When the history of TV is written, MVPD VOD is sure to go down as one of the great missed opportunities of the 2010s. Fortunately that may be starting to change, but first a look at how we got there.
MVPD VOD was originally a marketing scheme, a way to let viewers get a glimpse of all the great shows the various networks had, maybe even sample an episode, or catch up on something they’d forgotten to DVR.
No one anticipated Netflix or binge viewing, but just to make sure that viewers didn’t try and watch entire series on VOD (which was largely ad-free at the time) deals were struck that limited the current season VOD offerings to just the five or six most recent episodes of the series.
Since the conventional wisdom was that an uptick in VOD viewing would be harmful to both networks and MVPDs, the VOD libraries were designed in such a way as to be largely inaccessible, buried inside a menu option that sat several levels down from the viewer's main screen or hidden inside a random channel in the line-up.
Worse still, once a viewer did manage to find the VOD sub-menu, the tabs on the page made little sense, with seemingly identical categories like “Most Popular Shows” “Hit Shows” and “Top Series” all vying for the viewer's attention. Any sort of workable search function was, needless to say, nonexistent.
So it was no wonder that viewers happily flocked to Netflix, even though many of the same movies and TV series were available via MVPD VOD. That trend was cemented even further, when MVPDs started to insert unskippable ads into their VOD programming.
The Problem With Unskippable Ads
Unskippable ads weren’t a bad idea in theory, but in practice they were disastrous: viewers were used to ad-free VOD or DVRs that let them fast forward through ads thirty seconds at a time. Being forced to watch ads seemed punitive and sent many of them rushing into Reed Hastings’ waiting arms.
MVPD VOD 2.0
Fast forward to 2019 and the landscape is quite different.
Viewers have gotten used to unskippable ads thanks to OTT where ads are both unskippable and in low enough volume so as not to be overly onerous. Today's viewers have further gotten used to the idea that they can’t channel surf away from ads—the UX of OTT sites does not allow for that, or, at the very least, it makes it highly complicated.
Viewer have also discovered the joys of time shifted viewing, eg., the ability to watch shows on their schedules, not the networks, which is good news for MVPD VOD, and why so many companies are betting on the fact that consumers will rediscover the joys of a sizable content library they're already paying for.
That’s not as absurd as it sounds. Despite all the blather about “the massive wave of cord cutting” it has yet to actually materialize and close to 80% of U.S. households still subscribe to pay TV via traditional MVPDs a number that edges closer to 85% if you include the virtual MVPDs (which also have VOD libraries.)
It’s why companies like NCC, a joint venture between Comcast, Charter and Cox, are doubling down on set top box VOD. And why Beachfront, a company that’s been focused solely on OTT advertising for the past, just rolled out a product that enables programmatic advertising sales for the MVPD’s set-top-box VOD inventory. The new tech stack has already been directly integrated with a “top-ten MVPD” (they were got at liberty to disclose the name.)
The Beachfront product is unique in that it allows operators to serve up the VOD ads in real time, using Beachfront’s proprietary software that enables real time bidding.
“We’re breathing new life into VOD DAI (dynamic ad insertion), enabling it to scale the same way as CTV did,” said Chris Maccaro, Beachfront’s CEO.
“The fact that it’s real time is what’s getting people excited,” added Frank Sinton, who is Beachfront’s founder and president of the company, who also noted that it took Beachfront close to a year to perfect the technology.
By allowing advertisers to bid on specific audiences on VOD, Beachfront is hoping that both advertisers and MVPDs will become more enamored with addressable advertising and the value of reaching targeted audiences.
That plays into the company’s roadmap which includes developing ways for MVPDs to sell addressable in real time on linear. While many MVPDs sell addressable advertising at present, the systems aren’t automated and bidding isn’t anywhere close to real time.
“That’s definitely on our agenda,” noted Sinton, who added that the technology needed to deploy addressable linear was more complex than the technology needed for VOD.
It’s a smart move on Beachfront’s part though, because the future is looking more and more addressable and more and more automated. As MVPDs transition their customers from cable delivery to broadband delivery, linear addressable will become easier as well, as brands that are targeting specific customers or demographics on VOD will be seeking out ways to reach them on linear as well.
