➤ Ad-supported streaming has boomed, but there are still disconnects with scale and ad inventory.
➤ Streaming video measurement is still "a mess," but there is more data and opportunity than ever.
➤ The globalization of content is a challenge for content companies to rethink distribution and expand expectations.
The evolution of streaming video has taken many turns, from single subscription services to advertising-based platforms that resemble linear TV networks to free ad-supported TV services, or FASTs, that aggregate networks and resemble entire pay TV packages.
Through the often-lumpy formation of today's streaming landscape, Wurl Inc. has been there, providing tools for content companies to connect with viewers, advertisers and the streamers who program various platforms. The streaming technology company has serviced some of the biggest brands in content, including AMC Entertainment Holdings Inc., British Broadcasting Corp. and Amazon.com Inc.'s Twitch platform.
S&P Global Market Intelligence caught up with Wurl COO Sean Doherty to discuss some of the challenges and opportunities in the ever-changing streaming industry. What follows is an edited version of that interview.
S&P Global Market Intelligence: Streaming traditionally has been dominated by subscription video services, but ad-supported streaming has taken a big leap forward in the past two years. Are you seeing a commensurate increase in advertisers migrating to streaming to fill some of the inventory there?
 Wurl COO Sean Doherty Source: Wurl |
Sean Doherty:
On the content-company side, they largely have a scale problem. The advertisers want to buy this stuff at very high scale. They want somebody that can commit to tens of millions, hundreds of millions of impressions across their campaign with some realistic frequency cap. Connected TV as a category is growing really quickly, but single publishers have a hard time committing to that level of campaign.
Measurement of both viewership and ad performance has been a perennial issue with streaming TV. How does the measurement environment look today?
It's still the Wild West, insomuch as it is hard to find standards. What is a viewer? What is a session? How do I quantify those things? Is a viewer somebody who watches for 60 seconds, or two seconds? Two minutes? Everyone has different definitions. The metrics that are more standardized are really around the advertising, because there is only so much inventory. The inventory is time-based, and its directly correlated to how many people are watching the channel. The viewing metrics are much more difficult to develop standards around. We hope standards develop, but the advertising standards are much more well understood.
It seems like those have been developing for years without much consensus.
On the viewing side, it's a mess, but I will say though the content companies now have access to more data than they ever had before. They're effectively delivering this content direct-to-consumer, and they're getting the data associated with that, and they're learning what they can do to make use of all that data. Despite the fact that the definition of a viewer isn't standard, at the very least, they have so much more data now that they can use to make educated decisions on the marketing side, on the content side, on the scheduling side, even in creating their channel.
You've compared Wurl's targeting and conversion tools to what has been available on the web and mobile in the past. Why is it taking connected TV so long to catch up to some of these other digital-first platforms?
One, I think it took mobile longer than we remember to get going. Mobile had the same challenge, where people started using their mobile devices for things that people didn't foresee, and that generated a lot of advertising potential, but that took a lot of time to really take off. Even the big players in the app download space — many are not very old companies.
On connected TV, we get the advantage of learning some of the lessons from mobile and maybe advancing it a little faster, but I also think its migrating with consumption. As people's consumption moves toward streaming and moves toward ad-supported, that is driving the marketplace and growing connected TV faster.
Consumer demand relative to ad-based platforms and FAST services has changed a lot in the past couple years. What are some of the more interesting trends you've seen, and what are some of the new challenges that are arising?
We started this company a very long time ago. We were way too early. We grinded it out for a long time, and we were waiting for what has happened in the past few years. Back then, we thought it was going to happen sooner, but it's here and it continues to accelerate its pace of growth and innovation.
A lot of very smart people thought when Netflix Inc. started to move into streaming, everyone was just going to watch everything on Netflix, and no one was going to watch ads ever again. I think ad-supported was unfairly bucketed into this category of cord-cutting, and I think that hurt the ad-supported streaming world for a long time.
Three or four years ago, things started to turn. Consumers started to find services like Pluto and Xumo. Services like Samsung TV Plus started to get some traction, initially from smaller content companies and then from the largest cable and broadband network conglomerates. As consumption grows on these platforms, we've only seen that trend accelerate.
Where do you see this going? Any thoughts on where the markets are going to level out?
Television viewing across the world is the single most-done voluntary activity for human kind, period. So if you come at it form that grandiose statement and you boil it down, it means people spend a lot of time watching video and watching television, and the migration of that to streaming is only in the first two innings. We've got a long way to go before all this goes to streaming. In the meantime, we will start to see people do more and more experimental things with finding and retaining viewers, presenting content in new ways, recommendation engines, all this stuff that you can layer on top. I think people are only scratching the surface with what can be done.
The other most interesting thing is the globalization, stuff like what is happening with the Korean Netflix show "Squid Game." Things like that never would have happened even five years ago. No one would have paid for "Squid Game" at that level. People wouldn't have discovered it. Now, you have this environment where a company can make a show, put it out there to the entire world all at once, and that ability changes the game in terms of how content companies need to think about content and distribution. You've got to be everywhere the viewers are going to be.