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Paying to Watch Ads with HBO Max

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I recently signed up for the HBO Max AVOD subscription for $9.99 per month to see what the advertising user experience is like. HBO Max built most of the technology from the ground up (including the packager), and I was very curious to see how things would perform. To be honest, I was disappointed. 

Disappointed, because I try to be critical of information that comes my way from vendors or media companies, but I had to agree with the pitch from HBO. I couldn't easily spot the ad breaks, they weren't where I expected, and the ad load is pretty light compared to other services. 

"The feedback we've had since launching is a lot of people are saying they don't really notice the ads that much," says Euan McLeod, VP of customer experience engineering for HBO Max. "We're trying as much as possible to not interrupt the playback experience and make the ads seem part of the experience." 

Here's an edited version of my conversation with McLeod, in which we discussed the packager, time-to-first-frame for SVOD, and optimizing all of the components from ingest, encoding, packaging, and stitching. 

How does HBO Max use server-side ad insertion (SSAI)?

When a piece of content is requested, we dynamically generate a new manifest with ads stitched in. We make a call to the ad server, which places advertising based on the available breaks that we've provided. 

The stitching and the response from the ad server become critical. We want to give viewers maximum quality in terms of resolution, bitrate, and zero fatal errors. We might sacrifice a little bit on time-to-first-frame to get a higher-quality experience. 

What sort of personalization or contextual targeting do you offer?

It's based on different categories of customers, and I can't go into much on what each category might be. Depending on some of your demographics, we will insert ads that are relevant to you. [This can] also be based on your viewership profile and how much content you've watched in the past. 

We also have rules around kids' profiles. We always bring up an ad bumper in front of all of our ads to make it very clear to the child or the minor that this is an ad break.

Do the ads play at the same bitrates as the content?

Sometimes they do, and sometimes they don't, so we have to re-encode and package the ad breaks because if there was even a slight difference between the frame rate of the ad break to the programming content, that can cause problems.

Was this a greenfield project? 

The majority of it was built in-house within WarnerMedia and HBO Max. The reason for that is video delivery is the core to what we do from an engineering perspective. We own as much as possible, so we can adapt quickly if we face any customer feedback or challenges. 

How long did AVOD development take? 

It's just over a year ago that we launched HBO Max, and this year, we launched AVOD. With advertising, you have to announce a date so that the agencies and advertisers can pre-purchase or budget. [AVOD] was delivered in the space of 4 months. The most challenging part was to get advertising to work on the full plethora of platforms and devices that we support. They all have their own intricacies and technical challenges, format constraints, etc. 

What about measurement?

We have our own real-time analytics measuring buffer rate, rebuffering, time-to-first-frame, any interruptions in the video, and any playback issues. 

We've got such a large customer base for SVOD, we can see very quickly if AVOD is having any degradation in service versus SVOD. We have not seen that, by the way, but we would notice that immediately, because we would compare a manifest that doesn't have ads in it to a manifest that does.

What are you looking for in that measurement?

By looking at the user interaction, we should be able to optimize so that we know what is valuable and relevant to our customers. I would like the ad ecosystem to be able to build more insights into what people actually want to see. [That information] is not going to be sold; it's for us to actually have a better understanding of our customers. 

What about quality assurance (QA)?

We use the same tools to QA ad-supported and non-ad-supported content. We built some of our own tools, but a lot of it is actually manual QA on actual devices because that's the best way to QA everything using human eyes and human ears. 

How do you determine ad-break placement?

Our job is to shine a light on the content that the best creators in the world create for us. There's no point having an ad break somewhere that is really jarring to the narrative of the story. We did have instances where our ad breaks were probably not in the most optimal position, so you have to come back and recondition the asset to move the ad break somewhere that's less interrupting.

Do you use SCTE markers or something else?

We can put ad breaks or ad markers anywhere we want and dynamically choose which ones to use. We optimized our ad conditioning based on lots of criteria that are not the same as broadcast television. 

Another reason we've gone back and reconditioned the content is because, let's say you pause your video playback, and 2 days later, you go to that piece of content. If there's an ad break like a minute later, we will skip the ad break so you don't get an interruption as soon as you start playback. 

We can select dynamically which ad breaks to use and which ones not to use based on viewership, where you've paused, or as a reward if you've binged 10 episodes of a certain show. We've got lots of things we can leverage because we went and reconditioned everything. 

We wrapped up the interview, and I went to work looking for commercials. For the most part, the ad experience was exactly as described. It wasn't invasive, everything worked (although there was a weird hiccup on the web version where the ad would consistently start twice, but when I went to an app, the problem disappeared), and, occasionally, the ads were so short that I really didn't mind the brief break. Plus, I got to stream content I really enjoyed, saving a few dollars doing so. My spouse, however, got frustrated and said that he was seeing too many ads. But he's also the second person on the HBO Max account, and therefore was seeing different ads than I was. For instance, he got a 1-minute pre-roll before one show, whereas I got 15-second ads on my content. Feature or bug?

While there's a lot of innovation going on behind the scenes, the viewer is still paying for ads, and this may end up being too much to ask, regardless of how many technical solutions are put in place to make the experience great. It's a fine line, and time will tell if this is the right approach.

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