“All TV viewing will be social in the future.” It was a bold and loaded statement made by Joanna Shields, Facebook’s MD and VP of EMEA, during her keynote held at Amsterdam’s IBC. But very few at this year’s show were betting against this scenario. On the demand side, social recommendation and engagement with broadcast content is proving to be a hit with audiences and a natural evolution of water cooler conversation. On the supply side of the industry, the social graph of the audience’s implicit and explicit preferences is becoming a highly valuable asset for effective recommendation, discovery and merchandising of content. In the medium term this data has the opportunity to be productised as additional insight for advertisers to accompany the existing broadcast spot trading model, and ultimately the evolution path of broadcast ad space.
However the rapid growth of the role of the major social platforms, whether Facebook, Twitter, or local market specialists such as South Korea’s Cyworld, as a discrete or integrated component of broadcast services is forcing all parties in the media supply chain to examine what they want their relationship with the customer to be, whether they want to own a customer identity, and what option they want on future models of customer data monetization.
The integration of social media and both scheduled and on-demand premium video services is being driven by two trends: growth in the distribution and consumption of premium video content via web services and audience multi-tasking.
Audience multi-tasking
Multi-tasking, the act of using a smartphone, tablet or PC, while watching television is developing into a common behaviour observed in mainstream audiences, driven by a growing demographic penetration of iOS and Android smartphones, the emergence of the tablet segment and steady state growth in the notebook PC base. According to Ovum’s Consumer Insights survey across eight countries, more than 70 per cent of people claim to at least occasionally use a second-screen device while watching TV, with 37 per cent doing so on a regular basis.
Disconnecting eyeballs from broadcast ad inventory?
The usage of second screen devices while watching television creates an audience engagement challenge. Since the launch of Tivo, the broadcast industry has wrestled with the impact of DVR on broadcast ad engagement. Multi-tasking now presents another threat to the broadcast ad spot, as the television is relegated to the second, ambient screen. This threat is compounded by the behavioural trends of consumers using second screen devices. Two applications predominate in all markets in Ovum’s user research: casual web browsing and social media usage, handing Google and Facebook a large slice of this multi-tasking activity.
Reconnecting through companion applications
But audience multi-tasking also presents opportunities for studios, channel programmers and pay- TV platform operators to create new media products, extend their audience reach beyond the television screen and mine data about their audiences for their own content and service merchandising purposes, or provide additional insight to advertisers. An application in this context can be distributed to the end user via a browser, or via a native application store such as the Apple App Store, Android Marketplace, or as an application on a social platform, such as Facebook. The content of the application itself is bounded only by the limits of the creative, but what is clear is that companion video is one possibility.
The question is who has the right to provide a companion app-based service to the audience? Is it the studio, a sports federation, channel programmer or pay-TV platform operator?
FremantleMedia, for example, argues that the strength of the X Factor brand gives them a direct relationship with the customer and hence the position to own that customer within a derivative video service or companion content application. For buyers of the format however such as Seven Network in Australia, they will argue that X Factor’s audience is its own customer asset. This principle will become increasingly important as broadcasters with micropayment aspirations for catch-up content move these projects forward and need to become effective merchants. Traditional supplierservice provider relationships are under pressure as studios and sports federations look at direct to consumer distribution models. If channel brands do not claim their audiences as customers, someone else will.
Customer ID landgrab
The economic driver for this customer relationship ownership landgrab is not only that customer data is valuable for a provider’s own content services, but also that advertisers are looking for additional audience insight beyond the traditional panel based measurements. Ratings as a currency for broadcast media trading continues to largely defy recalibration, but gradually alternative data sources, such as set top box and web platform data are entering the media planning process. Even Nielsen is taking a position via its partnership with Facebook [see pg 10].
However, Facebook is the text-book “frenemy.” It is actively targeting broadcast advertising budgets today with a message that its platform has the tools and available data to deliver not only on brand advertising, but also integrated direct marketing, customer support and customer advocacy. This data-driven approach to integrated multi-channel marketing is on-message and on-target for brand advertisers being forced to do more with declining advertising budgets.
The strategic response to move fast to establish ownership of the customer and the customer identity however is loaded with risk. Management of large databases of customer information are traditionally not a core competency of channel programmers or terrestrial broadcasters. Very few broadcasters have anything that a retailer would recognize as a secure CRM capability. Moving to a direct service relationship with the customer, where they share information based on trust and explicit terms of service is also a shift from an implicit or regulatordefi ned relationship.
The reality is that media companies are highly visible targets for cyberattack by motivated third parties. Channels deliberately program controversial content. As channel brands try and replicate channel choice on digital platforms, the reputational impact of a security breach and identity theft will inevitably be very high. The average cost per customer record of a data breach is more than USD$200. The total cost to Sony of the data breach to the PlayStation Network earlier this year is likely to be measured in the billions. As channel programmers build new relationships with their audiences that require a trust-based exchange of personal data, a similar event could prove fatal.
This sets up the strategic question. Does an organization that is in the business of video content production, acquisition, curation and distribution outsource the identity management and security challenge and use a federated identity service, such as Facebook Connect? The risk in such an approach is that content service providers end up not just outsourcing the security risk, but also their relationship with both audience and advertiser. In the long term, the organisation that aspires to be both service provider as well as producer must build a direct relationship with their audience, but to do so in full view of the risks and costs of developing this new competency