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Islands in the stream: Generation Media on the future of content viewing

With the promise of a bold new future of streaming content at the hands of 5G network on the horizon, and a raft of newcomers including Disney+ threatening to dig into the content distribution pie; weighing up the linear TV and SVOD debate is more important than ever. Luckily, Generation Media’s director of AV investment, Jonathan Chambers is here to guide us all along our journey down the stream.

It’s a topic we cover regularly with Generation Media’s monthly columns in ToyNews, could you talk us through the evolution of content and how it is being consumed by kids and families today?

The rise of 4G in the UK provided the infrastructure to watch video content on the go, and as a result diversified the number of devices we use to watch content. This facilitated the creation of the On Demand viewing culture we find prevalent today as streaming and downloading content is more efficient when not tied to a linear feed.

VOD services which adapted to this cultural shift early, primarily Netflix, have successfully promoted Binge Watching as a preferable alternative to traditional linear patterns to quickly gain market share before the market inevitably becomes flooded with alternatives. This behaviour really taps into children’s desire to immerse themselves in the world of their favourite characters for extended periods compared to the short stints offered by broadcast schedules.

Giraffe Insights’ Kids and the Screen research has charted the significant increase in Children’s usage of SVOD (Subscription VOD) services (Netflix, Amazon Prime), with some age groups spending as much time with Netflix as they do YouTube despite it being behind a paywall. The importance of children to the financial success of SVOD cannot be understated – whilst it might be the parent who signs up to check out the latest season of Stranger Things, it is the longevity of children’s usage which ensures the subscription isn’t cancelled once Stranger Things has been finished.

Therefore it is no surprise that Netflix recently announced it will be investing in new children’s content, primarily in partnership with Netflix, including titles such as Dreamworks Dragons Rescue Riders, Go, Dog. Go and Emily’s Wonder Lab, and more.

How do TV viewing and SVOD/ streaming compare today? How will this continue to evolve – given the upcoming launch of new platforms, like Disney +?

While digital native companies have led the way in this sector in recent years, traditional broadcasters have been slow to create the infrastructure to provide rival services. This will change in the next two to three years however, led by the launch of Disney+, as content creators look to ring fence their properties and maximise their profits going forwards.

For example, Disney will likely eventually remove all of their owned content from other platforms over the next five to 10 years (starting with movie content on Netflix). While this might not seem like a huge blow to a company in Netflix which reportedly spent over $12bn in 2018, when you assess the appeal of Disney owned content it’s easy to see Netflix’s market share being eroded (although it will likely remain market leader for the foreseeable).

It is easy to forget after all that the Disney stable now contains Marvel, Star Wars, Pixar, The Simpsons, Grey’s Anatomy plus all of the original Disney creations. Whether it eats into Netflix’s share of viewing, or that of linear TV, could be determined by cost.

Are viewers likely to add another SVOD service to their monthly bills, or choose one to replace another? How long is it until this market comes full circle with the launch of a platform (akin to Sky or Virgin Media) which collates all of the different platforms into a single service?

Despite all of the above however, linear TV is still central to the viewing behaviour of children of all ages. Firstly from a device perspective it is the clear favourite for two to nine year olds, with Giraffe Insights reporting that 72 per cent of all viewing occasions (regardless of platform) occur on the TV set.

When it comes to what they are watching on the TV set, it is undeniable that linear viewing is under pressure (CH4- 15 impacts on the kids commercial channels fell -20 per cent YoY Jan-Jun). However, historically it has been so dominant that even after three years of consecutive double digit YoY decline, it is still the single largest source of children’s viewing. In fact, there are actually more children aged four to nine watching TV than ever before owing to the enlarged population – the problem is they are watching for shorter periods of time, with the average weekly viewing hours having halved over the past 10 years.

Netflix is notoriously clandestine when it comes to its viewing figures, but has detailed a record setting 18 million viewers for Stranger Things recently – how is this indicative of the kind of numbers streaming services are pulling in? How can company’s best leverage the apparent audience shifts when it comes to marketing?

In a data rich and driven marketing industry, the reluctance of SVOD platforms to reveal viewing figures is increasingly frustrating. This is why it’s important to look to studies like Kids and the Screen which tracks the development of these services, and demonstrates that Netflix is the third largest platform for children’s viewing behind Linear TV and YouTube. This would make Netflix (and increasingly Amazon Prime) very attractive propositions for marketers, were they to carry advertising.

While this is not the case, this does not mean they should be treated in isolation to paid for media strategies. Increasingly marketing strategies incorporate content, which is why it is important as an agency we continue to maintain and grow our relationships with both traditional broadcasters and SVOD services alike.

As audiences continue to migrate towards Netflix et al, we are best placed to negotiate placement of content to enhance paid for media strategies.

What would be the best approach to marketing to children amid today’s content viewing landscape? Does linear still have a place, how should companies be incorporating this or looking at viewership more holistically today?

Ask a child today what their favourite TV programme is you might as readily hear them claim it to be Netflix exclusive Trollhunters: Tales of Arcadia as you will Horrid Henry. This is important, because children do not differentiate between platforms (Linear/BVOD/SVOD/etc.) the same way we do in the industry. We need to rethink how we define our strategies, focusing on a holistic video approach as opposed to TV/YouTube/VOD/etc. working in isolation.

This does not mean, however, that every video campaign should incorporate all aspects of the media mix. Strategies still need to be concentrated on media channels which off er the greatest value within the confines of the budget, and therefore a hierarchy of choice still exists.

TV remains the lowest cost means of reaching mass audiences in the shortest period of time, and importantly is the most commercially accessible (and also acceptable from a viewer’s perspective). The dominance of TV from a commercial perspective is of course being eroded primarily by YouTube, but it is not in a position to yet challenge as the number one choice, while VOD channels remain valuable extensions but only if campaigns budgets allow.

While the hierarchy (in the most part) is relatively clear for the time being, we cannot assign values to how much of each should be used. This is because every product has its own unique set of variables which will affect the decisions made in arriving at the correct media channel mix.

We developed The Media Aggregator to help answer this question. A proprietary planning tool assessing each campaign brief on its own merits versus the media landscape before returning a unique media channel split.

What do you think the future holds for toy TV/platform advertising?

4G created greater accessibility to video content, and in turn changed how viewers of all ages consumed content by ushering in the era of binge watching. 5G, once fully integrated, could provide a similar shift. At the very least it will lead to quicker loading times when streaming and interacting with content, which opens up lots of opportunity for advertisers.

For example, one of the biggest reasons digital clicks do not convert to site visits and therefore sales is site load times. 5G should eradicate this problem. Going one step beyond, could we even see functional shopping windows appearing within content, making the consumer experience that much more seamless?

Predicting the nature of the changes may be challenging, however aligning yourself with partner companies that understand and embrace technology at their heart will ensure a competitive advantage.

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