Mobile Fix — May 17
This week in New York sees the upfronts for the US TV ad business. And despite all the cord cutting and the declining, ageing audience, all the big brands show up and will commit around $20bn. Why? As the New York Times puts it;
The article is a good summary of the various issues we cover here each week. And it makes the point of the crucial importance of Sports. The FT on the same topic says;
This highlights one of the key factors in the imminent streaming wars; over two thirds of Disney investment in content this year is for sports. Their ESPN service is a huge advantage over Netflix. With that love of crowds, we think sports will be a big part of the ad supported element of Disney.
Variety also argue that TV isn’t dead, yet, pointing out that the lower audiences are paradoxically driving higher rates for some inventory, as scarcity makes advertisers rush to secure what they can.
Disney also — as expected — agreed to buy the outstanding 30% share of Hulu from Comcast — but not pay for 5 years. The deal gives Disney full control now and guarantees Comcast at least $27.5bn, but they get more if the company value increases. In the meantime Disney will pay for Hulu content but Hulu can withdraw it after the deal closes — more balkanisation of TV
As the players in TV fight for eyeballs (and subscribers) the nature of the content is changing fast. Binging is now mainstream — seemingly the BBC are so keen to enable binge watching of Killing Eve it declined the chance to show weekly episodes of the new series as BBC America is doing right now.
We have seen dramas move away from the standard 6 or 13 episodes and the 7 minute narrative arcs to fit around the ad breaks are not needed — right now — on Netflix or Amazon. The length of shows is changing too; movies seem to be getting longer — 3 hours for EndGame — and new short shows are popping up. Netflix has two shows with 15 minutes episodes and Quibi — the new service from Jeffrey Katzenberg — is all about snackable shows. The Guardian looks at some of these new shows. Again Mobile is reshaping things.
The Apple TV app has launched and we get a sense of where Apple plan to take this. It is available in over 100 countries and offers a selection of channels like HBO and Showtime with direct subscriptions. You can still buy them through the channels own Apps but they don’t have the standard Apple menu and payment UI. Services outside of the Apple ecosystem, like Hulu and Amazon Prime, are bought through their own apps. With support for a wide selection of TVs and devices Apple hope to own AppTV but until they add their own Apple+ content (due later this year) we expect uptake to be slow.
Apple hope to earn good money from their cut of these subscriptions (rumoured to be between 15% and 30%). But running an App store can be seen as a monopoly and in the US regulators are allowing an antitrust case against Apple. This is different to the European regulator looking at the claim from Spotify that Apple abuses their appstore to favour Apple Music.
But it’s still all about the content and this interview with Ted Sarandos of Netflix gets over his love for the medium
This week Google Marketing Live took place — essentially a version of their developers events — think last weeks Google IO — but just for marketers. Loads of interesting stuff — including 10 new marketing products. The full agenda here has links to videos of most of the sessions, so worth digging around for your particular interests. For a good summary read this blog post by Google on the new consumer journey. It’s all about Mobile.
We have talked often about how much of the mobile ad experience is a derivative of desktop — across GAFA and many media properties ( banners for example) but this is clearly Mobile first.
The YouTube products will probably get most headlines; expanding their ad automation tools like Discovery ads will help brands get on YouTube without a video. Facebook have similar tools. But it’s Bumper Machine that stands out; using Machine Learning to take existing video ads and develop a 6 second version. It’s a tool that many smaller brands will find helpful but we think there are better ways to unlock the potential of video.
Still on Google the implications for advertisers of the privacy update announced last week are well summarised here.
Within the content from the Google event Benedict Evans uses his end of the beginning structure to look at retail- 20 minutes in, although the first session is interesting too. Really good insightful stuff. And a great reminder that we don’t yet know who the winners will be.
Walmart increased their ecommerce sales by 37% in the first quarter of this year and are taking the fight to Amazon with new service innovations like next day delivery. The advantages of a strong footprint of physical stores is shown by the new collaboration between Amazon and Next for click and collect. Next get the footfall and Amazon reduce the friction of home delivery — we hear anecdotally that people are getting fed up of dealing with packages left at neighbours and more workplaces are discouraging delivery to the office.
A Bloomberg piece argues that the Mall is not dead as GenZ really like them, when compared with millenials and GenX. To me this is more a life stage thing — young teens have alway hung out at shopping centres ( from my days at the Arndale in Crossgates to the crowds at Westfield now). Evans talk mentions that the demise of Anchor stores at Malls — usually department stores — illuminate the weaknesses of other stores once the traffic to the Anchor falls. Which is why Apple can strike such good deals on rent for their Brand Cathedrals; the footfall they drive keeps their neighbour stores going.
In a lovely piece of irony, as old malls close in the US, Amazon is buying the land for their fulfilment centres
As Amazon set the agenda for ecommerce, competitors know what they need to do to compete — Walmart is ticking off this list one by one. And Alibaba is taking inspiration from the Amazon marketplace by enabling stores in more countries to sell through their AliExpress platform. There is huge amount of growth to come as emerging markets embrace ecommerce and different players — like Flipkart in India (owned by Walmart) — will become strong competitors.
But the smart money is on Amazon keeping its place at the head of this change. Warren Buffet — or his firm — has just investing $900m in Amazon.
This long piece on TikTok from Vine is an interesting read. They cover the Worlds first TikTok influencer agency (?) and some of the UK talent getting attention on the platform. And the brand integrations. The relaxed attitude to really young users feels like it will become a problem though.
The influence over music on TikTok is growing and the labels want paying more than agreed in the deal they struck a while back.But the power of the platform in breaking new music means the labels are reluctant to pull their talent off the app.
Old media is still doing well. The New York Times and Disney are celebrated by this piece. #ContentisKIng
Vice was the future of media once — at one point valued at over $5bn. Disney have announced they have written down their $353m stake.
Provocative piece saying no one really understands their true customer acquisition costs. We have covered the ‘hidden’ costs in CAC before with this good piece by VC Balderton. But hard to argue with the logic of testing and learning.
US VC MathCapital is still investing in adtech. Eric spoke at our VC event last month — very smart.
Good infographic on 25 years of digital. Been there, did that.
Product placement and ads in Video games has huge potential but not often executed well. Good summary of the current situation.
Spotify are doing a great job pioneering Audio and now have their own version of Stories for artists to add content. Think sleeve notes for the streaming age.
Forrester think brands should Reimagine Mobile To Activate The Total Brand Experience. We concur.
70% of US viewers browse online whilst watching TV — and even when their favourite shows are on it only falls to 50%. Huge opportunity to use TV ads as trailers for mobile experiences
Web Smith of 2PM is a great commentator on DTC — this podcast interview is really good.
Finally — this popped up just too late for Fix last week — and is a must read analysis of modern media & digital culture — fascinating
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