Connected TV Category
Getting Back to Our Roots with the Embedded SDK
Yesterday was an exciting day for YuMe. It was a day we went back to our roots. You may not know this, but before we created our advertising technology platform, ACE, YuMe launched in 2004 as an IPTV company. Our first product enabled people to download and watch movies directly on their TV:
YuMe, like online video, has come full circle. It started with television, and then moved to the computer screen, then to mobile phones and tablets. Now seven years after our first IPTV box, we’ve announced the Embedded SDK and established our position as the operating system for TV 2.0. The YuMe Embedded SDK is the only video advertising platform to be built directly into TVs, Blu-Ray Disc™ players, and other connected devices.
For advertisers, this means access to consumers at every stage of interaction with the TV. Even as consumers’ attention continues to fragment, advertisers can maintain a presence on every screen on which video is being watched. For publishers and CTV app developers this means even more access to TV brand dollars, enabling them to maximize revenue and simplify their ad serving and management. And because the Embedded SDK is built into the firmware of the TV, CE manufacturers can easily integrate with ACE for Publishers and the Connected Audience Network, and finally participate in the advertising value chain of television.
What makes this announcement even more exciting is that we’ve secured the support of one of the most innovative automotive advertisers, Toyota. Through their participation in this important launch, they’ve proven the value of this fast-growing channel for video—a channel in which we’ve helped participated and innovated since the beginning.
We’ll be making several exciting announcements about our Connected TV products in the coming months. Check out our News Page for updates!
Content Snackers Become Cord Cutters and Are Changing the World as We Know it
An article penned by our SVP of Emerging Platforms, Frank Barbieri, appeared in TechCrunch today and is also featured below.
Every five or so years for the past two decades the introduction of an Internet connect
ion to a new device type has created a boom in disruptive businesses.
Most of these booms – computers followed by mobile phones, and then gaming consoles and now tablets – have been clearly successful. Others (remember the Network Computer?) have been ill-timed.
Now manufacturers, and a growing ecosystem of partners to support them, are betting big that consumers are finally poised to accept an Internet connection in their most cherished living room technology mainstay, the television. Players from Samsung to Sony are bringing the so-called ConnectedTV (CTV) to market in mass, and you’ll see a big push this holiday season. There are already upwards of fourteen million CTVs in North America and sixty five percent of TVs sold in 2012 will be CTVs.
With every platform change new companies and nimble traditional companies have lined up to try and capture a share of the redistribution of rewards that inevitably comes when consumers change their habits. North American television advertising is certainly no exception as a host of companies, old and new line up to try and capture their share of that $62B annual advertising feast.
While there has been some preparation to date, incumbents have an incredibly hard time cannibalizing established revenue streams for growing, but yet to mature, new revenue streams. We’ve seen this with everything from books to brokerages. And in the TV world, we are seeing it on display with the recent stutter of Hulu, the pioneering archetype, catching arrows in their back from erstwhile incumbent partners as they bravely forge ahead.
Such is the nature of distribution when the business advantage is built primarily on pricing and bundling, and carefully restricted access, not on real consumer demonstrated desires and behaviors.
Technology has always been on the side of the consumer, especially in the realm of television viewing. You may not remember now, but broadcasters bitterly fought the arrival of cable in the 70s.
And while it seems absurd now, given it has created hundreds of billions of revenue, studios fought against the arrival of DVDs in the late 90s. The early titles were a handful of B movies released by Warner Brothers in conjunctions with Toshiba. It was all Toshiba could get at the time.
We may be seeing another disruption today. With a new wave of CTV content applications, the pricing and access advantage of cable television may dissipate. Imagine downloading a TNT program application directly from Turner rather than paying a cable company for access to Turner content. Content providers themselves now, or will soon, have the tools to reach their audience directly on the big screen. Turner could pocket 100% of any subscription fee and advertising revenue rather than having to share with a distribution partner.
The traditional distribution players are betting, but not banking, on the fact that new television distribution will look substantially similar to old television distribution. They are expanding their services to include on demand viewing and hoping much will continue as before with consumers paying a fee for content bundles.
But what if that’s not the way it goes down? What if like mobile phones and the PC before them consumers choose to snack on content delivered directly to them by the content providers themselves, effectively removing the pricing, bundling and access advantage of traditional cable and satellite television distribution. In that world the power of delivery, and we’ll say advertising insertion, shifts directly to content providers, device manufactures and the ecosystem of direct Internet connected business partners they surround themselves with. In that scenario online advertising businesses have a distinct advantage over traditional distribution businesses as they are already in the market pumping billions of video ads through existing devices like PCs, mobile phones and tablets.
Sure distribution incumbents like Comcast could make IP connected set-top boxes that consumers use to access content directly, unbundled or al la carte, but that erodes their existing revenue model around cable pricing. The industry calls folks who end run cable to get their content directly from content companies, “cord cutters.” A recent Morgan Stanley report concluded that cable companies would have to double the internet access fees of so called “cord cutters” to make up for the lost revenue on cable TV packages.
There is change brewing. Years in this business and witness to booms and busts have taught all of us to be cautious of absolutist rhetoric opining the end of any particular distribution channel. Consumers have shown a remarkable ability to expand their entertainment appetites, and new consumption habits largely prove additive, not cannibalistic (except for my poor print friends of course). So be suspect of anyone who claims that all programming or advertising is going to be wholly delivered in a particular way. But the numbers themselves are so enormous, and the opportunity so large that even a ten percent swing in consumer viewing habits from cable and satelite to ConnectedTV applications and cord-cutters will represent a shift in $6.2B of advertising spend. That, to me, is a scenario worth preparing for.
Sources include GFK Market Analysis, Piper Jaffray, and DeutscheBank.
Video: The Evolution of the Revolution Roadshow
We are hitting the road next week as we kick off our 6 city roadshow, visiting Dallas, LA, San Franciso, Detroit, Chicago and NYC. We will be unveiling research conducted with Frank Magid & Associates and Nielsen that addresses the impact of TV + online video and the changing video landscape.
Key questions that will be addressed include:
- What are the specific implications to a TV plan as online video is added to the mix?
- What are the latest audience trends and insights related to online video consumption?
- How best to leverage online video now that video convergence is a reality?
Below is the when and where for each market. To RSVP and learn more, click here.
| Date | City | Location | Time |
| Tuesday, January 25th | Dallas | The W Victory | 8 AM-10 AM |
| Wednesday, January 26th | Los Angeles | SLS Beverly Hills | 8 AM-10 AM |
| Thursday, January 27th | San Francisco | The W Hotel | 8 AM-10 AM |
| Tuesday, February 1st | Chicago | The W City Center | 8 AM-10 AM |
| Wednesday, February 2nd | Detroit | The Henry | 12 PM-2 PM |
| Thursday, February 3rd | New York | The W Union Square | 8 AM-10 AM |
Q2 Video Ad Metrics Report – Hot off the press
Today we released our Q2 Video Ad Metrics Report, highlighting the key trends we have seen from January through June, 2010. Some interesting findings include the following:
- Video completion rates were up in Q2 for both pre-rolls (73% completion rate) and our custom ad placements (75% completion rate).
- Females are more often targeted than men across our network and they have a higher video completion rate.
- Custom ad placements increased by 53% from Q1 to Q2 and now represents 7% of our total ad placement mix.
- 15 seconds pre-rolls still represent a significant portion of our volume at 76% of our total pre-roll inventory.
Download the complete report here. And if you have any feedback or data you would like to see added to our next report, email us at metrics@yume.com.
- Molly Glover Gallatin
iMedia Agency Summit – yee haw!
I spent the past few days at the iMedia Agency Summit in Austin, TX. It was a great conference, with the usual mix of networking, cocktails and industry learnings, not necessarily in that order.
The opening keynote by Lisa Donohue, CEO of Starcom, on Monday was interesting and I was glad to hear she agrees that we should move past the online metrics of today, like click-through rate. Her metrics of choice? Community, conversation, currency and content. Guess we will need to figure out how to measure this?? Doug Weaver, the co-founder and CEO of Upstream Group, gave an entertaining keynote on Tuesday on “Dead Internet Ideas.” My favorites “dead” ideas were: (1) Optimizing Click Rates, (2) Blind RFPs and (3) Worshiping at the altar of advertising. Jodi Harris of iMedia did a nice recap that you can check out here. And the biggest highlight of the conference, of course, was the opening night party we threw with mouth watering Texas BBQ and a mechanical bull!
MicroHoo Theatrics
According to yesterday’s NPR Marketplace “Microsoft refines search for Yahoo deal” edition, YuMe may have a role in the latest Microsoft Yahoo theatrics!
Bob Monroe, associate professor of computer science at Carnegie Mellon University, sees huge potential in developing the next generation of ads – “if they [Yahoo-Microsoft] could find a way to target video ads — the way Google currently does targeted keyword advertising, to actually insert different ads for different viewers [exactly what YuMe does!] — that’s where I think there’s a really interesting opportunity. But nobody’s really figured out how to do that right yet.”
We’ll be reaching out to Yahoo-Microsoft and Prof. Monroe to make sure YuMe is included on the latest negotiations!
- Rosanne Vathana 
