In this week’s Week in Review: Ads are no longer Italian TV’s primary revenue stream, Publicis outlines AI’s role in CTV, and Netflix looks for ways to boost its ad business.<\/p>\n
Subscriptions Overtake Ads as Main Source of Italian TV Revenues<\/b><\/p>\n
Subscriptions have overtaken advertising as the main source of Italian TV revenues, according to the Communications Authority’s (AgCom) Annual Report. This marks the first time advertising has not been the main revenue stream in the Italian TV sector, which was worth around \u20ac8 billion in 2022, down 0.3 percent on 2021.<\/span><\/p>\n The revenues came mainly from subscriptions (39.1 percent), followed by advertising (36.8 percent) and the TV licence fee (24.1 percent). Subscriptions and licence fees grew their share (from 38.1 percent and 23.5 percent respectively) from 2021, while ad revenues dropped from 38.5 percent.<\/span><\/p>\n The report also showed that public service broadcaster Rai made up the largest share of total revenue (29.6 percent), followed by Comcast\/Sky (23.4 percent) and MFE (19.7 percent). Although Rai and MFE saw their slices drop by 0.1 and 0.2 percent respectively, Sky witnessed the biggest drop at 4.5 percent. Meanwhile the SVOD services (Netflix, DAZN, TIM, Disney+ and Prime Video) grew their market share by 5.2 percent, now accounting for 17.1 percent of total TV revenues.<\/span><\/p>\n Publicis Says AI Plays Critical Role in CTV<\/strong><\/p>\n Publicis Groupe executives spoke at length about the impact of AI technologies on the agency group’s business in its Q2 financial results this week. And CEO Arthur Sadoun said the group’s existing investments in AI are already giving it an advantage in several areas, including CTV and retail media campaigns.<\/p>\n By combining AI with Publicis’s Epsilon identity solutions, Sadoun said Publicis is able to run better and more efficient ad personalisation across media, as well as better outcome measurement. And in CTV ad retail media, AI plays “a critical role” in finding reach and incremental sales for marketers.<\/p>\n Sadoun added that it’s still very early days for AI’s used in advertising, stating that we’re just beginning to see its potential. A priority for Publicis will be making sure its existing investments in AI are utilised across the entire business.<\/p>\n The statements came off the back of a strong quarter for the agency, in which organic revenue growth came in above expectations at 7.1 percent. Given this strong performance, Publicis has now upgraded its outlook for the full year, projecting five percent organic revenue growth across the year.<\/p>\n Netflix Cuts Basic Ad-Free Plan in Effort to Boost Ad Business<\/strong><\/p>\n Netflix has announced it is cutting its cheapest ad-free subscription plan in the US and UK, a move which looks designed to drive uptake of its cheaper ad-supported plan (or push users on to a pricier subscription tier).<\/p>\n The news, delivered alongside Netflix’s Q2 financial results, comes alongside fresh hints at the progress of Netflix’s push into advertising. The company revealed that overall subscriptions to its ad-supported tier nearly doubled in Q2. But this growth was from a small base – Netflix hasn’t revealed its full subscription count for Netflix with ads, but revealed in March that US subscriptions had reached one million. And revenues generated by advertising are still not material in relation to Netflix’s overall business.<\/p>\n “Building an ads business from scratch isn\u2019t easy and we have lots of hard work ahead, but we\u2019re confident that over time we can develop advertising into a multibillion-dollar incremental revenue stream,” the company said in a letter to shareholders.<\/p>\n Twitter Ad Revenues Down, Hate Speech Up<\/b><\/p>\n Twitter remains cash flow negative due to a 50 percent drop in ad revenues, according to a series of tweets from Elon Musk this week. Meanwhile research from the Center for Countering Digital Hate, the Anti-Defamation League and Media Matters has revealed spikes in hate speech, harassment and misinformation on the platform during Musk\u2019s tenure. New CEO Linda Yaccarino called the findings \u201cincorrect, misleading, and outdated.\u201d<\/span><\/p>\n We\u2019re still negative cash flow, due to ~50% drop in advertising revenue plus heavy debt load. Need to reach positive cash flow before we have the luxury of anything else.<\/p>\n \u2014 Elon Musk (@elonmusk) July 15, 2023<\/a><\/p><\/blockquote>\nThe Week in Tech<\/strong><\/h2>\n
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