Viewpoint: Live Streaming With Ad Insertion Works!

The summer of 2016 has long been expected to be a breakthrough moment in the evolution of live streaming. Many experts believe the 2016 Summer Olympics is where that will happen.

The first event to break streaming records was the pan-European UEFA Euro 2016 soccer tournament. The next big sporting event is the 2016 Summer Games in Rio, where Akamai predicts online traffic peaks of 15-18TB per second, compared with 1TB at the London 2012 Summer Olympics.

There are a several factors behind this predicted substantial growth. One is that there simply are many more live streaming services are available today than were four years ago. This is due to the healthy appetite among online viewers for live television.In 2012 it was largely assumed that live was taking the lonely road to extinction due to the emergence of catch-up / on demand services. However, this has not proved to be the case.

Monetisation

For any service to succeed, a healthy monetisation model is essential. Without it, content owners will be less inclined to make live channels available online. It’s no coincidence that the growth in deployments of live streaming services has gone almost hand-in-hand with the rise of server-side ad insertion (SSAI).

Also known as ad stitching or dynamic ad insertion, SSAI enables publishers to stitch their video and ad content together at the CDN level rather than on the player level. So why does that make a difference? Because ad blocking software is effective only at the player level. SSAI prevents ad blocking because the content arrives at the browser complete with the ad in place. It cannot be blocked. The ads get seen.

SSAI has dominated headlines since Apple allowed ad blocking apps when iOS 9 was launched last September. With SSAI’s ability to stitch ads before the stream reaches the player means the down side of ad blockers can largely be avoided.

Yospace’s first server-side ad insertion project for live content was first shown back in 2011 and adoption has grown steadily since then. The reason is simple, it’s the only realistic way to monetise a live stream.

Ad insertion technology

Ad insertion for live requires that ad breaks begin and end at a definitive point, unlike on-demand, which doesn’t require such precise timings. If you watch a client-side ad break in long-form VoD, you can expect to see a small amount of buffering as each ad loads and then transitions back to the underlying programme.

Buffering caused by client-side ad insertion makes frame-accuracy cuts difficult to achieve in live streams.

Buffering caused by client-side ad insertion makes frame-accuracy cuts difficult to achieve in live streams.

Typically the buffering won’t last long, but in a live streaming environment it’s enough to disrupt the user experience. It’s important to remember that viewers have a reference point when it comes to live streaming: that of seamless linear television, so buffering is perceived as more disruptive with live streaming than it is on VoD.

Server-side ad insertion allows ad breaks from the original linear feed to be replaced when viewed online in such a way that the viewer does not notice that any change has taken place. In other words, the user experience with streaming becomes the same as with linear television.

By implementing ad insertion in live streams, the content owner is able to open up additional online inventory that it was previously unable. By implementing SSAI, assuming the technology is applied correctly, the result is a frame-accurate and seamless user experience akin to that of traditional linear television. When the user experience meets expectations the result is a willing audience that is happy to sit back and be fed content, including ads. This is why live streaming has been gaining so much attention.

But that’s not the end of the story. The next step is where the real value lies, and that’s personalisation.

Personalisation

When it comes to advertising, online streaming has a big advantage over traditional linear TV; viewers tend to watch on their own individual screen. If you apply advanced targeting in such an environment, then the results can be exceptional. Content owners are able to command a far higher CPM for personalised ad insertion online than they can anywhere else.

Viewers tend to have their own screen when viewing online, allowing for personalised advertising.

Viewers tend to have their own screen when viewing online, allowing for personalised advertising.

The result is that inventory opened up by server-side ad insertion for live streams with personalisation is more valuable than its equivalent on linear. The realisation of this fact has had a great impact on content owners and explains why many are keen to prioritise live streaming over VoD / catch-up services.

There’s a lot more to come from targeted advertising, too. At the moment a selection of adverts can be chosen for each individual viewer, but the pool of ad creatives to choose from is limited, meaning that viewers who share certain characteristics – for example, age group, location, gender – may well be served with a similar selection of adverts.

A fully programmatic solution, whereby each viewer is served with an ad creative that is personal to them, has been described as the Holy Grail of broadcasting.While we’re not at the point of fully programmatic selling for live streaming yet, we’re certainly on the right path.

Image source: Coke-Cola

Image source: Coke-Cola

A marker of what’s possible was Coca-Cola’s ‘Share A Coke’ campaign, run in partnership with UK broadcaster Channel 4, during which coke bottles were personalised on screen with the viewer’s name.It’s only a matter of time before advertising and broadcast technologies make the breakthrough to deliver such a service in live streams at mass scale.

More content

With such a compelling business case, rights-owners recently have been able to explore ways to further engage their online audiences. In 2014, Australian broadcaster Network 10 deployed six online-only channels for its coverage of the 2014 Winter Games – all using server-side ad insertion. The ease with which they were able to set up online-only channels set a marker for what was to come.

Two years on and some providers, including NBC and BBC, have committed to live streaming every event at this year’s Summer Games. This represents a commitment which will see hundreds of hours of sporting content accessible exclusively online.

With an easier route to market, of course, comes competition, and there is a significant threat from the major online players.

Broadcast rights are key

Live television has long been the exclusive domain of traditional TV providers, but that represented a viewer environment far different from what we have today. Last year Comcast President and CEO, Neil Smit, revealed that the number of the company’s internet subscribers had surpassed the number of cable subscribers for the first time.

The International Olympic Committee is so concerned about safeguarding its online broadcast rights that it has taken steps to ban the use of Facebook Live and Periscope in the main stadium. Despite that such a ban would be almost impossible to police, I don’t think the viewing experience of user-generated live streaming actually poses a big threat to professional broadcast-quality coverage.

Beyond the 2016 Summer Olympic Games, the traditional live streaming players are in a strong position to win future online broadcast rights.

Beyond the 2016 Summer Olympic Games, the traditional live streaming players are in a strong position to win future online broadcast rights.

However, the likes of Facebook, YouTube, Amazon and Netflix certainly have the means to commit to live broadcasting if they choose and it’s surely only a matter of time before they do. So what would this mean for the traditional providers?

The answer, as it has always been, lies in the content rights. By being first to market with live streaming and server-side ad insertion, many of these players already have a head start. The revenues they are generating through targeted advertising should ensure they are well placed when the inevitable bidding wars begin. This places them in a far better position than they were four years ago when their linear audience was being drawn away by third party VoD services.

Beyond the summer Olympics, live streaming audiences will continue to grow and break viewing records with each major event. And each occasion will be marked by another step in the development of personalised advertising technology, which in turn will increase the value of each ad spot.

The traditional providers are in a position of strength, having regained a significant proportion of the viewers they lost to the VoD pioneers. What is more, they are well placed to dominate the live streaming arena for years to come.

See the best of British technology and innovation at IBC 2016 in Amsterdam, supported by UK Trade & Investment (UKTI), in partnership with techUK management from export outreach specialists Tradefair. More information on these participating companies can be found at this The Broadcast Bridge link. Other UKTI-supported exhibitors can be found on pavilions located in prime locations in halls 5, 6, 7, 8 and 11 with the main GREAT Britain Pavilions in halls 5 and 8.

Paul Davies, Manager - Communications, Marketing, Commercial at Yospace.

Paul Davies, Manager - Communications, Marketing, Commercial at Yospace.

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