A look at how last week’s news affects mobile publishers…
Snapchat Ends Licensing Fees for Publishers
Snap is no longer paying licensing fees to publishers for their Snapchat Discover channels, leaving those publishers instead to live off advertising. Over the past several months, Snap has been notifying Snapchat Discover publishing partners that it will stop paying an upfront licensing fee for them to produce daily and weekly editions for the media section. Instead, Snap has been reverting the deals back to focus entirely on sharing ad revenue generated from Snapchat Discover, according to three sources with direct knowledge of Snap’s plans. Snap typically does an even split with publishers on ad revenue generated by their channels. In late 2016, Snap proposed changing its deal terms with Discover publishing partners where, instead of splitting ad revenue generated from the channels, Snap would pay a flat upfront licensing fee in exchange for keeping all of the ad revenue. It is unclear how many publishers agreed to these terms.
Worldwide Online Media Consumption will Overtake Linear TV This Year
Time spent with online media around the world will overtake linear TV for the first time this year, as time spent with media overall increases. According to a GroupM report, on average, consumers will spend 9.73 hours with media each day, up from 9.68 hours in 2017. With this increase, online media will be responsible for 38 per cent of the time versus TV’s 37 per cent, while the remainder is made up by 18 per cent radio and 7 per cent print. In addition, GroupM also looked at programmatic ad investment, finding that 44 per cent of online display investment was transacted programmatically in 2017, compared to 31 per cent in 2016. This year, this is expected to rise to 47 per cent. Meanwhile, programmatic online video investment is smaller, increasing to 22 per cent last year, from 17 per cent in 2016, and expected to rise to 24 per cent this year.
T-Mobile Agrees to $26 Billion Merger Deal with Sprint
T-Mobile and Sprint have agreed to their long rumored merger costing T-Mobile around $26bn (£18.9bn) and placing the pair almost on par with the US mobile carrier duopoly of Verizon and AT&T. The deal, which will create a company with an enterprise value of around $146bn, is expected to close no later than the first half of 2019. The combined company will be named as solely T-Mobile and will operate out of T-Mobile current headquarters in Bellevue, Washington – with a second headquarters in Overland Park, Kansas. As a result of the deal, the joint company promises to lead the way on the rolling out of 5G network capabilities, helping to put the US at the forefront of the next mobile network evolution. Furthermore, it assures that there will be ‘lower costs, greater economies of scale, and unprecedented network capacity’. The T-Mobile/Sprint company guarantees that it will create more jobs in the US than the two companies would have done separately. Upon completion of the merger, over 200,000 people will already be working for the company in the US – with plans to invest up to $40bn in the new network and business in the first three years, driving further job growth.
YouTube Talks New Shows, Growth and Advertising Options at BrandCast
YouTube told advertisers on Thursday that it now has 1.8 billion logged-in users on its platform, while acknowledging both the benefits and risks that come with that scale. At its annual BrandCast event in New York City, YouTube spent two hours pitching both its broad range of celebrity talent along with how advertisers have seen business results on the Google-owned platform. During her opening remarks at Radio City Music Hall, YouTube CEO Susan Wojcicki acknowledged the difficulty that comes with moderating user-generated content, of which there are hundreds of hours uploaded every second. In addition to updating its previous logged-in user total of 1.5 billion, YouTube also announced several new advertising products, including expanded advertising through Google Preferred on TV screens. While mobile screens might have helped YouTube get to the scale it has today, Wojcicki said TVs are now the fastest-growing screens, with more than 150 million hours of YouTube watched on them every day.
A Look at the Platform/Publisher Ecosystem
Media research company, Kaleida, has come out with a new report looking the health of the publisher-platform ecosystem. Among the insights from the report: There were approximately 7.4 billion visits to news articles in Europe in January that were driven by clicks from third-party sites and people who read news clicked on about 32 percent of the headlines they saw in a day. The research showed a real appetite for news. The platform-publisher-people triad is working very well in many ways. It’s not a dependent or even co-dependent relationship for any of the constituents. Traffic generated by 3rd party sites is powerful fuel for a news business, but news can survive without it, too. The challenge is working out how platforms and publishers can develop a healthy long-term coexistence.