While Google has made some well publicised moves in the TV space, including a recent deal with French telco Bouygues Telecom and a deal back in 2018 with Disney, it’s still a relatively new entrant in the TV space, and many still don’t know the full extent of Google’s TV offering. VAN spoke with Justin Gupta, Google’s UK head of broadcast and entertainment, to hear more about how Google works with broadcasters, as well as how the industry’s focus on privacy is well timed for broadcasters, and how Google is seeing the coronavirus affect its broadcast partners.
I think it’s fair to say that Google is a relatively complex company and there are many components that overlap with the TV industry. What does Google offer broadcasters?
TV, like many other industries, is evolving due to the internet, and our mission to make the world’s information accessible and useful is equally applicable to TV content. And broadcasters broadly face three challenges. Firstly, how to create compelling content, secondly, how to distribute it effectively or make it accessible to viewers, and thirdly how to monetise that – whether through ads or subscriptions.
Our products in TV touch on all of these three areas. So Google Cloud is helping broadcasters create content more efficiently. YouTube, Chromecast and Android TV provide three different ways for broadcasters to distribute their content. And Ad Manager, which is my primary focus, provides broadcasters with a platform to sell their advertising space across all devices.
The promise of the internet is that viewers can access content when they want and where they want it. But the challenge of this vision for broadcasters is one of fragmentation. As the audience is viewing content in more ways and on more devices than ever before, it’s become a headache for broadcasters to manage this, and that’s where Google can help.
Many in the TV industry have been wary of working with Google for various reasons. Is that something you’ve been able to overcome, and how have you gone about it?
We’re a reasonably new entrant in this space, and we’re a bit more established in the publishing industry. But TV distribution has been evolving for decades, first moving from terrestrial to satellite and cable, and more recently to online delivery. And that’s the space that Google has operated in since the beginning.
As TV is moving online, broadcasting like many industries is seeing change across the whole content delivery supply chain, from production through to distribution. And that’s where we can be most helpful to broadcasters. And there’s a huge opportunity around bringing more automation, machine learning and data insights to TV, which are areas where we have expertise. And that’s being powered by this direct to consumer revolution.
One area of interest for my team is how these funding models are changing from SVOD to AVOD and everything in between. And with OTT, for the first time, you can actually vary that on a per-viewer basis. But the time for experimentation and innovation really is right now, as OTT viewing has become material, it’s between ten and twenty percent for most broadcasters in the UK and Ireland, and it’s moving even faster in the Nordics.
Are there any strategies that broadcasters can use to make AVOD services more palatable when SVOD services are increasingly eating into their market share?
I think the beauty of IP distribution is that you can now mix AVOD with SVOD, and give the choice to the consumer. So for example, Hulu announced last year that the majority of their viewers are using the ad-supported tier with a slightly lower subscription.
And there are other benefits in mixing models too. For example, Spotify have a freemium model to attract paid subscribers, and advertising is now a significant part of their business. While their average revenue per user for subscribers is declining slightly as people move to family packages and as they grow in new markets, the average revenue per user for the ad-supported model continues to grow. And for every user they convert from freemium to paid, they gain.
We’re doing quite a lot of work in this area with sports broadcasters too where a mixture of subscription and ads works well. I can’t say much more on that right now, but do watch this space!
What impact do you think privacy regulations will have on the wider TV industry?
I’m working with both digital publishers and broadcasters exploring more novel advertising approaches such as dynamic ad insertion in OTT and HbbTV on connected TV. And the challenge for digital publishers is managing change.
For example, a lot of companies have talked about changing the way they use third party cookies. We plan to phase out support for third party cookies in Chrome, and the change is likely to impact trading dynamics. Fortunately these changes are happening gradually, giving the advertising ecosystem time to adjust, but publishers are having to retrofit new approaches around existing setups and they’re concerned about maintaining current revenues.
But connected TV advertising is a bit more nascent and the timing is actually quite positive, as we’re able to apply the lessons from digital publishing to new inventory types. For example, digital ad insertion usually happens in an app environment, and as the ad is stitched server-side, the broadcaster has more control over what data is shared and with whom. With newer cases like HbbTV, there’s an opportunity to define how these advertising use cases can work in a privacy safe way from the very start, and bake that into the standards to ensure that users are in full control of their data, and all data usage is transparent across the ecosystem.
And from a user perspective, personalisation, whether that relates to content or ads, should be something that’s under their control. For broadcasters, personalisation is what keeps viewers coming back in a more fragmented world, and for the advertiser, it becomes just another tool to capture the right users and serve them the right message at the right time. And as addressable TV continues to grow, it will become a more important part of the marketing mix.
Are you surprised that Facebook hasn’t made a stronger play in the TV market?
Facebook is primarily a mobile experience for most users. Instagram TV moved away from exclusively vertical video last year, but it’s also still a mobile experience. Whereas for us, the TV is our fastest growing screen on YouTube with more than 50 percent growth in watch time year-on-year in many markets. And the rapid growth of Netflix and Amazon on the big screen compliments that, as viewers want to watch TV content on the biggest screen available.
What role do you think voice is going to play in TV?
I think we’ll start to see the widespread adoption of voice to replace the remote, especially for the younger generation – all my kids learned to use voice before learning to use the remote. It’s still not a completely friction-free experience, but I think it very much could be. And I also think we’ll also see more predictive machine learning based recommendations systems.
What is the biggest opportunity in TV over the next ten years?
I think in three words, more screens everywhere. I think screen technology is becoming increasingly flexible. We literally have foldable phones now available, and I expect screens to become very easy to deploy on almost any surface: fridges, walls, tables, you name it. That will drive more content consumption for sure.
And my own experience of video viewing is that screens everywhere will be the new reality. For example, the Google home hub in my kitchen and voice increasingly will start to replace the remote for devices.
What impact have you seen on the industry from the coronavirus pandemic?
I think these are unprecedented times which are affecting the lives and businesses of our users and customers, and many Googlers around the world are now working remotely. We’re seeing high levels of engagement for our news broadcasting partners for now, but sports and events-based broadcasting has been significantly impacted. And our goal is to be helpful and useful during this time and help our partners navigate this challenge and prepare for a recovery.
