Publishers are creating new entertainment channels as a compelling new content - and revenue - stream.

Could a more all-encompassing approach to editorial content be the answer to boosting advertising revenues?

That’s the thinking of several publishers who are flocking to launch over-the-top (OTT) channels—bypassing traditional television networks—to stream original entertainment content or broadcast shows based on their editorial content on streaming services.

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Style Out There by Channel29

Indeed, when Bloomberg announced in early May that it would put up a metered paywall across its site—including its Live TV digital channel—John Micklethwait, editor-in-chief of Bloomberg News, pointed to entertainment streaming services such as Netflix and Spotify as proof that consumers are “willing to pay for content again,” in his “Future of News” article on the site in May this year.

Fewer and fewer consumers are picking up print magazines and newspapers—Pew Research Center reported in June 2017 that year-on-year circulation for US daily newspapers fell 8% to 35 million in 2016. Digital entertainment presents a new medium for publishers to spin their brand, capturing consumers’ attention, and, with that, advertisers’ dollars. Data from Standard Media Index, published in March, showed that while year-on-year advertising revenues in print media fell 26% in February 2018, digital advertising grew 18% during this period. In particular, ad spend for digital content creators rose 23%.

Anna Bager, executive vice president of industry initiatives at the Interactive Advertising Bureau (IAB), notes that the rise in publishers launching digital video channels stems from both the medium’s potential as a revenue opportunity and the advances in technology that have opened up the possibilities of digital entertainment. “Today, you can become a TV company in five minutes,” she says. “If you have an existing audience, you can provide them with a totally different experience. Video is obviously a very powerful engagement tool if you want to talk to consumers. They like it, they consume a lot, they do it on a lot of different screens… so, because you can, why not?”

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Living with Lucie by Channel29

One digital publisher tapping into this new sphere is millennial women’s website Refinery29, which announced the launch of its new Channel29 OTT television channel in early May, set to go live in the fourth quarter of 2018. Chief operating officer Sarah Personette says the service will allow the company’s partners to speak to its audience in new and innovative ways:“Recent data shows that over 51% of people today are actually consuming video on internet-connected devices and that will grow to over 335 million people over the course of the next few years. When we think about Refinery29’s mission to be a catalyst for our audience to see, feel and claim her power, we want to ensure that she is able to consume the content that supports that on every device and every space and place she wants to be.”

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The Mention by Channel29
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Living With Lucie by Channel29

The channel is slated to launch with Refinery29’s existing short-form, digital on-demand content, which includes the series Try Living with Lucie, featuring the brand’s lifestyle host Lucie Fink as she “dives into social experiments”; The Mention, in which Refinery29 staffers discuss pop culture happenings; and Style Out There, which explores global fashion subcultures; along with two hours of live programming.

Personette notes that, in terms of advertising opportunities on the channel, the company is “going to take the best of what it means to do native advertising inside of the digital space and bring that model into the TV space.” That will initially mean the native integration of advertising content into live programming, moving towards what Personette describes as a “more consumer-friendly commercial load” in the long term. She explains that the service will focus advertising more on what consumer video means in a mobile-first world, so, for example, instead of lasting 30 seconds, spots will be six or 15 seconds.

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Style Out There by Channel29

Explaining the channel’s appeal to advertisers, Personette says that “brands come to Refinery29 for our expertise in reaching and creating content for young women. They have recognized that Channel29 is the next frontier—building live, daily experiences through which brands can organically connect with our audience—and are excited to partner with us for this next venture.”

Bager says that digital entertainment represents a compelling opportunity for advertisers as the medium is increasingly “how consumers prefer to consume media.” She explains that millennials form a large and desirable audience, and the IAB’s “Digital Video Viewers and Brand Connection”study, published in April this year, shows that the key audience for digital video is predominately young, affluent and much more open to recommendations and brand input. “They’re constantly looking for new brands and new products,”she says, “so I think advertisers see that.”

Indeed, according to the IAB’s research, original digital video is estimated to reach 86 million Americans aged 13 years and above, with 72 million of this group aged over 18. The organization adds that the audience for on-demand video (ODV) among American adults has been “on a steady rise,” up 60% in five years, from 45 million in 2013 to 72 million in 2018. The research also found that nearly half of ODV viewers are “Brand Seekers”—the IAB describes these consumers as “likely to seek out and be open to new brands they don’t know, and be receptive to direct communications with them. They are also more optimistic about advertisements, believing they can be beneficial and fun.”

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Last Chance U

Condé Nast is one print publisher that has already planted its flag in the entertainment space. Having launched Condé Nast Entertainment with a film and television division in 2011, and a digital and video division in 2013, the publisher has seen success with its projects in those spheres. Its “Last Chance U” television series – which grew out of a GQ article – was released to critical acclaim on Netflix in 2016, with a third season announced in 2017, while one of its film productions, “Only the Brave,” was released in theaters in 2017, and again grew out of a GQ article.

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Only the Brave

The publisher also recently announced that it is ramping up its digital entertainment offering, with the launch of three OTT channels for Wired, Bon Appétit, and GQ. At the IAB’s NewFronts conference in May, Pamela Drucker Mann, chief revenue and marketing officer at Condé Nast, said at the time that the launch was part of the publisher’s mission to “bring the quality of Condé Nast to next-gen consumers on new platforms, and in new ways,” Media Post reported.

For advertisers, Drucker Mann noted that the channels represent an “opportunity to reach connected audiences through ad placements and series integrations.” “While consumers have more screens and more content to choose from than ever before, advertisers face the challenge of less buyable options,” she said at the conference, pointing to Condé Nast’s “brand safety and influence,” as a content provider to fill that void. Drucker Mann’s mention of brand safety nods to some advertisers moving away from YouTube over concerns over some channels’ content.

These new OTT channels add to the publisher’s established digital video content. Speaking to Ad Age in December, Dawn Ostroff, president of Condé Nast Entertainment, pointed out that Condé Nast’s video content is garnering impressive viewing figures. On its Wired YouTube channel, the video “Autocomplete Interview with the Cast of Stranger Things” saw 12 million views in five days on YouTube alone, while the Vogue video “73 Questions with Liza Koshy” saw 6.2 million views on YouTube in five days, both during November 2017. “What network wouldn’t want those statistics?” Ostroff commented to the title.

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Only the Brave
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Also adding to Condé Nast’s roster of video content is Iris, a video and social-led brand for what the publisher described as “socially-conscious millennial women,” that was developed out of The Scene, Condé Nast’s video aggregation platform. The publisher notes that it’s the “fastest growing” title within the Condé Nast portfolio, generating over 1 billion views a year.

Meanwhile, theNew York Times is set to put its famed news-making process on screen, announcing earlier this month that it will partner with cable channel FX to create The Weekly, a documentary series that will chart the creation of the paper’s stories and the journalists behind them. The series will also be streamed on Hulu. At the launch, Mark Thompson, chief executive of the Times Company, told the New York Times that the program was a way to generate revenue, get Times journalism in front of new audiences and further build the reputation and influence of the paper.

This mutable approach to a media brand, and translating editorial content into digital entertainment to suit an evolving media landscape, is something that Bager at the IAB describes as essential, in order to ensure that “advertisers and publishers are not missing out.” Expect more media brands to look to transition from printed page to moving image, as the sands of publishing continue to shift.