When StopPress recently asked players in the on-demand and subscription video on-demand (SVOD) market to share streaming stats on their top ten most popular shows, TVNZ was the only one that shared official numbers. And the reason for this is largely down to how successful the platform has been over the course of the last year in attracting viewership numbers.
“A great example is the cult hit Orange is the New Black, where we downloaded series one and two straight to TVNZ Ondemand, gave customers and viewers access to that first, and within one month we have over one million streams,” said TVNZ’s head of sales and marketing Jeremy O’Brien, when speaking at the broadcaster’s 2015 launch.
“Committed to engaging Kiwis’ hearts and minds with content on every screen, TVNZ’s successful strategy of premiering new and returning shows Ondemand saw a record 6.3 million streams in October 2014 alone, and resounding feedback of audience appreciation.”
O’Brien said that TVNZ would continue ensuring that using the platform as a vehicle to deliver the popular shows in 2015, but he also alluded to the impact that viewer registration would have in the future.
“With on-going investment and development into this service, viewer registration for TVNZ Ondemand will help to give an even deeper understanding of what Kiwis love, and will eventually provide new levels of insight for advertisers,” he said.
As a result of the growth in this area, O’Brien told StopPress that this is changing the orientation of the business, with its data and insights team, which has expanded from its traditional research unit, doubling in terms of staff numbers in the last 12 months.
“We hired Jono Symons earlier this year to run that. He’s got a very strong background in data and direct marketing. And he’s looking at a number of things. Firstly, it’s how we’re going to provide a better experience for our viewers, whether it’s recommendations, collections, or pause and play across devices. I think that’s really important. We’re not going to do anything with the advertisers until we get those things right first because ultimately our viewers are the reason we can talk to advertisers.”
O’Brien foresees TVNZ Ondemand functioning alongside television to provide advertisers with two complementary means by which to reach target audiences.
“As an advertiser, you can think of it like this: the most cost-effective advertising shotgun will soon be joined by a rifle,” he said.
And advertisers have over the course of the last few years shown a willingness to use this digital weapon. Last year, O’Brien said online made up five percent of total revenue, and that increased from $10 million in FY2013 to 13 million in FY 2014. This was not sufficient to offset the drop in TV’s overall share of ad spend for the latest report, but TVNZ sees ondemand as a big part of the equation for future growth.
“It’s growing at over 50 percent a year in terms of revenue,” says O’Brien. “And we think that’s growing ahead of market. And that’s matching the growth in our video streams. So as we grow the streams, we’re growing inventory and selling it.”
Just like MediaWorks, it’s aiming to maintain a premium in this space, with fewer, more expensive ads (some Ondemand space is able to be bought programmatically through Total Media).
“It’s a totally different environment, first and foremost. And the reality is, if we were to reinvent the business model around broadcast again, we’d probably have fewer ads and charge more for them. Online opens up the opportunity to create a more premium advertising environment.”
While the registration system comes with a range advantages to advertisers, it also has a few perks for the viewers.
During a promotional clip on the changes coming to TVNZ Ondemand, Shortland Street actor Pua Magasiva was depicted acting out some of the benefits that viewers would be able to access.
The most interesting change highlighted during the clip was that viewers would soon be able to watch their shows across devices and pick up where they left off on the previous device.
This essentially means that user could start watching a show on Smart TV, later pick it up on a mobile, before finishing off on a desktop. And this feature is only made possible because user habits can be tracked across devices when they log in.
“Video is everywhere, and at TVNZ we’re passionate about ensuring that our programmes are on all the screens that New Zealanders prefer,” said O’Brien. “We want to give our viewers access to content when and where they want to view it.”
And this increased focus on individual customers is also reverberating into the marketing side of the business, with the broadcaster introducing changes to the methods it uses to reach audiences.
“For the first time, we’ll have a one-to-one relationship with the viewer so we’ve bought in some direct marketing capability," says O'Brien. "In the sense of having a true multi-platform in terms of our content and always on, our PR has moved from media releases to having a true social strategy. That’s where a whole lot of PR continues to be generated. My ambition from the marketing side of the team is that we’ve got a whole of talent and stories to tell that New Zealanders are really interested in, so there’s no reason we shouldn’t be one of the biggest social media brands in this market. People talk about stars, their favourite shows, what’s been happening. So it’s not about us seeking to be friends, it’s about New Zealanders having a deeper engagement with our content and our talent, and if we do that we’re get longer terms loyalty from our customers and viewers.”
For now, TVNZ is finds itself in a good place with an on-demand offering that is both popular and increasingly profitable. But the market is becoming crowded, and there’s certainly more competition for eyeballs. There’s also more competition for rights, with some shows currently being broadcast on TVNZ now being shown online on different services. So how will that affect the free to access but ad-funded TVNZOndemand?
“Ultimately there’s only a certain amount of quality content and viewers can only view so much content, but I think what that’s doing is providing a choice. The challenge for every business in that space is what is the long-term sustainable business model. We believe the way we will compete in that space is around volume. We have the largest audiences in the market. We’re on all the platforms New Zealanders prefer. We’ve got the strength in our output deals and local programming that means we can take 85 percent of the top 100 programmes by viewership and put them into the Ondemand platform and also make some choices on which ones go first."
This approach has thus far managed to keep TVNZ in a good place, but the streaming market is still in its infancy in New Zealand. And whether the broadcaster manages to maintain this position will largely be determined by how well it adapts as the market matures.