving over 1.4 billion advertisements per month and working its way to a $2 billion valuation.
The concept behind Hulu was a simple one: create a centralised home for video that gives consumers a wide range of premium content that isn’t available anywhere else. On top of this, create a world class user experience that the equity partners can jointly fund, and centralise the ad sales and commercial function.
Of course, a united platform for content doesn’t necessarily mean a unified platform for ad sales - networks could retain their valued sales relationships and maintain their relationships with their advertisers. But Australia’s TV networks need a similar unified front if they are to present a serious challenge to Google. It is simply too big an area for Australia’s media egos to get in the way of what is required to survive. How far will they let themselves get left behind before they realise collaboration is what is required?