MSOs Turn to Advertising to Make Money
As they continue to dominate the TV Everywhere (TVE) market, multiscreen operators (MSOs) are beginning to brainstorm ways in which they can profit from such multiscreen service offerings. While the market is a perfect answer for the rise of mobility amongst consumers, building such infrastructure was no easy task. Providers are now looking for ways to recoup their expenses.
The fact that consumers are already paying providers for their services—and because they expect those services to work through their Internet-enabled devices—MSOs are smartly uncertain as to whether they can rely on their existing bases to shell out more money to access TV Everywhere content. With that in mind, MSOs are turning toward their advertising partners, hoping to leverage dynamic ad insertion (DAI) technology to bring in revenue.
For example, Comcast recently announced a partnership with an ad agency that would specifically target viewers who were watching programming through devices other than traditional television sets. Under the multiyear contract, the MSO will leverage the agency’s DAI technology to insert targeted advertisements into both live television channels and on-demand programming.
Proponents of DAI technology suspect that about $200 million of revenue will be generated via similar partnerships in 2014. And as they continue to gain momentum, the market could very well eclipse $1 billion in the near future.
It remains to be seen whether consumers will tolerate advertisements on their mobile devices, but as these kinds of platforms are clearly formidable, with mobile devices becoming more and more common, MSOs are wise to form these partnerships and examine what kind of return on investment they generate.