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Online Video Publishers Take a Hard Pivot at 2017 Newfronts
This year's newfront presentations marked a shift in thinking by online video publishers. They're not going to create series that win against Netflix, so they'd better focus on what works.

Ideally, there’s a flurry of activity after newfront presentations, as publishers and advertisers rush to sign deals. This year, there was a flurry of activity before they even began.

That’s because several presenters who were scheduled to give newfronts dropped out, and a few others rushed to take their places. It wasn’t quite what the Interactive Advertising Bureau (IAB, the group that administers the two-week newfront season) would have liked to have happen.

A little background: Modeled on TV upfronts, newfronts are industry events when online publishers present their upcoming video series to agencies and advertisers in hopes of getting ad commitments.

Newfronts provide a useful milestone to examine where the online video industry is at. This year, it’s chaos, but that’s just a pivot, as publishers learn what works and what doesn’t.

Some of the biggest video publishers around were newfront no-shows this year. BuzzFeed, Machinima, and Yahoo dropped out. StyleHaul and Playboy didn’t return this year. NatGeo cancelled and instead held a combined TV and online “Future Front.” AOL and Fullscreen traded a big showcase for quiet presentations with key advertisers. Filling the void, a few newcomers like Twitter and the BBC jumped into take empty slots on the schedule.

There’s a temptation to explain the flurry of changes with a simple theory, and several media sites have already done so. MediaPost blames the rise in programmatic advertising: With automated systems handling much of the online video ad market, there isn’t as much need to woo agencies. The Wall Street Journal says the problem is the lack of scarcity and urgency in online video ad buying; it’s a different market than TV.

But there are clearly several factors at play here. Both AOL and Yahoo are now owned by Verizon, grouped under a new division called Oath. That made newfront season the wrong time for a big splashy show. Only at Cannes Lions in June did Tim Armstrong, Oath’s CEO, formally unveil the company, stating its mission to have a pool of 2 billion viewers by 2020 and positioning its 50-some properties as an alternative to YouTube and Facebook.

Programmatic ad buying is certainly a part of it. Buying hot shows is a necessity on TV, but online advertisers more often chase a demographic than a specific show.

But I think the biggest reason is a shift in our understanding of what works in online video. In the early newfronts, online was a way for TV stars to find a home for pet projects. AOL and Yahoo dazzled buyers with celeb-filled presentations. But that TV way of thinking didn’t translate to online viewers who are younger and prefer to find their own, more authentic stars. Many series announced at previous newfronts never got made because of a lack of sponsorships.

The industry is a little older now, and a lot wiser. When people stream video to their TVs, they mostly stream from Netflix, Hulu, and Amazon. That’s good news for Hulu, the only one of those three to take ads. On mobile and desktop, people like fun, snackable videos that friends have recommended, which is why Facebook is such a video success. What people don’t watch are online series from publishers.

Experienced online publishers have pivoted to snackable content, and they don’t need a newfront to present it. They’re targeting teens and tweens, the only audience that seems to matter to buyers. Social platforms are grabbing distribution rights for any sports leagues they can, no matter how niche.

Smaller publishers still focus on online series, but they’ll learn what the bigger sites have already figured out. This year, every newfront presenter highlighted that it was brand-safe, a lowest-common-denominator approach that simply means “proximity to our content won’t actively hurt your brand.”

It’s a transitionary time and it’s not over yet. Advertisers will pay attention to see what people actually watch and what’s just hype. But what they really want is for Netflix to create a lower-cost tier with ads. Now that’s a newfront presentation they’d love to attend.

[This article appears in the July/August 2017 issue of Streaming Media Magazine as "AV1: Follow the Money."]

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