The WIR: Digital Drives Channel 4 Revenue Growth, Facebook Settles Over Video Metrics Misreporting, and Netflix and Amazon Dominate EU SVOD Subscriptions


In this week’s Week in Review: Channel 4 posts healthy annual revenues bolstered by All4, Facebook settles with advertisers over its misreporting of video metrics, and a new report claims Amazon and Netflix make up 80 percent of SVOD subscriptions in the EU. To receive an update on the industry’s top stories every Friday, sign up to the weekly Video Round-Up.

Top Stories

Channel 4’s Revenues Rise, but TV Ad Sales Fall
Channel 4’s total revenues reached £975 million in 2018, up 1.6 percent from £960 million in 2017, according to the company’s full year report released this week. Digital revenues continue to grow, rising eleven percent to £138 million, thanks to a strong year for the broadcaster’s digital streaming service All 4. “All 4’s success reflects the mixture of expert curation, increased demand for catch-up programming from our strong linear schedule and the success of our large collection of archive and exclusive box-sets,” said Channel 4 CEO Alex Mahon. “We also invested heavily in improving the All 4 user experience, which has helped it grow in usage and frequency.” But while digital revenues were strong, TV advertising and sponsorship revenues were down at £791 million, £7 million lower than in 2017.

Facebook Reaches Settlement Over Video Ad Metrics Errors
Facebook has agreed a settlement with a group of advertisers which sued the company over misreporting of video metrics on the social network, though the terms of the settlement have not been disclosed. Back in 2016 Facebook revealed it had accidentally inflated viewing figures for video content on its site, which advertisers complained had led them to invest more than they would have done in Facebook content. The lawsuit had contended that Facebook had known about the misreporting earlier than it had let on, a claim which Facebook disputes, but it seems the company would rather bring the case to a close than continue with the costly legal process.

Netflix and Amazon Make Up 80 Percent of EU SVOD Subscriptions
A new report from the European Audiovisual Observatory this week outlined Netflix and Amazon’s joint dominance of the European subscription video on-demand (SVOD) market, finding that the two account for 80 percent of SVOD subscriptions in the EU. The report also found that cord-cutting is not taking place across the board in Europe, being very specific to national markets, and that while “cord-cutting is one of the pay AV services market realities in Europe, [it’s not] the only one. It is not ubiquitous since it depends on the national market conditions of a highly diverse European pay AV services landscape.” Overall across Europe, pay TV represented 90 percent of the pay AV services market in 2017, with SVOD the remaining ten percent, according to the study.

The Week in Tech

Google’s DV360 Begins Selling Linear TV
Google’s DV360 demand-side platform (DSP) has begun selling linear TV inventory for the first time, according to AdExchanger. Google launched the capability via a partnership with ad tech company WideOrbit, though for now its still in beta-testing, according to the report. However a self-serve version for general release is expected later this year, and after that Google is apparently looking to add more linear TV inventory to its DSP, with Clypd one potential partner.

Xandr Launches New Demand-Side Platform ‘Xandr Invest’
US telco AT&T’s advanced advertising division Xandr on Monday announced the launch of a new demand-side platform (DSP), ‘Xandr Invest’. Xandr already owns a DSP through AT&T’s acquisition of AppNexus last year, and the new offering is built of AppNexus’ buy-side tech. But the company says the new platform is more future-focussed, with a heavy emphasis on the converged buying of digital and TV inventory. Read the full story on VAN.

Simulmedia Closes $29 Million Investment Round
TV ad tech company Simulmedia this week announced it has closed a $29 million Series E investment round, led by existing investor Union Square Ventures. All of the company’s other existing institutional investors are also participating. Founder and CEO Dave Morgan also announced that former Turner Broadcasting president David Levy has rejoined the board of directors as an independent director. “It’s no accident that these moves coincide with significant and positive market developments,” said Morgan. “In the six or so months since we announced the unbundling of our targeted TV media offering into a transparent, software-driven, national TV ad marketplace that operates across all of the largest national TV programmers and broadcasters, we have seen our revenue double, year-over-year, and our profit grow significantly. ”

Google Shakes Up Lobbying Organisation Ahead of Government Scrutiny
Google has axed roughly six of its largest lobbying firms as it prepares for increased scrutiny of its business, according to a WSJ report. The companies which have been cut off account for around half of Google’s total annual lobbying bill, according to the report. Google has also reportedly restructured its Washington policy team and gotten rid of two senior officials who helped build its lobbying structure, as part of a shake up which comes as the Justice Department is rumoured to be preparing to open an antitrust investigation into the search giant.

Hudson MX Announces Launch of Local TV Media Buying Platform
Media executive JT Batson this week announced his new company, Hudson MX, a local TV media buying platform. The company says its BuyerAssist product launched in closed beta last year, and claims that buys have been completed for nearly three hundred advertisers in 210 markets. “Our early success demonstrates that agencies are committed to investing in software that positions their buyers for the future of local TV,” said Batson, CEO of the new company. “Our strong agency relationships and customisable technology allowed us to quickly and quietly gain an industry foothold in the months since the product was introduced.” Jay Stevens, a familiar figure in European media, serves as the new company’s president.

Verizon Media Launches Insights and Forecast Tool for its DSP
Verizon Media this week announced a new omnichannel insights tool for its demand side platform (DSP). Verizon says the the new tool is designed to give advertisers clarity on their omnichannel programmatic ecosystem, with performance insights and optimisation recommendations for each channel, ad format and exchange. “With today’s announcement, we are continuing to take a leadership role, bringing our DSP customers granular omnichannel intelligence at the auction level, giving them everything they need to understand how and where to best allocate budgets,” said Iván Markman, chief business officer at Verizon Media.

CTV and App Fraud up 120 Percent says DoubleVerify
Between May 2018 and April 2019, the number of fraudulent connected TV (CTV) and mobile apps grew by 120 percent, according to DoubleVerify’s Global Insights Report released this week. The study also found that the incident rate for mobile app brand safety incidents grew by 194 percent in the same period. “Brand safety, fraud and viewability continue to be top-of-mind for advertisers, and with good reason,” said Wayne Gattinella, CEO of DoubleVerify. “Headlines buzz with stories about brands appearing beside fake or objectionable content, and emerging fraud schemes. The stakes are high as advertisers rightfully demand clarity and confidence into the quality and performance of their digital investment.”

Wibbitz Launches New API Product Lightbox
Automated video creation company Wibbitz this week announced the launch of Lightbox, an API product which it says brings video creation capabilities to any website or application. Wibbtiz says that enterprises can use Lightbox to build a fully customised interface that fits natively into the environment of their choice including product pages, profile pages, social media platforms and video advertising platforms.

The Week in TV

Mediaset to Create Dutch Holding Group
Italian broadcaster Mediaset’s ambitions to create a pan-European media and entertainment bore more fruit this week as it announced plans to create a new Netherlands-based holding group, which will tie up its Italian and Spanish businesses. Under the new group, MediaForEurope, Mediset says its businesses will have the scale to compete with the big global players, and says it is looking at expansion into other European markets too.

Ofcom Gives Provisional Go-Ahead to iPlayer Changes
British regulator Ofcom has given provisional approval to proposed changes by the BBC for its iPlayer service, which would see content available for 12 months after first broadcast, rather than the current 30 day limit. Ofcom said the changes “would pose challenges for other public service broadcasters’ video-on-demand services,” but they are justified since they “could increase choice and availability of public-service broadcast content and help ensure the BBC remains relevant in the face of changing viewing habits”. A final decision is expected in August.

Disney Will Top 130 Million Streaming Subscribers in Five Years says Morgan Stanley Analyst
Disney’s streaming services, including the upcoming Disney+, could attract more than 130 million subscribers by 2024, according to Morgan Stanley analyst Benjamin Swinburne. Swinburne, in a note to investors, said that on the low end, Disney+ by itself should gain 60-90 million subscribers within five years. Even with these conservative numbers, the business could still be turning a profit within that window according to Swinburne.

Fox Joins Project OAR
US addressable TV advertising consortium Project OAR this week announced that Fox Corporation has joined the initiative. Fox will serve as a member of the primary steering committee alongside the likes of Disney Media Networks, Warner Media, NBCUniversal and AMC Networks, which aims to “create a standard by which all parties in the TV ecosystem can collaborate and unite on addressable advertising.” “We believe that this consortium, which benefits from both sell-side and buy-side support, will help drive adoption across the industry and enable us to execute at scale,” said Fox Corp’s VP of audience and automated sales Dan Callahan.

Project OAR also announced the launch of an ‘Agency Advisory Committee’, which will give buy-side insight into the issues facing the addressable TV ad market. Publicis Media, Omnicom Media Group, Group M, IPG/Magna, Dentsu Aegis Network , Havas and Horizon Media have all signed up to participate.

WarnerMedia Considers $16 Per Month Ad-Free Subscription for Upcoming OTT Service
WarnerMedia is considering offering ad-free access to its upcoming streaming service for a monthly price of $16-17, according to a WSJ report this week, moving away from its previously planned strategy of three separate subscription tiers. The subscription would give access to content from HBO, Cinemax and Warner Bros, as well as original content, but the rumoured price would only be slightly higher than HBO’s current standalone streaming package, which sells for $14.99 per month. The company is also considering rolling out a cheaper, ad-supported tier, though this would debut later (some time in 2020) according to the report.

BT Reportedly in Talks to Join Britbox
BT is in talks to join Britbox, a streaming service set to be launched in the UK by ITV and the BBC, according to a report in The Telegraph. The telco is said to be interested in becoming a shareholder in Britbox, and would help fund original content for the service, though talks are still apparently at an early stage.

The Week in Publishing

Facebook Claims 140 Million Daily Active Users on Watch
Facebook this week gave fresh insight into the performance of its video hub Facebook Watch, which rolled out globally last August, claiming that over 140 million people now watch at least one minute of content on Watch per day. Facebook also said over 720 million users spend at least one minute in Watch each month, and that on average, daily visitors spend more than 26 minutes in Watch each day. Alongside these numbers Facebook also announced several new content partnerships for Watch, with ProSiebenSat.1 among those signed up to produce shows for the service.

The social media giant says the Watch is becoming increasingly lucrative for its creators too, saying that the number of Pages earning over $1,000 per month has increased by 8x over the past year, and the number earning over $10,000 has increased by 3x (though without knowing the figures behind these increases, it’s difficult to read too much into them).

KKR Moves to Buy Out Axel Springer Minority Shareholders
Global investment company KKR this week agreed a deal with German media company Axel Springer to buy out its minority shareholders, offering €63 per share in cash. The deal would value Springer at around €6.8 billion, and could see KKR take as much as a 44.8 percent share in the company depending on how many minority shareholders accept KKR’s offer. Axel Springer’s CEO Mathias Döpfner said the deal would give his company room for more organic investments and acquisitions.

Google Made $4.7 Billion from News Industry Last Year Claims News Media Alliance
Google made nearly $5 billion in revenues from crawling and scraping news publishers’ content, without paying publishers for that use, according to a study released by the News Media Alliance this week. The study also said that this figure was conservative, saying its hard to measure the full value of how news helps Google develop its products and entrench its dominant position. However the results were later called into question by Mathew Ingram of the Columbia Journalism Review among others, due to the to how the figure was reached. The NMA used information from 2008 about the percentage of Google’s overall revenues which came from news, and then scaled it up in proportion to Google’s current revenues, further inflating it to account for the introduction of Google News.

The Week for Agencies

GroupM Forecasts 3.4 Percent Ad Industry Growth in 2019
Global advertising will grow by 3.4 percent this year, and by around six percent next year, according to GroupM’s ‘This Year, Next Year’ report released this week. Digital will unsurprisingly continue to grow rapidly, accounting for 50 percent of the world’s advertising spending in 2020, but GroupM says there are signs of deceleration. “While the economic foundations supporting the advertising industry are somewhat fragile at this time, growth trends are holding up for now,” said Brian Wieser, global president of business intelligence at GroupM.

The Conscious Advertising Network Officially Launches
Wednesday saw the official launch of the Conscious Advertising Network, “a voluntary coalition of brands, agencies, tech providers, and also NGOs and interest groups, who have all grouped around this idea that the ethics needs to catch up with the technology of modern advertising,” in the words of co-chair Harriet Kingaby. The initiative aims to get brands to sign up to six manifestos around diversity, hate speech, consent, fake news, children’s welfare and ad fraud, in order to spur change from publishers, platforms and tech providers.

Unilever Invests in Influencer Platform CreatorIQ
Unilever took part in a $12 million funding round for influencer marketing platform CreatorIQ, it was announced this week. “The entire digital advertising ecosystem understands the important role creators are playing in advertising and brand building; the industry needs forward-thinking companies to address issues like data transparency and fraud,” said Vasiliki Petrou, EVP and group CEO at Unilever Prestige. “CreatorIQ is proactively developing solutions that empower Unilever to continue to set global measurement standards for the influencer marketing industry. Their platform enhances the quality and integrity of our brands’ campaigns by safeguarding against follower fraud and brand safety issues.”

Hires of the Week

Hearst Makes New Hires for Video Team
Hearst has made two new hires for its video production Hearst Originals team. Zuri Rice, previously of Viacom, joins as SVP and head of video development and content strategy, and Todd Joyce, previously of Defy Media, joins as VP of video sales.

S4 Capital Hires ex-WPP Execs
S4 Capital announced two ex-WPP hires this week, bringing in Scott Spirit as chief growth officer, and Elizabeth Buchanan as a non-executive director.

This Week on VAN

Xandr Launches New Demand-Side Platform ‘Xandr Invest’, read more on VAN

Are We Winning the War on Ad Fraud? read more on VAN

Evidence-Based Creative and the Mysterious Case of the Iridescent Birds, read more on VAN

How the Conscious Advertising Network Wants to Bring Advertising’s Ethics In Line with its Tech, read more on VAN

Ad of the Week

Pepsi MAX, No Can Left Behind, BBDO


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