Pay-TV advertising is changing, but how much?

How much has TV advertising changed?

As one of the pioneers in processing and distributing actionable linear TV viewership data, it’s incredibly exciting for TiVo to see the sea change in linear TV advertising finally occurring.

More methods of measurement, new ad inventory, connectivity to digital platforms – it’s a whole new world. Being at the forefront of this change has afforded me a unique ability to understand the last mile that many others in the industry have not had the opportunity to fully understand. I’ll be honest: I do smile when I hear those that have never configured a DAC (digital addressable controller), know what EBIF (enhanced TV binary interchange format) is, or set up a two-way conduit talk about dynamic ad insertion.

Despite all the exciting developments happening in our industry, three things need to happen in pay-tv for this evolution to continue.

We need to keep our focus on the screen

Our industry should focus our efforts on the screen. Otherwise, we will be less relevant to the value chain. We need to make sure that living room devices are the preferred source for linear content and non-linear content. Our devices must have seamless integration with traditional pay-TV and non-linear streaming providers with user-generated, personalized content supported by a robust search and recommendation engine. If the industry’s devices do not provide consumers with what they want, they will relegate us from the living room to the closet, and from the closet to the e-recycle station. We will be disintermediated and become woeful pipes.

We need to invest in next-generation content delivery

To provide the content that consumers demand, we need to invest in the next generation of content delivery. Yes, I mean IPTV (internet protocol television). We should have done it three years ago. In fact, there are lots of IPTV-as-a-service start-ups out there that can help you catch up. If you have enough scale, you’ll need to build it yourself. Otherwise, you can leverage a capable third party to provide the service. While they’re doing that, go and get rights to all the content you’re going to need to make my first point a reality. And don’t forget to become an expert at selling ad units, because the next generation of IPTV and IP-connected devices will allow for new advertisement units and inventory types.

We need to liberate our viewership data

One of the most heartbreaking things I’ve seen over the last few years is that, while we squabble among ourselves about how valuable our viewership data is and are often unwilling to federate it as an industry, ACR-based viewership data producers are working with smart TV manufacturers to create new ad units and take control of the glass themselves. Yes, all of our platforms are different. Yes, each platform from produces clickstream-based viewership data differently. That’s why it’s necessary to have a third party whose mission is to collect, cleanse, process and distribute uniform viewership data sources from each of us so that we are the enablers of the 2.0 pay-TV value chain instead of being left behind.

The choice is ours. Unless the pay-TV ecosystem invests in these capabilities, it will hit a wall and slowly decompose. It will still change, but the beneficiaries will not be the current pay-TV stakeholders. It will be the content creators, the device owners and the virtual MVPDs that will bring the new reign.

To learn more about TV viewership segments, ask TiVo.

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