Happy Weekend! Digital Media Weekender is a collection of our favorite digital media news of the week from BI Intelligence, Business Insider’s paid research service.
CABLE NETWORKS EMBRACE STREAMING AND 'SKINNY BUNDLES' TO CURB SUBSCRIBER LOSSES: Earlier this week, Comcast announced that it will begin offering an internet-based streaming TV service, The New York Times reports. The new service, called Stream, will allow Comcast broadband subscribers to bundle several streaming TV channels, including broadcast networks and HBO, with their internet service, starting at $15 per month.
Comcast's new streaming service illustrates two tactics pay-TV providers are using to curb subscriber losses:
- Cable companies are slimming down their TV packages in an effort to lower prices. To reduce subscriber losses, many pay-TV companies are offering slimmed-down versions of their standard TV packages. These "skinny bundles," or bundles that offer customers the option of paying for base channels plus a few select channels rather than a larger channel lineup, help keep costs down by reducing the fees that companies have to pay to carry cable channels. The result is, at least in theory, lower subscription prices that are more palatable to increasingly price-conscious TV viewers.
- Pay-TV companies are embracing streaming as the gap between internet and TV subscribers widens.Dish, Cablevision, and now Comcast have all released bundled or stand-alone streaming video services in hopes of retaining audiences that are increasingly shifting viewership to digital. Already, broadband subscribers (53 million) outnumber TV subscribers (49.2 million) on top US cable providers, according to Leichtman Research Group.
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TWITTER AIMS TO BECOME A MORE PREDOMINANT TRAFFIC SOURCE FOR NEWS PUBLISHERS: To increase the number of users who visit the site for news content, Twitter released a new feature this week that highlights tweets from news publishers, TechCrunch reports. The feature replaces URL links with a card-like format that displays brief summaries of stories and an enhanced image. Many users already flock to the digital media platform site for news: 63% of Twitter users receive their news from the social media site, up from 52% in 2013, according to new data published by Pew Research Center. The added visual attention to publishers' tweets hopes to attract users to news articles and ultimately drive them to publishers' sites.
News publishers will benefit from the new publisher tweet format in two essential ways:
- First, publishers could decrease their reliance on Facebook for referral traffic. At the end of 2014, Facebook accounted for a quarter of all referral traffic for publishers, while Twitter tacked on less than a percentage point, according to data by Shareaholic. As Facebook’s evolving article formats, including ‘Instant Articles,’ threaten to take ad revenue away from publishers, an additional media source with heavy referral traffic will benefit publishers.
- Plus, the new format will be effortless to adapt. The new format simply enhances images already present in the tweet to give the reader more article context without additional multimedia or style redesigns. This allows publishers to focus on content and not worry about aligning formats.
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MOBILE WILL FUEL STRONG GROWTH ACROSS FORMATS AS DESKTOP AND TRADITIONAL SPEND SLOW: Digital advertising will drive strong growth in the US media market over the next five years. The migration of ad dollars to digital will be spurred in large part by strong growth in mobile ad spend, as well as substantial increases in video and social spend, according to a new BI Intelligence report. Overall, digital ad revenue will increase from $57.2 billion this year to $96.4 billion in 2020, for a compound annual growth rate (CAGR) of 11%. Meanwhile, traditional media ad revenue will rise by a meager 0.4% CAGR.
Here are some key takeaways from the report:
- Mobile will be the fastest-growing advertising channel and buoy spending on each of the digital formats. US mobile ad revenue will rise by a 26.5% CAGR, from $17.4 billion this year to $56.4 billion at the end of 2020.
- Digital video ad spending is rising faster than search and display. Mobile's share of digital video revenue will reach nearly 50% in 2020, almost doubling from a 25.2% share this year.
- Unlike digital, traditional ad revenue will remain flat overall through 2020. TV will remain the largest recipient of traditional ad revenue over the period. US broadcast and cable TV ad revenue will grow by a slight 0.9% CAGR between 2015 and 2020.
YOUTUBE'S COMPETITIVE POSITION IS STILL STRONG DESPITE FACEBOOK'S GAINS: YouTube will launch a subscription-based, ad-free music service by the end of this year, CEO Susan Wojcicki confirmed earlier this week during an interview at Fortune's Brainstorm conference. The service, which has been in beta testing since last November, may allow YouTube to cement its video dominance and stave off competition from other digital media platforms, namely Facebook, which has reportedly been pursuing partnerships with music labels.
YouTube's new subscription music streaming service illustrates the video giant's strong competitive positioning in the digital video industry.
- YouTube is already a popular destination for music listeners. The video site is the world's leading music streaming service. In the first half of 2015, the site accounted for 57% of the world's 135.2 billion music streams, including music videos, according to Nielsen data cited by Music Business WorldWide. Additionally, competitors like Facebook are only now establishing relationships with music video publishers. YouTube, one the other hand, has longstanding relationships with record labels and an extensive library of music videos.
- Plus, YouTube's users come to the site to watch videos. Unlike other social platforms that are looking to segue into the video streaming industry, YouTube's estimated 1 billion users are loyal video viewers and access the site exclusively for its video content. YouTube and other Google-owned properties accounted for nearly double as many unique US online video views on desktop computers as Facebook in May 2015, according to comScore. Facebook, however, has claimed that their global views including mobile are on par with YouTube's.
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