If one thing has kept telco executives up at night over the past decade, it's the fear of becoming a dumb pipe. Verizon has been working to turn that threat into an opportunity since at least 2009, when it announced an SDK that would enable third parties to develop apps for broadband-delivered TV.
Today, Verizon Digital Media Services offers a platform of APIs and other tools that help TV stations and others publish their content to social media and other outlets. Hearst Television recently signed up with Verizon. (See Hearst Television Taps Into Verizon Digital Media Services' APIs.)
Telco Transformation recently spoke with Joseph Hopkins, Verizon Digital Media Services vice president of global media and entertainment sales, about how the platform benefits his company and content providers.
Telco Transformation: Your platform gives content providers such as Hearst Television a lot of capabilities: APIs that hook into their scheduling and ad systems, a tool for creating and publishing clips and a tool for ad insertion. Roughly how much time and money would a content provider have to spend to get all of those capabilities and benefits if it didn't use your platform? Your press release says the platform eliminates "the complexity and high costs," so the time and financial savings must be pretty significant?
Joseph Hopkins: You're absolutely right that our platform gives content providers a lot of capabilities. We've created our platform to be as flexible and easy-to-use as possible, able to be integrated into varying types of workflows effortlessly. We've received a lot of affirmative feedback from customers on how easy our platform is to use, and how quickly their content can be delivered through our platform -- usually in a matter of seconds.
We have an infographic entitled "It's About Time" that shows exactly how our services take less time and less money to launch an OTT service every step of the way, compared to other vendors. On average, it would take us about 44 days to launch an OTT service while with other vendors, it would take 180 days.
For example, with our clipping tool feature, [which] is also used by Hearst Television, it takes less than a day to set up a workflow to create clips that can be syndicated on a variety of platforms, from social media sites and websites. With other providers, it can take seven to 14 days to create a separate workflow specifically for clip selection, encoding and syndication.
Another differentiator is how we price our Video Lifecycle Solution, the OTT service solution that's available on our platform. We typically use a simple, usage-based pricing model where we charge by hours of content consumed, not by storage, delivery or encoding fees. That means the quality or type of file doesn't matter -- it can be 4K, HD, etc.
In turn, our customers are incentivized to deliver more high-quality content, such as HD experiences, and thus provide a better experience for their viewers. The way we charge is the way content publishers think about the value of their content -- by how much it's watched. They're counting success based on ratings; we charge by how many viewers are actually watching the content.
TT: The ad insertion aspect is interesting and probably a bit underappreciated. A lot of TV stations already have apps on, say, Roku that stream entire newscasts in addition to individual stories. But in my experience, they typically have few commercials, and sometimes there are more PSAs than ads. That makes me wonder if local stations are still struggling to figure out how to monetize their online services. What's your take? And does your ad insertion feature turn that challenge into an opportunity by eliminating some of the hurdles to running commercials?
JH: It's been proven again and again that low latency, personalized ads work. There are countless studies out there that show that viewers don't mind ads; they mind ads that aren't relevant and take a long time to load.
What we're providing through our dynamic server side ad insertion technologies is the opportunity for content providers -- including local stations -- to have relatable ads that load quickly. We offer the ability to have a one-to-one session for each and every single viewer. We fight ad-blocking. We're ensuring that there's the same quality for content as there is for the actual ads. All of these forces combine together to create a catalyst for more lucrative ad monetization opportunities.
TT: You offer a lot of analytics tools. What kind of insights have those provided Verizon and its customers? For example, any surprises in what, where and how people are consuming content?
JH: We zealously track everything to ensure that customers and users are getting the best experience. We track hundreds of metrics on all of our 20,000 plus servers around the world and have a top tier 365x24x7 network operations center which enables us to monitor specific metrics, such as keyframes, audio levels and queue lengths. Access to our analytical data enables our customers to better understand their viewers' habits and then act upon that data to provide even better viewing experiences.
As for how people are consuming content, we recently published a report that goes in depth into this topic, our "Quality Matters" report. We analyzed the mobile consumption habits of 1,000-plus US adults who stream SVOD and have a broadband and mobile data plan.
In some respects, what we saw is similar to what everyone's talking about in the industry: Millennials are consuming more online content than older viewers. Streaming video on new and emerging devices is growing. Viewers want an optimal quality viewing experience.
But on the other hand, we found out some really interesting facts that validate what we've been saying all along, about how critical it is for content providers to offer a quality viewing experience, specifically to increase engagement and monetization opportunities.
As content owners and creators strive to reach more and more eyeballs, we've found that one of the best, fastest and most important ways to increase viewership is to increase quality. Our study shows that there's an opportunity to increase engagement by 25% -- just by ensuring a high-quality experience.
But quality isn't only important to attract and retain viewers; it's also important for additional monetization opportunities. For example, we've noted that ad-supported services would see an increase in ad revenue of at least 25% and SVOD providers would see a drop in churn of 10% or more, if viewing problems related to poor quality were eliminated.
— Tim Kridel, Contributing Writer