How to Create Great Opportunities with Dynamic, Targeted Ad Insertion and Personalized TV

Damien Lucas, CTO & co-founder

While the TV & media industry is playing a vital role in society during a period when we are advised to stay home, the industry is facing its own challenges. Our sector is becoming increasingly competitive as new streaming platforms continue to launch. More and more options are provided for consumers. Could personalized TV win them over?

Earlier this month, I participated in a panel discussion organized by Dataxis. With speakers from Ateme, Liberty Global and ITV, we discussed the challenges and how the industry might overcome them.

So what are the challenges in the TV, video & advertising market in Europe? According to Dataxis, there are three challenges:

  1. TV advertising revenues in Europe have been stagnating over the last decade.

The value is constant: between 20 – 25 billion euros generated per year. And things only got worse with Covid-19, which caused a sharp decline in 2020. We expect a slow recovery – with a return to the levels of the last three years not before 2025.

  1. Pay-TV operators’ ARPUs (Average Revenue Per User) are going down.

While the number of pay-TV subscribers has been increasing gradually every year, the new subscribers are mostly joining new OTT digital services. This means new consumption patterns are becoming more popular. Viewers expect more and more video-on-demand. The market is going towards a more personalized viewing experience and more content selection. And while that’s an exciting change, it is putting pressure on ARPU. In fact, OTT services are generally cheaper than pay-TV offers. That explains at least in part why the total ARPUs in the market, including OTT services, have been losing on average 30 cents per year since 2015.

  1. Competition in digital video markets is intensifying.

Subscription video-on-demand should reach around 130 million subscribers in Europe at the end of this year. Yet opportunities for price-driven revenue growth are limited. In central and Eastern Europe, for example, there is a clear preference for free content supported by advertising. And ARPU is one-third of the Western European level. And while total advertising video streaming revenues are still progressing, competition between operators is very intense. More than 180 platforms are now operating across Europe. Many of them operate a hybrid business to attract more viewers.

So given all these challenges, how can streaming service providers pull in more revenues?

That’s what we discussed in the panel. And we agreed that targeted ad insertion (DAI) and personalized TV can help new media providers meet these challenges and generate an impressive ROI.

You can view the recording & download the presentation here.

 

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