Connected TV upsurge presses need for content owners to hasten business model change

Editor | 12-07-2012

To ensure future success, content providers must embrace delivery to connected devices and accept the challenge of overcoming a number of monetisation hurdles, a new survey by Videoplaza is suggesting.
The ad management platform provider states firmly that TV advertising is “here to stay”, but growth in many markets—which research firm IHS Screen Digest calculates at 1.4% on average in Western Europe and 2.5% in the US—over the next five years necessitates diversification of the traditional ad model.

Indeed it stresses that as an increasing array of connected devices is shaping the IP-delivered video landscape, broadcasters must advance their IP-delivered video advertising strategies to ensure sustainable growth in the monetisation of their content.
Videoplaza notes that if personal devices such as smartphones are taken into account, there are already more connected devices than PC or TV households in developed markets, a dynamic that requires media owners to develop services which can be accessed via these devices or risk missing out on growth, and losing ground to competitors.
Moreover, Videoplaza asserts that the surge in connected devices is leading to a double fragmentation for media owners – a horizontal fragmentation of their aggregate audience across devices, and a vertical fragmentation of individual consumption – split across individuals’ device portfolio. This, the company suggests ultimately affects delivery cost and ability to monetise an audience reach scattered across devices.
In a call to action, Videoplaza urges the connected device community to forge itself into a cohesive ecosystem, both from a reach and monetisation perspective. It stresses that “re-uniting” the audience fragmented across connected devices and restoring the associated advertising reach through a device-agnostic approach is imperative if the new IP-delivered TV is to become a viable alternative platform for large-scale brand advertising.
Furthermore, to take full advantage of this opportunity, Videoplaza suggests that broadcasters are well advised to partner with players which can offer them data-driven answers to the questions which surround device advertising consumption, so that they can focus resources and innovation on what sets them apart in an increasingly competitive world: quality content.