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BluSpot by Blu Digital Group

Disrupting SVOD: Why AVOD makes sense

5 minutes

Netflix lost subscribers for the first time since 2011 in the first quarter of 2022, and the streaming giant has rung alarm bells across the streaming industry for what is to come. There are only so many consumers willing to pay for monthly streaming subscriptions, and now that there is a direct to consumer service from almost every major content owner, it is clear SVOD services need to evolve as they are left with going after consumers who don’t want to pay for premium content but want to be entertained. Adding advertising as part of a video platform’s offering is the next step for the streaming industry as the shift moves from purely subscription growth to also include revenue growth through other means.

With inflation high and the pandemic-induced surge of subscriptions showing signs of waning, more major media and tech streaming companies are offering viewers a deal: exposure to ads in exchange for lower prices. Netflix is the latest SVOD giant to realize consumers’ streaming habits are evolving and households need other options other than costly subscriptions to consume content on the multitude of direct-to-consumer platforms that are on offer.

Advertisers are looking to sell their inventory on AVOD platforms too, as they want to reach a growing population of cord-cutters and cord-nevers. According to recent research by Insider Intelligence, 18% of agency buyers are looking to reduce their spending on linear TV. OTT video advertising is considered to be more efficient and less wasteful compared with traditional TV because it is addressable and audience-based.

The Challenge – Poor Ad Placements

The question for content owners is how to scalably insert advertising breaks into their large catalogs of content, and make the experience as enjoyable as possible for viewers. The challenge is to keep audiences from switching to another service or switching off completely due to poor advertising insertion points.

While AI and machine learning (“ML”) software or applying programmatic rules (e.g., ads every 7 minutes) can be applied at scale to large content catalogs, the results are commonly a poor viewing experience which can ultimately lead to losing viewers forever. As an example, while the promise of AI/ML for translation is breathtaking, the output produced today can result in the majority of the subtitles and captions created being sub-par and often not standards-compliant. When it comes to ad breaks, computer intelligence has yet to master items such as the context in dialogue (e.g., the “cliffhanger” moment), editorial rhythm (e.g., editorial scene change on a close-up to a wide shot), and the most sensitive issue of cutting around music cues.  

North American adults use 8.75 TV services. Of those, respondents had an average of five paid services and 3.7 free services.. There is clearly an appetite for ad-supported content from consumers.

According to Tivo’s Q2 2021 Video Trends Report

Smart Ad-Marker Detection with Enhanced Validation

As a hybrid solution, Blu Digital Group created its BluSpot™ ad-insertion software for content owners that want to provide a quality user experience when presenting ads in the middle of programming. At Blu, we know that the process of validating ad-markers takes skill and needs consideration around context and scene changes – emulating what those who went to film school learned (or any lover of cinema and TV). 

BluSpot is a workflow enhancement tool to help operations teams work faster, scalably, and all from a web browser. Using technology including AI/ML, BluSpot finds ideal spots to insert ads –such as scene changes, black frames, silence–and provides users with non-linear editor system keyboard shortcuts that help guide the operator quickly towards planning an insert of an ad break.

4x Faster with BluSpot

We have found it is up to four times faster to put ad breaks into a two-hour feature film using BluSpot by a trained user than having to manually verify what an automated system spits back through standard AI/machine learning software. Additionally, BluSpot automates the validation of the many AVOD video platform rules for delivery as well as handling the conversion of the ad spots into timecodes, frames, or seconds and milliseconds based upon the format required by the video platform. And BluSpot can integrate into almost any existing project management software, giving the option to integrate into a wider workflow that may involve a distributed workforce.

BluSpot by Blu Digital Group

As SVOD services start to evolve their AVOD offering, consumers will have even more choices of services to watch and streaming platforms will be chasing after viewers while maintaining revenue. Content owners will need to decide how they are going to prepare their content catalogs for ad insertion. There is nothing wrong with using pure AI and machine learning solutions to do this, but if the user experience is paramount to the content owner or a video platform, a human is going to need to inspect the ad insertion points. BluSpot is the tool that makes it easier, scalable, and faster to deliver high-quality ad breaks. 

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