Analyst expects Netflix to reach 100 million global subs by 2018

Stifel Nicolaus analyst Scott Devitt expects Netflix Inc.‘s international subscribers to surpass its domestic subscribers within the next five to six years.

Devitt, who upgraded Netflix to “buy” from “hold” with a $380 price target, believes the company will have about 100 million global subscribers by 2018.

“While 4Q may continue to be bumpy, we believe 2015 will see resumed growth from launches in Western Europe in mid-September 2014, particularly from large countries such as France, Germany, and Switzerland, as well upcoming launches,” the analyst said in a Jan. 13 research note.

The analyst expects the company to expand further in Western Europe, with Spain, Portugal, and Italy being the next likely targets

Second Screen Synching Increases Ad Awareness

Second-screen usage distracts viewers from TV advertising, according to a study from TNS Infratest.

Among viewers who used a second-screen device while watching television, TV ad awareness dropped a shocking 58%, compared to TV-only viewers participating in the study.

That said, the research found that new technologies can bolster ad awareness and brand image among those using second screens while watching TV. When new cross-media technology synching the delivery of TV and online ads onto the second screen was used during the study, TV ad awareness increased by more than 40%, creating an uplift among the mobile and tablet users.

“This study again confirms to advertisers that attention is turning away from the TV towards second screen devices, especially during commercial breaks,” said Andreas Schroeter, co-founder and COO of wywy. “Nearly half of the TV viewers use their tablet or smartphone to write emails, read news or surf on social networks while watching TV. New cross-media technologies synching TV and online ads are now proving to be an effective solution in recapturing the viewers’ attention as it diverts to the second screen.”

The study also recorded strong uplifts in key advertising performance indicators such as brand attitude (38%) and word of mouth (18%) when online ad synching technologies were used in tandem with TV advertising.

The company pointed out that a valuable by-product of the synched solution is the immediate feedback channel it provides to the performance of television advertising and its ability to impact online behaviour – a phenomenon that has increased due to the proliferation of second-screen usage in parallel to TV viewing.

The TV revolution has just begun…

Apple’s recent purchase of video-recommendation site Matcha.tv is further evidence of the coming revolution of IPTV.

Matcha.tv is a site that enables people to bring together programming guides for a variety of different services, such as Hulu, Amazon, and Netflix.

Most of the content we now watch on TV, with the exception of live events and sports, is available online somewhere. The challenge for the consumer is finding the content they want to watch across multiple streaming sites (Netflix, Hulu, Amazon, etc) and then playing it on whatever device they choose.

The TV revolution will begin when someone creates a smart software interface that makes IPTV video content search and playback seamless across devices and platforms. The holy grail moment is when someone creates an IPTV platform that is as easy to use as the box in your living room, but extends the viewing experience to whatever device you currently have in your hand.
One thing Apple has done consistently well is to use software to simplify complex technology problems exactly like this.

This past year has bern flooded with rumors of Apple expanding their “experiment” with TV, but this looks like Apple has taken an important step towards starting a true TV revolution.

VivaKi study determines the best Tablet ad formats

The three best ad models for tablets are: banner to full-page rich media, pre-roll with overlay, and rich media interstitial.

This is according to The Pool, a 14-month long research initiative from VivaKi that featured participation from 26 major advertisers and publishers, including Bank of America, Coca-Cola, GM, ABC Television, Crackle, Scripps, Tremor, and Yahoo.

The study uncovered that the three aforementioned ad models “significantly outperformed” their respective benchmarks on at least one of three behavioral metrics (engagement rate, click-through rate, or time spent), and those who engaged with the models saw lifts on all six attitudinal metrics (unaided awareness, aided awareness, mobile ad awareness, message association, brand favorability, and purchase intent).

For example, pre-rolls with an overlay, which the study determined worked best with video content (obviously), generated a 3.3% increase in time spent when compared to a traditional pre-roll video.

Vivaldi study identifies the best Tablet ad formats

The three best ad models for tablets are: banner to full-page rich media, pre-roll with overlay, and rich media interstitial.

This is according to The Pool, a 14-month long research initiative from VivaKi that featured participation from 26 major advertisers and publishers, including Bank of America, Coca-Cola, GM, ABC Television, Crackle, Scripps, Tremor, and Yahoo.

The study uncovered that the three aforementioned ad models “significantly outperformed” their respective benchmarks on at least one of three behavioral metrics (engagement rate, click-through rate, or time spent), and those who engaged with the models saw lifts on all six attitudinal metrics (unaided awareness, aided awareness, mobile ad awareness, message association, brand favorability, and purchase intent).

For example, pre-rolls with an overlay, which the study determined worked best with video content (obviously), generated a 3.3% increase in time spent when compared to a traditional pre-roll video.

comScore Unveils Multi-Platform Ratings

ComScore on Monday officially launched its new cross-platform reporting system combining audience metrics from Web sites, video and apps across PCs, smartphones and tablets.

Unveiled in beta in November, the company’s Media Metrix Multi-Platform reporting aims to provide a more complete view of an online property’s audience as people increasingly access the Web and other content on mobile devices.

The impact of the mobile shift has been especially pronounced for a handful of top 100 sites, especially where combined desktop and mobile U.S. audience in February increased by triple digits, according to the new comScore numbers. That includes mobile-centric properties like Groupon, up 223%, Zynga (211%) and Pandora (183%).

Across the top 100, the unduplicated audience grew by an average of 38%, with 19 properties seeing the reach of their desktop audience expanded by 50% on smartphones and tablets. (comScore mobile figures reflect use on the iOS and Android platforms.)

Among sites in the top 25 that saw a healthy ratings bump from the combined desktop/mobile reporting were Apple and Twitter, both up 54%, Yelp (51%), the Weather Channel (37%), eBay and About.com (both 29%), Gannett sites (32%), and Amazon (27%).

With the exception of properties like Pandora, the ranking of the top sites remained similar to that when counting desktop-only traffic. The top five multiplatform sites in February — Google, Yahoo, Microsoft, Facebook, and Amazon — were the same ones as through the standard Media Metrix ratings in January.

comScore said the cross-platform reporting will give publishers and media companies better insight into the nature of their audiences in order to align content and marketing strategies and monetization efforts. For media planners, it can help to optimize audience reach and frequency within and across channels.

Public companies like Pandora, Zynga, Yelp and Facebook have already begun highlighting mobile audience metrics in quarterly reports in relation to steps they are taking to monetize the sharp rise in mobile usage. Pandora, for example, reported earlier this month that mobile revenue in its fiscal fourth quarter surged 111% — even faster than the 70% increase in mobile listening hours.

For now, comScore will continue to publicly release the desktop-only Media Metrix top 50 Web properties on a monthly basis, but will regularly publish the Multi-Platform ratings in some capacity alongside, according to Andrew Lipsman, vice president, industry analysis at the digital measurement firm. He added that other services, like the Video Metrix and Mobile Metrix ratings, will be maintained.

The new cross-platform tracking service overall includes reporting on more than 300,000 digital media entities, including their unduplicated audience size, demographic makeup, engagement, performance within key user segments, and behavioral trends.

Multi-Screen consumption making TV harder to measure

 Every Tuesday, the Nielsen company publishes a popularity ranking of broadcast television programs that has served as the industry’s report card dating back to when most people had only three networks to choose from.

And every week, that list gets less and less meaningful.

With DVRs, video on demand, game consoles and streaming services, tablets and smartphones, the way people watch televisionis changing and the industry is struggling to keep on top of it all. Even the idea of “watching television” is in flux. Are you “watching TV” when you stream an episode of “Downton Abbey” on a tablet?

Nielsen, which has long had a virtual monopoly on the audience statistics that drive a multi-billion dollar industry, last week took an important step toward accounting for some of the changes. Starting in September, Nielsen will begin measuring viewership through broadband devices like game consoles for the first time. Right now those numbers go uncounted.

“The ratings are a very one-dimensional look at what is happening,” said Alan Wurtzel, top research executive at NBC Universal, “and we now live in a very multi-dimensional world.”

Nielsen’s weekly rankings count people who watch a broadcast TV show live or on their DVRs that same day through midnight on the West Coast. To be sure, this is still how most people watch television. CBS didn’t need anything other than live numbers to know that its new reality show “The Job” was a flop, and canceled it a week ago after two episodes.

Through separate, less publicized rankings, Nielsen can also track how many people see a program on a time-shifted basis. One ranking, which measures live viewership plus those who watch on DVR or video on demand within three days of the original airing, is what the industry uses to set advertising rates. Other rankings measure those who watch within a week, or even within a month.

Those numbers can present a much different picture of a program’s popularity.

During the last week of January, for example, ABC’s “Modern Family” ranked No. 12 for the week with 10.8 million viewers if you count just the people who watched on Wednesday, Jan. 23. But within seven days, 15.9 million people had seen the episode, enough to make it the third most popular show of the week behind two “American Idol” episodes. Fox’s “The Following” finished a modest 15th place initially, but its audience jumped by 45 percent over the next week, enough to lift the show to fourth place.

Meanwhile, almost all of the “60 Minutes” viewing is done live. The CBS newsmagazine dropped from seventh place in the initial rankings to 15th after a week.

The time-shifted viewing can change a network’s perception of a show. NBC would have likely canceled “The Office” years ago without this additional audience. “The idea of how many people are watching a program and caring about the show becomes increasingly important, and it is not reflected in the Tuesday report,” Wurtzel said.

In a world where people demand information faster and faster, television executives are no different. They want ratings NOW. The problem is, all of the changes in content consumption demand patience. Nielsen’s report on how many people watch a show within seven days isn’t released until three weeks after a show first airs.

“We have to basically train the entire industry to no longer look at the fastest information, which is preliminary and not necessarily reflective of what the reality is,” Poltrack said.

Nielsen says it regularly discusses how it releases ratings with all of its clients and there’s been no consensus on change. Most people watch their favorite shows as quickly as they can, said Pat McDonough, Nielsen senior vice president of insights and analysis.

Each week the average American spends 32 hours and 15 minutes watching live television, according to a Nielsen study issued last month. More than 12 hours is spent either watching time-shifted TV or DVDs, playing on game consoles, surfing the Internet or watching video on computer or mobile devices, the study said.

“The one thing most people don’t think about is a lot of the additional viewing is rolling out slowly over time and right now, live plus same day viewing is the best way to measure,” she said. “It may not be that way five years from now.”

Networks dispute the notion that things are changing slowly, although they are happy that Nielsen will soon be able to estimate how much television is being watched on broadband. There’s a limit to the information, though: Nielsen can’t yet tell specifically what programs people are watching this way.

Later this year, Nielsen hopes to roll out a pilot program to identify what people are watching on iPads. It’s unclear when this technology will be available for other tablet brands or for smartphones.

The company measures some online video streaming and includes it within its time-shifted reports. However, this picture is partial, too. Nielsen can measure streamed programs only if they have the same commercials shown on TV, and not every website does this.

Netflix’s release of an entire 13-episode season of the well-reviewed series “House of Cards” on Feb. 1 was a television landmark, evidence that a lot more “television” content is coming from non-traditional sources. Nielsen has no idea how many people have seen “House of Cards,” though. Netflix knows. But it won’t tell.

People are increasingly spending time catching up on series they’ve caught on to midstream, the phenomenon known as binge viewing. No one really knows who is spending an evening watching three episodes from the first season of “Homeland” instead of live TV. Nielsen has an oblique way to illustrate that binge viewing is a reality: When AMC’s “The Walking Dead” returned from a hiatus on Feb. 10, the 12.3 million people who watched that night was a series record and evidence that it had attracted new fans during a pause in original episodes.

That episode of “The Walking Dead” was the ninth most-watched television show in prime time that week, but it would have taken some investigation to know that. Nielsen ranks broadcast and cable shows separately even though that distinction means little to a younger generation of viewers. TV is TV.

There’s a similar dynamic with PBS. The public broadcasting system generally doesn’t pay Nielsen to have its programs rated, although it will on special occasions. The 8.2 million people who watched the third-season finale of “Downton Abbey” on Feb. 17 was more than anything seen on ABC, Fox or NBC that night. No one would have known that unless they’d seen a report generated by a PBS press release.

The numbers-crunchers within the industry know all of this.

Nielsen’s Tuesday rankings — and the achievement of getting into the week’s Top Ten — used to mean the world. Now it’s a small part of television’s picture.

DAVID BAUDER