The NewFronts Bring A New Day — What’s Next?

At the end of every NewFront week, our industry asks the same question: Has digital video arrived? 
While one can never be certain, this time, finally, it looks like the answer could very well be “yes!” Why?  The content has matured, and it looks like things could be catching up in terms of ad spend as well. It has been projected that last week’s DCNF presentations could have driven over $1 billion in ad spend.

Programs like  “Booth at the End” set the stage for one of the newer programs driving home the fact that this could be online video’s breakout moment: “House of Cards.” It’s being cited as one of the larger examples of how streaming video can disrupt cable and broadcast television distribution — and there’s no question that the series has already changed the game at every level.

For one thing, “House of Cards” has proven that a streaming series can have international legs – an extremely important factor in securing funding for future high-quality online shows. “House of Cards” will be released on Blu-Ray and DVD in June, and reports coming out of the MIP-TV festival in Cannes show strong sales in international TV markets like Japan.
But it’s the series’ success online in the U.S. and in other countries where Netflix streams (such as Canada, the U.K., and throughout Latin America) that has marketers all abuzz. Yes, consumers will watch a series that departs from the linear release cycle by releasing a whole season’s worth of episodes (13 in this case) at once! 

Hulu and Amazon are following Netflix’s lead by developing their own original series. And more online Netflix series are already on the way. “Hemlock Grove,” a sci-fi series, will premiere 13 episodes at once on April 19.  In May, the online platform will resurrect the old Fox series “Arrested Development” with 14 immediate episodes. Another sci-fi series, “Sense8,” is under development from the producers of the “Matrix” films. Not to mention, a second season of 13 “House of Cards” episodes is currently in production.

Video already represents over 50% of all global Internet traffic, according to the Cisco Visual Networking Index, which recently projected it will reach 55% in 2016.  But, Cisco added, “The sum of all forms of video (TV, video on demand, Internet, and P2P) will be approximately 86 percent of global consumer traffic by 2016.”

What is clear is that increasing numbers of consumers are going to be consuming their video in a whole new way over the next few years, as the viewing and distribution paradigm has been totally disrupted by “House of Cards”
But the success of “House of Cards” has also raised a serious question that is no doubt running through the minds of brand marketers everywhere: How do you capitalize on future monetization opportunities in online video, now that the medium has achieved mainstream importance?

Traditionally, brand advertisers have relied on the 30-second or 60-second spot to tell their brand narrative. With the rise of Netflix’s original content initiative, advertisers are going to have to look at different monetization methods.

There were a number of companies who had products deeply integrated into much of “House of Cards,” including Canon, Apple and Sony. In the case of Sony, it could be because the company is handling the international sales rights for the popular series.

For some brands, deeper integration into production might be the opportunity that makes the most sense. Being involved with a program from the onset can ensure that your brand receives optimal placement without sacrificing quality. 

Others might turn to tasteful content overlays at the bottom of the screen, such as those we’ve seen implemented on YouTube and on major television networks.

Will we begin to see second-screen experiences and deals like those delivered by Shazam? It’s possible, as long as the app delivering the advertising and deals also provides some sort of additional program content to users.

For yet another subset of advertisers, pure program sponsorship may be the best available option. Being associated with a hit web series might be enough to move the needle for a brand.

Whatever the choice, one thing that is crystal clear: “House of Cards” has changed significantly the hand dealt to marketers. They’re going to have to think of more engaging and out-of-the-box ways to connect with consumers online than ever before.

by Chris Young
Chris Young is CMO of Alloy Digital.
Courtesy of MediaPost

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