Sponsored by Yospace, the research focuses on the US TV market, particularly on the dramatic changes and transformations it has experienced since the early 2000s and how to address them.

Because viewing has become more widely distributed, particularly across connected platforms, devices and on the many proliferating on-demand services, broadcasters are faced with intense competition for audience and advertising budgets. As audience behaviour has changed, competition between broadcasters has also intensified; the US alone has seen unprecedented growth of investment in scripted entertainment — with 488 shows in production in 2016, up 6% from the previous year.

Hence, with major internet businesses increased investment in content and moving onto TV screens (offering advanced and data driven advertising solutions) US broadcasters and MVPDs need to adapt efficiently and fast. The research effectively analyses how and why broadcasters should react to the many developments and how to anticipate the industry’s requirements to stay ahead of the curve. 

The report shows a significant portion of younger audiences are moving away from traditional TV, instead consuming on-demand and multi-platform content, compared to their older counterparts.  Already 20% of US adults aged 18-34 are watching TV less than once a week. A US cable operator commented: “The new generation is watching content differently. They’re consuming video where and when they want it. We need to adjust, but there are so many things happening that we have to be very careful.”

Nonetheless, the report reveals that US television executives are bullish about the prospects for live and linear channels, despite the intensifying competition for audiences and ad spend. Because live and linear TV are particularly unique by their offerings of mass and concurrent audiences and sizeable online market fragments, the value of their reach is not only growing, but also delivering “immense value” like never before. One US Broadcaster noted, “The only way to remain socially relevant is to be live. A live viewer will be tweeting about it, and telling their friends the next day. That’s hugely valuable to broadcasters because it creates an affinity for their channel — and it’s valuable to advertisers.”

The value that advertisers place on live content is already apparent in the prices paid for spots around premium sports and participation reality, which exceed other types of content by a significant margin. The high value of these genres is driven by viewers' live consumption, which allows advertisers to simultaneously reach a larger and engaged audience.

The study concludes by emphasizing the importance of broadcasters investing in advanced TV advertising (ATVA) technology. The report emphasizes that today broadcasters must compete for viewers in an increasingly fragmented media landscape and a growing threat from alternative forms of video advertising. Over the past three years, advertiser spend on digital video has increased by 59% p.a. to almost $12bn, spread across online video platforms and social networks. Major internet media companies are also starting to encroach on territory that has traditionally been dominated by broadcasters. Most importantly, these new digital competitors are able to offer advertisers a degree of targeting and measurement that is not yet available at scale on TV.

The study also highlights how the wider development of ATVA capabilities on TV platforms will require broadcasters and MVPDs to strike partnerships and commercial agreements to bring data and inventory together — partnerships which have previously shown to be notoriously challenging. Despite the challenge, many in the industry recognize the need to move quickly in combating this threat to premium content rights.

The report highlighted four key priorities to be embraced:

1. Enhance the linear consumer experience with fewer — but more relevant — TV ads.
2. Apply data and addressable solutions to linear streams, to maximize the value of the inventory delivered with IP-based services.
3. Collaborate, where appropriate, to provide cross-publisher solutions to advertisers, reducing market fragmentation.
4. Work with MVPDs to enable the roll out of ATVA solutions on TV platforms, across a wider range of inventory.

Mindful of these opportunities, the US TV industry is investing heavily in the development and deployment of ATVA capabilities to supercharge their inventory and boost their ad revenues. Even so, these initiatives are seen as but the first steps in a longer journey. For example, the most advanced ATVA solutions are frequently restricted to broadcasters’ and MVPDs' IP-delivered services. Many current industry initiatives focus more on unified planning and measurement as opposed to buying.

As ATVA deployments are becoming more widespread, fragmentation and coordination have emerged as key challenges in three areas: firstly, different categories of linear inventory managed by broadcasters; secondly, MVPD and broadcaster control of audience data and ad sales; and thirdly, the proliferation of industry initiatives with differing memberships and objectives.

Given the obvious benefits to be unlocked, many executives believe that there is a strong imperative for broadcasters to develop ATVA solutions for their IP streaming services as a priority, and seek ways of cooperating as an industry to overcome these challenges to their wider deployment. This is partially being driven by the shared realization amongst them that, unless they move quickly, broadcasters and MVPDs risk being outmaneuvered in this space by the major internet companies.

For broadcasters and MVPDs, there are four priorities:

• 1.Enhance the linear consumer experience with fewer, more relevant TV ads, to retain audiences.
• 2.Grow reach and apply data and addressable solutions to linear streams to maximize the value of the inventory delivered over IP-based services.
• 3.Collaborate, where appropriate, to provide cross-publisher solutions to advertisers, reducing market fragmentation and growing scale.
• 4.Work with MVPDs to enable the roll out of ATVA solutions on TV platforms, across a wider range of inventory.

The report suggests a path the broadcast industry can use to begin adopting common technologies and standards to realize the full potential of addressable TV.