How COVID-19 Quarantine Locked In Connected TV Growth
If you’ve been navigating the historic transformation of the media business in recent years, from consumer behavior to technology to marketing strategy to shifting business models, you can feel how much faster the winds of change have been blowing since the onset of COVID-19.
What does that seismic change look like inside of the still-emerging world of Connected TV not just at subscription-only services such as Netflix and Disney+ but in the free, advertiser-supported segment? And what does that mean for the future of CTV as well as the traditional multichannel TV world? I went deep with a few of the executives leading the construction of the CTV infrastructure to better gauge the depth and impact of the shifting winds.
Unquestionably, the sudden surge in consumer, content producer and advertiser activity in CTV has put heightened stresses into that relatively young system. But Jack Perry, CEO of Syncbak, a company that manages complex CTV operations for hundreds of broadcast stations throughout the country, told me that as an entrepreneur “our company is built for the stressful times. I get worried when we aren’t stressed.” One of the consistent themes I heard in my discussions was how well the CTV infrastructure was adapting to the flood of new activity.
The early post-COVID-19 CTV viewer statistics confirm what we all anecdotally know from our own inflated house-bound bingeing. Mark Rotblat, the Chief Revenue Officer of Tubi, one of the leading free ad-supported CTV apps (recently purchased by Fox), told me that in April the company streamed 200 million hours of content to users, a 150% increase over April 2019. Confirmation of this trend came from among others Tru Optik, which provides data and analytics on CTV audiences for the advertising and media communities. Their Chief Operating Officer Frans Vermeulen told me that in just one week, from the end of February to the beginning of March, they saw a 54% leap in CTV viewing on ad-supported CTV platforms. Vermeulen added that the audience boost is in part fueled by increases in both homes using ad-supported CTV and in devices inside of the homes watching it, which makes sense with the repopulating of so many formerly empty nests.
Perry at Syncbak is seeing much the same in the local broadcasting world. Even with local news from local broadcasters, seemingly the most traditional TV content out there, Syncbak has seen a 60% increase in CTV audiences since February and an 84% increase in video-on-demand viewing of local broadcaster content. One of Syncbak’s original productions, a program called Business First AM that gets syndicated to local broadcast TV stations, has just by itself has enjoyed a viewing surge of 77%.
CTV has quite quickly secured its place in the mainstream of the TV business, according to Sean Doherty, CEO of Wurl. Doherty’s perspective is shaped by Wurl’s delivery of CTV content (including managing ad operations) for hundreds of studios and networks to CTV platforms such as Roku, Pluto TV, Xumo, Tubi TV and many more.
Wurl began delivering its first CTV content from a single customer, Jukin Media, to a single source, Twitch TV, less than 18 months ago. In the 1st quarter of 2020 alone Wurl launched a total of 97 new CTV channels, representing an 83% growth rate over Q1 2019, and bringing Wurl’s total channel lineup total to over 400. This is no indie, niche-filled world. Wurl’s content customers include established media brands such as A+E, AMC, Bloomberg Media, and Endemol Shine Group. And CTV content producers and distributors are growing globally, with Wurl supporting new channels in Russia, Brazil and Asia as well as in the U.S. Doherty points out that the variety of categories of content continues to expand almost exponentially, as programmers are not constrained by multichannel video’s bandwidth constraints. And you don’t need original hits to drive traffic. As Tubi’s Rotblat points out, at least anecdotally, plenty of old cartoons and sitcoms work quite well as quarantine comfort food.
As the content infrastructure has expanded rapidly, so too has the accompanying advertising business. Each of the executives I spoke with noted not just the growth in advertising dollars but the shift in the character of the advertisers. Wurl’s Doherty told me that a short time ago he mostly saw CTV ads from direct to consumer companies (think of Casper and Blue Apron) and a few movie studios, but now sees far more widespread and mainstream large-scale marketers in categories such as retail and consumer goods. Tubi’s Rotblat pointed out that the uneven post-quarantine business openings across the U.S. are leading some major advertisers such as fast food restaurants to use CTV to deliver their previously nationally-focused messages in a much more geographically-targeted fashion.
In terms of the advertising infrastructure, all of the CTV execs I spoke with noted that Demand-Side Platforms, ever on the prowl for new advertising inventory on which to run their clients’ ads, are increasingly discovering and buying CTV. The more institutionalized this CTV buying becomes, the greater likelihood it becomes a part of the permanent marketing fabric.
As to where things go from here, that’s pretty hard to say about anything right now, isn’t it? But clearly, as all of the players I spoke to have seen, the CTV technological infrastructure seems to have handled its rapid rise in activity pretty flawlessly, delivering customer-ready content and large-scale audiences and data to entice even the most hide-bound segments of the media world.
Remember when the traditional TV world warned that you could never deliver massive amounts of simultaneous viewing through the internet? That the issues of poor video quality through latency would not meet consumer expectations, and poor ad delivery rates would doom that part of the business model? Well those questions seem to have been asked and answered. As Frank Costanza (via the late Jerry Stiller) might say: “So CTV non-believers, you want a piece of me?”
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