Linear TV and digital content viewership is looking more similar than ever before, according to a recent report from advanced advertising company FreeWheel, with advertisers buying across both platforms at an increased rate.

According FreeWheel's  Video Marketplace Report, which surveyed more than 200 advertisers and agencies, more than half (52%) of agencies are already combining the buying of digital and linear TV today, with 91% saying they will do so by 2021. In addition, 74% of the advertisers surveyed said it is important or very important to have integrated digital video and linear TV/data technology solutions.

According to FreeWheel, a unit of cable operator Comcast, the data set used for the VMR report is one of the largest available on the usage of professional, rights-managed video content worldwide, and is based off of census-level advertising data collected through the FreeWheel platform.

The VMR -- formerly the Video Monetization Report -- also looked closely at convergence trends in the industry, adding that tentpole sporting events like the PyeongChang Winter Olympics, FIFA World Cup and Super Bowl LII were viewed increasingly online. According to the VMR, NBC Sports digital coverage of the Winter Olympic Games set a new record in 2018, with 2.17 billion streaming minutes and an 11% lift in its linear only audience.

That increasing comfort with digitally delivered content helped fuel 86% growth in live content ad views during the year, said the VMR. Premium video was shared across multiple day parts, not just primetime -- 23% of all connected TV ad views were in the 8 p.m. to 11 p.m. time slots, while 18% of desktop views were between 12 p.m and 3 p.m., according to the VMR.

Total video views were up 25% in 2018, while ad view growth was 27% for the year. That compares to the prior year when video views rose 26% and ad views were up 22%.

The report added that full-episode content remains the most widely-viewed segment, particularly in the fall viewing season, and made up 61% of ad views in Q4 2018. About 95% of those ad views occurred on entertainment content, the report said.

Still, live TV was the biggest driver of growth -- up 51% year-over-year in Q4 2018. Sports content dominated, accounting for 57% of total live ad views, followed by news (up 46%)and entertainment (up 102%) ad views.

“A halo effect from viewers streaming second quarter tentpole events, such as the Winter Olympics, likely supported the persistence of live viewing throughout the year,” the report said.

The VMR data seemed to jibe with TV ratings measurement giant Nielsen’s Content Ratings Benchmarks report, which noticed a growing trend by consumers, especially younger ones, to watch programming first on their digital devices.

When younger viewers are watching broadcast and cable networks, they are mainly watching live TV. According to Nielsen, within the 18-34 demographic, 66% of the time they spend watching content from the four major broadcasters is done live. For cable networks, the same group spends 81% of its time viewing this content on live TV.

“Understanding how people are spending their time and where they are viewing is essential to monetizing content and creating value for media owners and buyers alike,” Nielsen said in its report.

Nielsen also found that when younger consumers are watching digital content, it is most likely on the go, via their smartphones or tablets. According to the Content Ratings Benchmark report, when 18-34 year- olds watch broadcast-originated content digitally, 71% of that viewing is spent on smartphones and tablets instead of computers. About 55%, when watching cable network originated content digitally, do so on mobile devices. The number spikes with content originated from digital-first publishers, with 91% of the time spent on a digital device by the 18-34 demographic occurring on mobile devices. 

Viacom said it has purchased AwesomenessTV Holdings, parent of digit-first short-form video content company AwesomenessTV, which will join the programmer’s stable of entertainment brands housed within Viacom Digital Studios.

The deal had been expected for days.  Although terms were not disclosed, past reports estimated that Viacom purchased the company for under $300 million, a fraction of its earlier $650 million valuation.

Since the launch of Viacom Digital Studios in November,  Viacom says its domestic social video views have increased by 112% and watch time has risen 104%, while its YouTube subscribers have nearly doubled in the past year. The company claims its digital streams have tripled over the past two years driven by that social media growth.

“Awesomeness has done an incredible job building their brand into a digital media powerhouse for today’s most sought-after and hard-to-reach youth audiences,” said Viacom Digital Studios president and former AwesomenessTV chief business officer Kelly Day in a statement. “The team brings strong digital expertise, deep connections with top talent and influencers, a world-class television and film studio, and a robust branded content team and creative agency that will accelerate the growth and scale of Viacom Digital Studios.”

AwesomenessTV is expected to be a good fit with Viacom’s youth-oriented MTV and Nickelodeon networks, as it reaches about 158 million subscribers with about 300 million monthly views and an additional 6 million people watch it on YouTube. AwesomenessTV’s Emmy-winning production studio also has a library of over 200 hours of long-form television and feature films.

AwesomenessTV was co-founded by Brian Robbins, who currently serves as president of Paramount Players at Viacom, and Joe Davola. AwesomenessTV was previously owned by Comcast/NBCUniversal, Hearst and Verizon.

"Creation and delivery has advanced to the point that consumption is the bottleneck, leaving content providers to compete with sleep. Providers have so much to deliver, their challenge is how to capture the attention of consumers and maximize what they consume during waking hours." —Ashish Chawla, Cognizant Business Consulting

For information, media and entertainment companies, driving revenue from content is a constant challenge, with today’s paid content likely offered for free tomorrow as competitors try to capture market share.

The proliferation of digital technologies and platforms over the past decade has drastically impacted how content is developed, delivered and consumed, creating a new ecosystem to align with consumer demand for content packaged in smaller, more digestible units. Application programming interfaces (APIs), which transmit content to and from any destination quickly and cost-effectively, can be used as the mechanism to transfer granular levels of that content, and support new business models such as this.

For example, where music was once purchased on physical CDs that contained multiple songs, consumers now purchase single songs via iTunes. Platforms such as YouTube have revolutionized education, enabling educators to provide topic-specific viewing that lets students tforgo purchasing entire textbooks. More and more, people consume news via multiple online sources instead of purchasing an entire newspaper, giving them immediate access to real-time, personalized stories.

As providers move toward offering content across digital, they need to process smaller units across the value chain and track the return for each piece. To do this, they need to understand their content’s lowest common monetizable denominator (LCMD). For example, a television series broadcast on Netflix might contain 12 episodes, each of which can be watched individually. Return can be calculated by episode based on viewings. Since there would be little to no demand for individual scenes within an episode, one episode is the LCMD.

Setting Value Parameters

Organizations can identify LCMD by evaluating pieces of content based on set parameters for all points across the value chain — acquisition, storage, aggregation, delivery and consumption. The objective is to strike the right balance between minimizing the effort to create, enrich and deliver content while maximizing reusability, exposure and value. One of the points in a value chain may have more importance than another, when determining the LCMD. MSNBC, for example, whose material includes both news headlines and video clips, may want to give content delivery a higher priority than other points for determining the LCMD.

How a piece of content is evaluated for LCMD depends on an organization’s strategic vision and roadmap. Different types of content and formats can have different LCMDs, which may change over time as technology and business strategy evolves. Once an organization identifies the LCMD, it can evaluate the returns from anything created at that level of granularity.

A key challenge for content providers is to ensure that what they create is stored in a format that enables it to be easily pushed into any new digital platform. As disruptive technologies hit the market faster than ever, providers must adapt more quickly and constantly modify the way they process content to keep up with changing consumption.

Creation and delivery has advanced to the point that consumption is the bottleneck, leaving content providers to compete with sleep. Providers have so much to deliver, their challenge is how to capture the attention of consumers and maximize what they consume during waking hours. But the competition is fierce, and consumers are overwhelmed by the volume, creating demand for highly personalized, streamlined content delivered to consumers’ interfaces of choice.

The number of digital platforms will continue to proliferate, as will the combinations in which everything can be consumed. This will require providers to structure content to be easily accessed through APIs, package it for specific devices and seamlessly send it across multiple platforms. New developments around virtual assistants and smart speakers such as Google Home, Apple Homepod or Amazon Echo will further change delivery requirements as voice gains in popularity and people no longer view a screen and click to navigate.

The key takeaway is to keep innovating: Yesterday’s value-add is today’s commodity. Providers must move fast to keep up with the constantly changing landscape and identify their LCMDs so they can track returns.

There is no one-size-fits-all solution, but all content providers can generate value and bolster returns by developing a framework for determining the LCMD of their content and tracking returns at that level.

Ashish Chawla is global head, Cognizant Digital Content Services, at Cognizant Business Consulting, an information technology services company.

Layer3 TV is expanding the OTT-delivered portion of its lineup by 100-plus digital channels after notching a deal with Xumo, an ad-based offering that is also delivered on a variety of mobile devices, TV-connected devices, and smart TV platforms.

RELATED: Xumo Nets National Lacrosse League Deal

The deal, which makes Layer3 TV the first MVPD to integrate Xumo on the set-top box, opens up access to digital channels such as Funny or Die, Cheddar, Tastemade, FailArmy, the recently rebranded PeopleTV,  and Mashable. The deal with Xumo also comes soon after execs from Layer3 TV and Cheddar mentioned a carriage agreement was done.

RELATED: Layer3 TV to Add Cheddar to Lineup

Layer3 TV is bundling the curated Xumo offering with its baseline Platinum subscription.  

Layer3 TV and Xumo did not announce financial terms and whether, for example, this opens up ad inventory for Layer3 TV to sell on its platform or if they have forged another type of ad revenue-sharing arrangement.

Xumo’s lineup broadens the mix of OTT content available through Layer3 TV, which also integrates access to services such as Pandora, iHeartRadio, Facebook and YouTube.

RELATED: Layer3 TV Plays Pandora

Layer3 TV has launched service in Los Angeles; Chicago; Longmont, Colo.; Washington, D.C.; and Dallas/Fort Worth, Texas, with plans underway to debut in New York.

RELATED: New York Next on Layer3 TV’s Launch List

In the race to appeal to younger viewers, traditional content companies are increasingly turning toward short-form video and digital content providers, with several deals on the books over the past 12 months and more likely to come.

The latest to go short is Time Warner Inc.’s CNN, which paid about $25 million for online video company Beme, home of YouTube star Casey Neistat. As part of the deal, Beme’s 11-member staff, including Neistat — who has some 5.8 million YouTube followers — will join the news network and start a new media brand focused on millennial viewers.

Other companies have dipped their toes in the digital waters to varying degrees, ranging from NBCUniversal, which has spent about $600 million in online media sites BuzzFeed and Vox Media over the past 18 months, to 21st Century Fox, which in September paid about $6.5 million for a stake in DriveTribe, a new online motoring venture from former Top Gear stars Jeremy Clarkson, James May and Richard Hammond.

Earlier last month, Discovery Communications said it would invest about $100 million for a 35% stake in a new digital venture called Group Nine Media that would combine its science site, Seeker.com, and Sourcefed Studios production arm with pop culture site Thrillist, news site Now This and animal advocacy site The Dodo.

EXPERIMENT TIME

“Everyone is trying to figure out what the right format is,” Telsey Advisory Group media analyst Tom Eagan said in an interview. “There is going to be a lot of experimentation.”

Programmers have been trying to attract young viewers since the beginning of television. But as more and more content is available on more and more devices, snagging the coveted millennial audience means the delivery mechanism is almost as important as what is being delivered.

“What has been tried is to take a regular cable or broadcast linear service and try to make it fit,” Eagan said. “That doesn’t always work, whether it’s on a mobile device or some other device. I think they realize they not only have to change the content, but the format.”

In a recent interview, Discovery chief commercial officer Paul Guyardo called the Group Nine investment part of the programmer’s three-pronged strategy, consisting of its full product bundle, its participation in skinny bundles for more price-sensitive consumers and the creation of short-form video and content partnership Group Nine, which is aimed squarely at younger viewers.

“That’s an ad-supported model that does rely primarily on short-form [video], because that’s how millennials want to consume their content — it’s all about highlights and sound bites and snippets,” Guyardo told Multichannel News. “If you look at the way we’re building it, we’re building it in a very Discovery-esque way.”

Like Discovery, each programmer seems to be forging its own path with digital investments. At NBCUniversal, the BuzzFeed and Vox Media deals seemed to be more geared to enhancing its social media and digital advertising strengths. BuzzFeed reaches more than 500 million people per day on its various platforms, more than any other pure digital media company, and has a strong presence on social media sites like Facebook. Vox Media, which has eight separate brands including news site Recode, sports site SB Nation and the food-centric Eater, has about 170 million unique monthly visitors and 800 million total monthly content views (on- and off-platform), and two of every three of its users are on mobile devices, according to the company.

Pivotal Research Group senior research analyst Brian Wieser said practically every programmer is looking to secure a digital business, and buying established providers is frequently the quickest path to success. There are many reasons to take the digital plunge, he said.

HEDGING BETS

“Some of it is hedge,” Wieser said. “In the event alternate forms of content packaging become more common, someone knows what they’re doing. Some of it is for show to Wall Street and other constituents, just to say that ‘we’re doing this too.’ And there also can be the belief that combining small entities into larger ones, and you can build an even bigger business.”

Another reason could be a desire to align with a particularly strong management team. That’s what Wieser believes was a big driver for Disney’s 2014 investment in Vice Media, then a fledgling Canadian publisher and multimedia company with a brash CEO in Shane Smith who wanted an inroad into more traditional media. With Disney’s initial $200 million investment (it invested another $200 million later that same year), Vice announced it would take over A+E Networks’ H2 channel, rebranded as Viceland. A+E Networks, which itself owns about 15% of Vice Media, is jointly controlled by Disney and Hearst.

While sluggish early ratings put a bit of a damper on the initial enthusiasm for the channel, it has been attracting young men with shows like the self-explanatory Weediquette and skateboarding reality-competition series King of the Road. In November the channel said it would launch four new shows aimed at that demographic in the next two months — Payday, which follows the lives of four 20-somethings over the course of a single pay period; Big Night Out, which showcases how millennials party around the world, and Bong Appétit, which follows cooks who create high-end, cannabis-infused foods.

“Everyone wants a piece of Shane Smith’s pixie dust,” Wieser said.

MORE MOVES SEEN

The analyst added that he expects more deals to be done, but to what extent will depend on each individual company. At Fox, which in the past has leaned more toward developing new properties internally, Wieser believes that practice will continue.

Time Warner and NBCU are expected to continue on their previous path of making small venture investments in digital companies, he added.

“Do we expect to see more [deals]? Sure. I don’t see why not,” Wieser said. “You can argue that most companies don’t need to hurry because it just doesn’t change that quickly. But the perceptions of change are often greater than the reality.”

SIDEBAR: All About the Digits

Major programmers are increasingly investing in much smaller digital companies to attract younger audiences and tap into online ad streams.

InvestorInvesteeInvestmentDate

NBCUniversal . . . . . . . . . . . BuzzFeed . . . . . . . . . . . . $400 million . . . . . . Aug. 2015/Nov. 2016

NBCUniversal . . . . . . . . . . . Vox Media . . . . . . . . . . . .$200 million . . . . . . . August 2015

Verizon . . . . . . . . . . . .. . AwesomenessTV .  . . . . . . . $159 million . . . . . . . . April 2016

Discovery . . . . . . . . . . . Group Nine Media . . .. . . . . . $100 million . . . .  . . .  November 2016

Time Warner . . . . . . . . . . . . . Beme . . . . . . . . . . . . . $25 million* . . . . .  . . . .  November 2016

21st Century Fox . . . . .  . . .DriveTribe . . . . . .  . . . . . $6.5 million . . . . .  . . .September 2016

AMC Networks . . . . . .  . . Funny or Die . . . . .  . . . . . . . N/A . . . . . . . . . . .  November 2016

* Estimate

SOURCE : Individual companies and published reports

Infront Sports & Media, an international sports marketing company based in Switzerland, said it has acquired a 51% stake in digital consulting firm Omnigon.

Financial terms were not announced, but the deal comes on the heels of a partnership between the companies announced in October 2015 that involved the custom development of digital solutions fed from centralized content management platforms.

The Omnigon brand and management team, including CEO Igor Ulis, will remain, the companies said. New York-based Omnigon has more than 250 employees in North America and Europe.

Omnigon has inked digital service deals with the PGA Tour, NASCAR and the Miami Heat, was a key developer for a mobile app tied to the 2015 Rugby World Cup, and recently launched a new website for Italian pro soccer club AS Roma.

WikiLeaks has put a $100,000 bounty on a copy of the Trans-Pacific Partnership (TPP) treaty being negotiated by the U.S. and Pacific Rim countries that includes protections for digital content.

WikiLeaks said the goal of the treaty is, among other things, to "create a new international legal regime that will allow transnational corporations to bypass domestic courts, evade environmental protections, police the Internet on behalf of the content industry..." and more.

"The transparency clock has run out on the TPP," WikiLeaks founder Julian Assange said in a statement. "No more secrecy. No more excuses. Let's open the TPP once and for all."

WikiLeaks has already published several leaked chapters of the treaty draft, but wants more. Those chapters, which included online content protection language, did not sit well with consumer advocates Public Citizen.

“The WikiLeaks text features Hollywood- and recording industry-inspired proposals – think about the SOPA debacle – to limit Internet freedom and access to educational materials, to force Internet providers to act as copyright enforcers and to cut off people’s Internet access,” Burcu Kilic, Public Citizen's legal counsel, said when the chapters were first published.

The Motion Picture Association of America, which represents TV and movie content producers, sees TPP differently.

The TPP would expand trade, including access to creative content, to much of the Asia-Pacific region, MPAA said, including creating what it calls "strong standards for the protection and enforcement of intellectual property rights for the 21st century."

"Completion of a meaningful TPP will allow our flourishing industry to continue expanding into some of the world’s largest and most important markets to continue to build on this American success story," an MPAA spokesperson said of the treaty.