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Opinion Piece: Linear vs VOD; One Audience Two Mindsets

Each day it seems that we see coverage of the launch or market roll out of a new VOD service, either free to watch (AVOD/ BVOD) or subscription based (SVOD).

The last decade has seen a huge imbalance in broadcaster resource towards these services as opposed to linear. This resource has come in many forms, but the one that has surpassed any and which may not be measurable is ‘share of mind’.

Despite the universally accepted opinion that on-demand will surpass linear viewing sometime in the next decade, it is key to highlight the often over-looked role that linear can play in driving VOD success. We see this role as two-fold:

  1. As a marketing vehicle to drive subscription, consumption and retention

  2. To glean learnings from its audience engagement and navigation during its 75+ years of development

It took a long time for broadcasters to really exploit the capability of their linear portfolio. Silos often existed and gains not achieved. Whilst many of these arguments have been overcome, it has not been universally extended to using the same airwaves to market their digital services. I am pleased to state that we have had the privilege over the last year or so to work with a number of broadcasters who have realised the opportunity arising from the fact that there are very few potential customers who only watch in the non-linear world, and the over-riding fact that viewers who do watch, and enjoy content in the linear arena, are in fact the ‘low hanging fruit’ to best exploit in the VOD world.

Recognition of cross promotion from linear is the first marker to overcome; how and to what degree is the following challenge. The ‘how’ within its marketing messages can be achieved in a number of ways, however a common concern of ours is the over-dependence of purely ‘digital tagging’ of linear messages. Whilst all messaging will have a reference to ‘catch-up’ or ‘now streaming,’ we believe that to fulfil the VOD journey that we see as being one of ‘Awareness, Consideration, Conversion and Retention’, differing dedicated VOD messages are essential. Such dedicated messaging should include both brand and ‘content discovery’ activity to stress ease and benefit of service, as well as depth and range of content. Don’t just tell me what to watch/ subscribe, but why?

Probably the most important question we are often asked is to the relative degree of support that VOD should receive from linear? In essence how do I allocate my ‘on-air’ promotional support between, linear, VOD and overall portfolio brand? There is no straight forward answer, as each situation differs specifically by broadcaster. There are many factors that will help determine allocation of resource, the key one though being driven by the business model. Are revenues now and in the future, advertising based or subscription? Even within each of these two areas, there is separation; linear vs AVOD and carriage vs SVOD. If a broadcaster is unable to monetise its AVOD site as it can in linear services, then support should be lower. Similarly, what is the opportunity cost (if any) to linear advertising revenue by using resource to drive paid subscription instead. The split of resource will continue to change from launch through to maturity and it is essential to continually review what this should be.

Moving onto the second role; as to how linear can assist VOD platforms, we have seen a dearth in the knowledge transfer of using the on-screen audience engagement methods that have been so successful over time. The jury is still out as to the future split between AVOD and SVOD services and consumption, and eventually it will be the elasticity of the market that will dictate the number of services that can survive solely through subscription revenues. Whilst many markets continue to be SVOD heavy, there does appear to be an informed opinion that this will not always be the case, or certainly not in all markets. The perceived logic of the dilemma is that the paying SVOD audience will tolerate fewer ‘marketing’ messages than they will within a free AVOD world. I do believe this to be true, but not to the extent that is currently thought. Exclusiveness and quality of content will be king in the long term.

To avoid argument and distraction in this area, I will concentrate on AVOD/BVOD platforms where in almost all cases the business model demands advertising revenue – and therefore viewing levels are critical. Almost without exception, and across all markets, we see a general failing within platforms to address this. There appears to be three key reasons for this: i) a failure to recognise the opportunity, ii) the accessibility of relevant platform data to key marketing teams iii) ‘ownership’ of the platform within the organisation.

The accessibility of data is quite damning. Basic top line analyses of users, streams, viewing volumes, and content completion progress bars can help direct optimal on-platform media planning, but is often overlooked and considered to be a different ‘language’ to how we use such metrics in linear. Perhaps this failing is a consequence of the two other points I detailed. Too often the marketing departments responsible for linear are either ill-informed of platform capability and opportunity, or often, excluded from decisions made as to ‘marketing real estate’ on the platform. Decision making tends to be the domain of siloed platform controllers or the advertising sales teams. This can lead to paranoia that anything other than commercials will ‘clutter’ the viewing stream and lead to audience drop off and usership. Such an attitude shows contempt for audiences who are not only used to such messaging, but actively need them to shape their viewing decision making – a benefit to both audience and the platform. A guaranteed volume of marketing real estate within an agreed fixed break pattern across content can be of mutual benefits to all parts of the business. If concerns exist, then the granular data that VOD can offer can be applied to on-platform testing to ensure optimality.

Whereas, in the point above I was primarily referencing on-screen platform promotion, the very same criticism can be applied to a lack of further marketing assets that are commonplace, and proven over time in the linear streams. Generically described as secondary events; ‘Lower Thirds/ IPPs/ Elevators,’ ‘End Credit Squeezes/ Squeeze Backs,’ ‘Voice Continuity’ and ‘Bugs,’ can all fulfil the same positive role on digital platforms as they do within linear.

In summary, the last decade has been one of infrastructure build, NOW is the time for the focus to change to a customer focus approach, a key part of which is on- platform communication capability with audiences, beyond the current simple recommendation engine approach which has simply not addressed the needs of audiences, and subsequently likely to have undermined business revenues. The consumer needs to know why they should visit, how to get there, and maybe above all to have an enjoyable experience giving them a reason to return.

There are ways to achieve this.

Alan James, January 2022

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