Author Archives: Chris Broussard

The backbone of our Connected Society thematic, and to some extent our Content is King thematic, is the speed at which individuals around the world can connect to the internet. It impacts everything from the security and speed to browsing and processing online transactions, to the ability to stream movies and other digital content.

For that matter, internet access and high-speed internet access have become as critical to the Rise and Fall of theMiddle-Class thematic and the evolution of emerging markets as clean water, food supply and education.

We look to this annual State of the Internet report from Akamai each year as a confirming data point that the spread of high-speed internet access is on-going. Of course, we aspire to the fact that it’s children of the world downloading education videos and adults shopping for digital books on economics, religion and philosophy . . . but we know that it’s probably just more people keeping up with the Kardashians.

“The continued increase in average connection speeds is a reassuring trend as online retailers prepare for the busy holiday shopping season,” said David Belson, editor of Akamai’s State of the Internet Report. “However, recent Internet disruptions caused by everything from government-ordered blackouts to a lone monkey sparking a widespread outage are reminders of the many factors that can affect access to and use of the Internet that is so often taken for granted.”

Highlights from Akamai’s Second Quarter, 2016 State of the Internet Report:Global Average Connection Speeds and Global Broadband Connectivity

• Global average connection speed decreased 2.3% from the first quarter of 2016 to 6.1 Mbps, a 14% increase year over year.

•Global average peak connection speed increased 3.7% to 36.0 Mbps in the second quarter, rising 2.5% year over year.

•Global 10 Mbps broadband adoption rate grew 0.7% quarter over quarter, but 15 Mbps and 25 Mbps broadband adoption rates fell 0.8% and 2.1%, respectively.

Source: Global Average Connection Speed Increases 14 Percent Year over Year, According to Akamai’s ‘Second Quarter, 2016 State of the Internet Report’ – Yahoo Finance

Yesterday, the CEO of NBC Universal revealed that even though the numbers were down, the Olympics still brought in a hefty haul for the Peacock.  Why? The Olympics bring out the endangered species — a live audience. And by “live”, we mean living breathing people sitting and watching a TV without fast-forwarding through commercials.

And so, while the total number of viewers was down, and down considerably compared to the London games, for NBC it didn’t matter because for delivering advertisers a unique, rare audience, they were able to charge a hefty premium. In particular, Olympic coverage attracts an audience that doesn’t typically watch sports — which is hard to find in this age of DVR’s, stream on-demand and social media clips.

Speaking Wednesday at the Bank of America Merrill Lynch Media, Communications and Entertainment Conference, NBC Universal CEO Steve Burke characterized the Olympics as a “tremendous success,” adding that the company “made over $250 million in Rio,” thanks to a 20% increase in ad sales volume compared to what it took in during the London Games.The Rio cash surplus more than doubled the $120 million NBC pocketed four years ago in London. Mr. Burke noted that the profit marked a stark contrast versus the NBC-produced Olympics of yesteryear, when the network would lose as much as $200 million on the 17-day event.

Source: NBC Makes $250 Million Profit on Rio Olympics | Special: The Olympics – AdAge

200+ cable channels, DVR’s, streaming content, chord-cutting . . . the list goes on and on as the reasons for declining audience levels. The one hold-out is the NFL gridiron, which seems to have been able to resist the trendline and drive large, live audiences.

While the first Clinton-Trump debate of 2016 could bring in large numbers, it’s more likely that many will watch it via streaming audiences, or just watch the live / taped clips streaming across Twitter and Facebook Live. Gone are the days of the nightly News, must-see NBC Thursday nights, and frankly anything other than NFL and College Football games that will bring an audience. The reality is that of the Top 20 broadcast TV events of all-time, all but two are NFL games. The two outliers:  the Cheers Finale from 1993 at #20, and the finale of M*A*S*H in 1983 at #8.

With the recent trend line of the Super Bowls hitting the top line numbers each year, we would expect this year to be the Final Call for Cheers on this list — sorry, Sam, but it’s time to turn the sign to Closed.

So in nearly 25 years, only two shows have drawn larger numbers than NFL games, which is why the league is able to command such large dollars for audience-hungry advertisers — advertisers that don’t seem to have figured out how to market and advertise their products and brands outside if the boob-tube. We’re talking to you Ford (F), Chevy (GM) and McDonald’s (MCD).

Part of the enduring appeal of “Sunday Night Football” lies in its unmatched reach in primetime. According to Nielsen live-same-day data, last season’s Sunday night slate averaged a staggering 22.5 million viewers and a 13.0 household rating, which marked a 5% increase from the prior season. Whereas every high-profile scripted series last season suffered significant ratings erosion — TV’s top-rated drama, “The Walking Dead,” saw its C3 numbers drop 15%, while the No. 1 comedy “The Big Bang Theory” fell 14% — “Sunday Night Football’s” growth suggested that the NFL may well be the last remaining TV property that is immune to the ravages of time-shifting/cord-cutting/millennial drift/Netflix-and-chill.

Source: NFL Ad Rates Soar to Record Levels | Media – AdAge

While 4K TV sales are dominating the shelves these days, there isn’t much 4K content on those TV’s . . . Sony is looking to change that in advance of the holiday season . . .

On stage, Cerny showed off actual 4K game footage from games like Spider-Man and Deus Ex: Mankind Divided, not just 4K video running through the PS4 Pro. Cerny noted that the PS4 Pro was able to pull new detail out of the scenes from these games, even though they were developed for the original PS4. But he went on to say that select PS4 games will have improved graphics to take full advantage of the the PS4 Pro.

Source: Sony announces PlayStation 4 Pro with 4K and HDR output | The Verge

Tomorrow, September 7th is the anticipated launch of the iPhone 7. We have to say anticipated because Apple hasn’t officially said its planned event is for the launch of its latest iThingy. Of course, everyone knows it’s going to be the launch of the 7, so this dance is starting to get a little old, to say the least.

We could go on and on, but, anyway . . .   Another “anticipated”, but not confirmed — but everyone knows about it — component of tomorrow’s event is the update to Apple’s streaming music service, amply called Apple Music. There is a host of new features expected (oops, “anticipated”), but most important are the new offer — $99 for 12 months, which undercuts the cost of industry-leading Spotify and it’s 30 million users. While Apple has seen it’s numbers increase, last reported to be 13 million in April of this year, it hasn’t been able to catch-up with Spotify’s numbers.

It’s said in business school that there are only three ways to compete:

1. Service
2. Features
3. Price

Seems like Apple is pulling the lever on #3 to see if that will propel it to #1. We’ll see.

To further differentiate itself, Apple Music is slashing its price. Apple is selling 12-month subscriptions to the music streaming platform for $99 via gift cards, bringing the monthly cost down from $9.99 to $8.25.

Source: Apple (AAPL) iPhone Sept 7 event: What to expect from Apple Music — Quartz

Commercials. No Commercials. That’s the headline of this article. It’s what’s below the headline that caught our attention, where it refers to CBS coming out with original series programming, including what appears to be a brand new Star Trek.

Taking a page out of the Amazon (AMZN) and Netflix (NFLX) playbook,  CBS is embracing a future of its programming that might not be broadcast-only, and the Star Trek franchise is a perfect platform for taking its All Access service to the next level in terms of participation. Announced last November, the new deep space “The new series will blast off with a special preview broadcast of the premiere episode on the CBS Television Network, and the premiere episode and all subsequent first-run episodes will then be available exclusively in the United States on CBS All Access.”

CBS All Access’s on-demand programming includes more than 7,500 episodes from shows like “Blue Bloods,” “Madam Secretary,” and “The Odd Couple,” as well as late-night and news content. CBS All Access’s upcoming original series, including an installment in the “Star Trek” franchise, will also be available through the commercial-free plan.

Source: CBS Launches Commercial-Free Streaming Option – WSJ

NBC is obviously scrambling to someone justify the 30% drop in viewership of this year’s games versus the London games just 4 years ago. 3.4 billion minutes of streaming is certainly impressive — and expected, to say the least considering the elements of the Connected Society thematic — but how much revenue did those minutes generate?

The struggle internet companies have dealt with since the bubble — how to monetize eyeballs — is the same reality for networks trying to generate enough revenue to cover the enormous rights fees being paid for the Olympics and major sports leagues. For our money, the power of the streaming experience is two-fold: individualized experience (meaning they know which set of eyeballs is watching the video) and location-based targeting (they can tell pretty closely where you are while watching).

According to NBCU, nearly 50 million viewers streamed 3.4 billion minutes across the web and on mobile and connected devices, with more than half of streamers under the age of 35. That compares with almost 200 million viewers in aggregate who watched the Games across NBCU’s TV networks during the 17 days of coverage.

Source: NBC Argues Millennials Did Watch the Olympics—Just Not All on Traditional TV – WSJ

Even the Olympics can’t overcome the shifting media consumption habits . . .

So far, NBC isn’t delivering the audience it promised advertisers who spent more than $1.2 billion for commercials during the 17-day event. Of particular concern is a roughly 30% drop among viewers age 18-34, a demographic advertisers pay a premium to reach. The lower-than-expected ratings show that even an institution as big as the Olympics isn’t immune to changing media consumption habits and the abundance of choice viewers have on television and online.

Source: NBC’s Ratings for Rio Olympics Fall Behind London – WSJ