Broadcasters need to rethink their business when they move online. Sometimes that means a complete rethink of how to engage viewers, and sometimes they must look back to embrace the future.
UK broadcasters make online a destination
At IBC 2017 I chaired a discussion between two of the top broadcast channels in the UK. ITV’s Faz Aftab and Channel Four’s Sarah Milton talked about the progress their companies have made in addressing the online audience.
Channel 4 recently renamed 4oD, the company’s online portal, All 4. The rebranding brought a shift in approach for the company’s online presence. 4oD’s role was in support of the linear broadcast channel, providing a means for linear viewers to catch up on missed shows. Ms. Milton says that All 4 is now a “destination with an incredible array of box sets and a growing collection of exclusive content.”
The company relies heavily on the editorial process in combination with viewer usage data to promote on-demand content within the app. The approach appears to be successful as Ms. Milton says that All 4 now drives 10% of corporate revenue.
“ITV Hub is the point where many of our strategic priorities meet to build a direct relationship with our customer.”
ITV Hub, unlike many TV portals, has remained committed to linear channel delivery. Ms. Aftab says that ITV’s brand of mass-market TV content is uniquely suited to the linear approach. To illustrate the point, she says ITV Hub has seen a 4X increase in users over the last two years and has drawn 1.3 million viewers to the digital simulcasts.
TV2 innovates with new business models
Danish broadcaster TV2 originally launched its online presence, TV 2 Play, with two packages of content. For 129 Kroner ($21) a month, the everything pack gives subscribers access to all TV 2’s shows ad-free on-demand, and they can stream the linear broadcast channels. The company also offers subscribers a basic pack, which includes all the on-demand shows ad-free for 69 Kroner a month.
The company has just introduced two new tiers of service at a significant discount if the customer is prepared to put up with limited ads. Customers can get the everything pack with medium ad load for 99 Kroner, and the basic pack with ads for 39 Kroner.
Stig Møller Christensen, TV2 sales director, sees the introduction of advertising as an opportunity for customers, advertisers, and the company:
“We launched TV 2 PLAY with advertisements after very comprehensive analysis work. We believe there is both an opportunity for us with new users who want a cheaper subscription with advertisements, and an opportunity for us with advertisers who can see the value of targeting their campaigns to specific customer segments in conjunction with quality Danish content.”
TV 2 is using targeted ads in the ad breaks during on-demand shows. The company believes these ads will provide a 50-100% CPM premium over traditional TV ads. The premium price allows the company to run fewer ads than on traditional television.
Why it matters
Broadcasters are beginning to make online portals primary destinations for the consumption of their content.
Savvy TV channel providers are innovating business models and approaches to optimize their opportunity to capture online viewers.