How can targeted advertising make time-shifted viewing a revenue source for TV operators and broadcasters?

In recent years, more people have been changing the way they watch TV. They’re using something called time-shifted TV (TSTV). This means they watch TV shows at their own time using services like catch-up and network recording. This way of watching TV is becoming more popular all around the world.

For example, in the UK, people spend an average of 30 minutes each day watching time-shifted TV, which is about 15.6% of their total TV time. In the United States, people watch about 3 hours and 27 minutes of time-shifted TV every week, while they spend 26 hours and 5 minutes watching live TV. In France, in 2019, 7.8 million French people used catch-up services to watch shows, which is 13% more than in 2017. These numbers have likely gone up even more because of the Covid-19 pandemic.

As more people use time-shifted TV, the technology behind it has also improved. It started with things like VHS tapes, then came PVRs (Personal Video Recorders), and now we have cloud PVR solutions like the one made by Broadpeak. But one thing that hasn’t changed is that people still don’t like watching commercials, and this causes broadcasters to lose money.

New way to deal with this problem

Instead of just fast-forwarding through ads, we can use something called targeted advertising. This helps broadcasters make money without annoying viewers.

By using the right targeted advertising technology and a mix of client and server-side ad replacement and insertion, TV operators can show time-shifted TV with fewer ads or even no ads at all, and they don’t need to change the content. This lets operators offer different pricing options, like paying for an ad-free service or watching some ads to make the service cheaper. This is something a lot of people are okay with, as a recent survey showed that 53% of people are willing to watch ads to lower the service price.

The best part is that this solution doesn’t depend on the regular ad slots in TV shows. Ads can be put into recorded content without changing it. The usual pre-roll ads are still there, so there are more ads available overall. Event-based advertising, where ads show up when viewers do things like fast-forwarding or pausing, is another way to target ads. Advertisers like this because they know viewers are paying attention when these ads show up.

A winning formula

The introduction of targeted advertising in time-shifted television is a win-win scenario for various stakeholders in the broadcasting ecosystem.

Time is Money: the hidden revenue potential of time-shifted viewing
Time is Money: the hidden revenue potential of time-shifted viewing

For broadcasters, it presents an opportunity to monetize content beyond its initial transmission, while also offering advertisers a highly rewarding means of audience segmentation. This is a significant attraction gaining momentum across the industry.

Operators, on the other hand, benefit from increased ad inventory and can extend valuable advertising slots to advertisers, opening up the potential for further revenue growth without alienating viewers with low ad tolerances. This approach is cost-effective, as it doesn’t require investments in costly on-premises or domestic equipment for subscribers. Instead, it can be implemented as part of operational expenditure (opex). This additional revenue stream allows operators to offer viewers more features and services at the same price or even lower their tier pricing, enhancing the overall value proposition.

For advertisers, this development provides access to a growing segment of viewers who engage in time-shifted television. Targeted advertising for time-shifted viewing, whether as pre-roll or conventional mid-roll slots, extends the reach of their advertisements. Advertisers can ensure their ads are actually watched, particularly pre-roll, which is often designed as “unskippable” by major SVOD providers and has gained consumer acceptance. Event-based advertising offers additional certainty that the viewer is actively engaged with the content during ad placement, further enhancing the effectiveness of campaigns.

Extending campaigns into the catch-up window offers advertisers flexibility for real-time campaign optimization, maximizing revenue growth.

As for viewers, they are likely to approve of this development. With fewer ads, thanks to targeted advertising, viewers are more engaged with the ads they do see, as the content is more relevant to their interests. This improvement in user experience and a reduction in ad load can lead to higher retention rates.

Furthermore, the ability to access ad-free services through a paid subscription, along with various options in between, adds value to the offering. This can increase viewer retention and reduce churn, as well as contribute to improved GDPR opt-in rates, as viewers appreciate the control and customization offered by these services.