TV in 2017 saw one undeniable blockbuster event - Fox buying Disney - and a series of other moves which, while lacking this level of box office appeal, did hint at an industry starting to mature. NBCUniversal is committing $1bn in addressable TV inventory, and Turner, Fox and Viacom’s Open AP venture spring to mind. What will 2018 bring? We’ve consulted our crystal ball, and here’s what we think.
1) A significant competitor to Nielsen will emerge.
With $1Bn spent on addressable advertising during 2017, the need for an alternative currency that can measure not only linear, DVR, and OTT, but also addressable advertising has never been more significant. At the same time, the amount of census-based TV data has been exploding, and we expect 2018 to be the inflection point where dollars start shifting from Nielsen to other datasets. In particular, the the combination of Smart TV data and set-top-box data should provide a uniquely powerful dataset that is nationally representative, richer, and more granular than Nielsen.
2) Netflix will introduce advertising.
Netflix has been producing excellent shows and is growing its international footprint but still doesn't have the level of profitability it needs to become sustainable. As other media publishers commit to multiplatform, we expect a lot more streaming-first shows, and this is going to ramp up the pressure on Netflix' subscription fees. As limited advertising in streaming becomes the norm, we think it's inevitable that Netflix will follow suit.
3) Data providers will go up-market.
Most data providers have been providing raw data data sushi and as the market evolves, we expect data providers to start building services on top of the data and providing full-service solutions rather than raw data.
4) Smart TV data will start to disrupt the European ecosystem.
European Smart TVs are already equipped with automatic content recognition, and we expect this service to be switched on over the next few months pushing a massive new dataset into the market.
This data will challenge the dominance of industry joint ventures (Barb, AGF, SKO) and walled garden OTT measurement. The lack of data in the European ecosystem has hampered the development of next-generation advertising models from retargeting from TV to mobile to attributing conversion from a cross-platform buy that includes TV.
A few of the Pay TV platforms - notably Sky - have dipped their toes in the water with set-top-box data but they’ve only really used its data for their internal purposes and advertising sales.
We expect this to change in 2018 as Smart TV data begins to become available in European markets. Smart TV data has already disrupted the US market creating whole new categories of advertising products that are not tied to platform providers, and we expect these to thrive in Europe.
6) GDPR will bite at least one streaming video provider.
The new General Data Protection Regulations (GDPR) arrive in May 2018 and require all streaming video providers to re-work not only their terms-and-conditions but also much of their processing pipelines for consumer data. We’ve already started working with some providers to upgrade their platforms so allow users to erase or update their data history in a fully transparent way - across ALL of their data platforms.
Most providers underestimate what’s required, and we expect substantial fines to come to players in the industry who have not prepared sufficiently.