“Now, at cocktail parties, I can say I’m in tech,” joked actress Mindy Kaling, taking the stage at Hulu’s Digital Content NewFronts presentation. There was a grain of truth in that assessment, since Hulu remains a streaming service online, but the introduction of its new slate of content to advertisers looked a lot more like a broadcast network’s presentation of the coming TV season.
The NewFronts, the annual marketplace where online platforms present their wares to media buyers, has matured into an agenda-setter of the industry. This year, the new technology of virtual reality (VR), a drive to leverage audience data, and a firmer focus on content integration with brands were among the themes that dominated two weeks of presentations by media companies.
The online video environment is reaching the stage of development cable was in when it overtook broadcast TV at the end of the last century, several speakers said. Not coincidentally, many companies announced new live-streaming video channels and programs virtually identical to TV fare and many of them ad-supported.
“We’re going to fuse the best of live television and on-demand,” said Hulu CEO Mike Hopkins. The streaming service announced plans to expand its live streams in 2017 and formed partnerships with Millward Brown and Nielsen to deliver audience numbers to advertisers in order to enable counting over-the-top (OTT) audiences across all streaming devices, such as Roku and Apple TV.
Hulu CEO Mike Hopkins
Many speakers noted a new emphasis on data, not only counting audiences but segmenting them and gaining insights to further develop more engaging programming.
“Data is the oil for this economy,” said AOL CEO Tim Armstrong.
It's not enough for programmers just to be creative anymore, said Jenny Wall, senior VP of marketing at Hulu. The pressure to show ROI and create long-term value is strong, but it’s crucial for content providers to maintain a human touch because viewers have a very personal relationship with their shows, she noted.
The way through those priorities is data, Wall explained. Programmers need to use data more effectively to understand the viewers’ connections with shows, to create new shows, and to help viewers discover more content so the audience becomes more valuable to advertisers.
“It's really important that we show that TV is not a one-way relationship,” she said, “to show that TV can love you back.”
New ways to access online video content—such as OTT—and innovation among publishers combined with “the emergence of brands” resemble the early days of cable, said Brian Angiolet, senior president of consumer products at Verizon. The telecom, which acquired AOL last year, participated in the AOL NewFront to promote the Go90 video platform it introduced at last year’s presentation.
“What is old is kind of new again,” said Angiolet.
New in 2016 was an emphasis on VR programming. New headsets from Oculus made for use with smartphones are making high-quality VR accessible to consumers for home use, and most publishers at NewFronts announced they were diving in or doubling down on their first experiments.
Eugene Wei, head of video of Oculus, said sales are moving fast and compare to the adoption curves for other technologies. He acknowledged VR technology has had many false starts and “it’s easy to be skeptical,” but added: “We’re past that now.”
The future of media depends on experimentation, such as VR storytelling, said Mark Thompson, CEO of the New York Times Co. The company announced it has reorganized its R&D Labs as Times Story(x), a new unit dedicated to developing new storytelling techniques with new technology and is seeking to collaborate with advertisers though its T Brand Studio unit.
“The trend toward a visual future is obvious and accelerating,” said Meredith Kopit Levien, The New York Times’ chief revenue officer.
Online video ad spending is still catching up with audiences, but “the advertising money is moving where the eyeballs are going,” said Jimmy Maymann, president of AOL content and consumer brands. He noted 2016 will be the first year that digital media ad spending will overtake television spend by advertisers. A study by the IAB released during NewFronts showed ad spending on original digital video more than doubled in the past year, and 68% of marketers and agencies believe digital video will be as important as TV programming in the next three to five years.
The increased audiences and spending are spurring a development of more TV-like programming in order to meet the need for content. Most presentations at NewFronts held out partnerships—whether between publishers and tech companies, brands and makers, or platforms and brands—as a way to meet the demand.
“Distribution is table stakes. ... What matters is the big idea,” said Time Inc. chief revenue officer Mark Ford. Many companies stressed the importance of finding unique content to differentiate their platforms. Armstrong noted AOL has built 17 partnerships with brands, including the NBA and NFL, to add to its content.
"Audiences have shown they are willing to pay for quality content, especially if those payments make ads disappear," said Scott Donaton, chief content officer of DigitasLBi North America. The agency network built its entire NewFronts presentation on the concept of ad skipping and the alternatives for brands in the ad-blocking environment.
Digitas panel (L-R): Scott Donaton, Morgan Spurlock, Dan Harmon, and Mitch Hurwitz
Partnerships with content creators and an emphasis on storytelling is the way to get through to consumers, Donaton said: “Don’t get in the way of what they want. Be what they want.”