Month: June 2019

“Over the past 12 months, when you look at mobile and desktop, we’re up or down a few digits here and there,” said Rob Christensen, Vevo’s vp of sales strategy and partnerships. “If you look at performance in terms of view count, connected TV has been the biggest growth factor for us across any screen. We have seen a 41 percent increase in the living room year-over-year.”

Music video never died, of course. Just look at the past decade: From Anaconda to Bad Blood to Despacito, the format has perpetually captured the public imagination while creating digital ad revenue, propelling album sales and song downloads and driving subscriptions to streaming services. There’s a reason that record labels have continued pouring money into Hollywood-level productions featuring some of the biggest celebrities on the planet.

But as digital platforms became the dominant medium for social engagement, distribution of music videos grew more closely tied to desktop and mobile, particularly through YouTube. The question is, what’s bringing them back to TV?  

For one thing, video environments that were once consigned to mobile and desktop are now widely available on television thanks to the rise of Smart TVs. (As of last year, 70 percent of all globally sold TVs were smart TVs, according to Statista.) YouTube itself is now a ubiquitous TV app. Video distributors and content creators have evolved their platform strategies along with this newfound availability.

Wider television access is hardly the whole story, though. After all, music videos were available on TV in the MTV era as well —  and that didn’t keep the ratings from falling. But now there’s a crucial difference: TV has become conducive to control and discoverability.  

In the age of TRL, viewers often had to wade through 5 stinkers to get to the video they were waiting for. Today’s viewers don’t have that kind of patience; in an era of self-curated playlists and instant content discovery, they expect speed and control —  and now they can get it. The personalization and ease of use that made mobile and desktop so inviting are increasingly available through connected TVs. As Christensen put it, “search is in convergence with the living room.”

Voice-operated search —  whether through voice-controlled remotes or smart speakers — is the biggest driver of this trend. Indeed, it’s the most propulsive factor in music video’s escalating prevalence on living room platforms.

On mobile and desktop, all you need is fast-fingered typing skills to swiftly surface your favorite videos, create playlists or rapidly discover new content. On connected TVs, the same efforts used to be a laborious chore. “Voice-activated search creates ease of use, taking you beyond the six button remote navigation,” said Kevin McGurn, Vevo’s president of sales and distribution.

The speed and flexibility afforded by voice search also allows for something else crucial to the living room experience: laid-back viewing. Voice search minimizes the time and energy that viewers have to devote to physically interacting with the platform.

Streaming audiences, now armed with widespread TV access and convenient discoverability tools, are amply demonstrating a desire to watch new and old music videos on a bigger screen. Not only are music video viewers returning to TV in droves —  they’re also more engaged in that environment. “The average user session on mobile is somewhere between 14 to 15 minutes,” explained Christensen. “The average user session in the living room is closer to 65 minutes.”

So what does it all add up to? Engaged users who watch for longer periods of time on a bigger screen. Don’t be shocked if these become meaningful considerations for advertisers. It wouldn’t be surprising to see media buyers start shifting dollars away from broadcast channels, tailoring ad spend specifically to music video viewers in the living room.

It also wouldn’t be particularly surprising to see music video advertisers who previously focused on smaller screens begin to invest in TV-friendly ad formats shot specifically for the living room. Conversely, we’re also likely to see ad formats that have long been popular on mobile and social platforms hit TV. “In a short time I’m sure we’ll see things like interactive ads and opportunities to share and click to share,” said Christensen.

The age of digital viewership breathed a new kind of cultural significance into music videos, making them focal points of social conversation. But what was often lost in the post-MTV era was the in-real-life social element —  that group of people sitting in the living room, chatting about the videos (and ads) they just saw. Connected TV environments are once again making that dynamic possible —  and viewers are demonstrating that they missed it.

Music video viewership never subsided. Even before TV’s recent rise to prominence as a music video streaming medium, Vevo was seeing more than 26 billion views per month, from a catalog of more than 350 thousand music videos. Thanks to new and evolving technologies, TV is simply attracting an existing music video audience and music services and platforms can now leverage this consumer demand.

The TV music video experience looks a lot different than it did in 1981, of course. The very definition of “TV” is a whole lot less concrete than it used to be. But the trend is clear: Music video viewers are coming home to the living room.

History may not always repeat itself —  but like a great chorus, it often rhymes.

The post The video star will never die: Music videos come home to TV appeared first on Digiday.

The problem is that the online advertising landscape is changing in such a way that it’s creating a multitude of issues across the advertising ecosystem, with immediate effect. For example, Apple’s recent Intelligent Tracking Prevention (ITP) announcement and update for Safari, which will block all third-party cookies by default, carry massive implications for publishers when their content is viewed through that browser.

That’s a lot of eyeballs being separated from targeted advertising, especially when you think that Safari is the default browser for the world’s 700 million iPhone users — not to mention the 1.3 billion Apple devices currently in use worldwide.

The industry is also nervously waiting to see how Google’s Chrome and other browsers will follow suit with their own updates, which will have further impact on advertisers. One of the big areas of concern is audibility.

Let’s look at HAVOC (Human, Audible, Viewable On Completion). The Coalition for Better Ads (CBA) guidelines dictate that autoplay video ads should be served sound off, which everyone agrees makes for a better consumer experience — to the extent that most of the major browsers are issuing updates that will block publishers if they try to run autoplay ads with sound on.

Persuading audiences to perform an extra task in activating sound, on top of any campaign call-to-action, would be a near-impossible task, so advertisers and agencies started to work around it with creativity. If the format default was no sound, they started to optimize the creative for silence. There’s a growing body of insight around the effectiveness of different editing and subtitle techniques, which boils down to keeping things concise and avoiding full transcriptions.

This sound-free creative editing might seem like the winning solution, until you realize that buyers still chase HAVOC KPIs and therefore equate sound-on to success. This ignores the engagement potential of a well-crafted silent ad and comes into direct conflict with the new browser updates.

Lessons from history
When online video took off in the mid-2000s, the industry quickly realized that effective digital marketing wasn’t just about putting TV ads on YouTube, yet our KPIs for video today seem to be hardwired to the old TVC ideal.

In effect, we’ve witnessed the creation of a new ad format without realizing it: the silent video unit. User acceptance of silent video is likely to be driven by Facebook, where 85 percent of video content is consumed in silence. We already understand the concept of multi-screening, where people look at their phones while watching television — but we also need to consider multi-listening, where audiences are browsing the web while listening to Spotify or an episode of their favourite podcast. In these instances, sound-on video would be disruptive and annoying.

The future is silent
There’s still more to learn about optimizing creative for silence, but it’s a growing space given the widespread adoption of the CBA-style ad standards. But HAVOC/AVOC as a metric comes from a time before we understood that silent video could work as well as, if not better, than an audible counterpart.

The big question is this: Are the current benchmarks still relevant? We strongly advise buyers to consider viewability metrics over audible measurement.

Viewability is a far more accurate measure of attention and validity than audibility. In a recent Digiday article MEC, North America said branded videos from its clients average 85-90 percent silent video views, with no detrimental effect on KPIs like brand lift or purchase intent. This is corroborated by a 2019 study we conducted with Lumen, Attention and Brand Impact, which compared the same ad with sound on and sound off. Both videos achieved similar impact on the perception of ‘good quality’ (sound on 46 percent, sound off 43 percent) and ‘good value’ (sound on 30 percent, sound off 28 percent).

It’s a fascinating area which requires more study, and it’s even prompted us to conduct research into the role of audio in the digital marketing mix. But for now, all the available indicators are that the best silent video experience should focus on compelling visuals to keep audiences glued to the screen, with invitations to engage through interactive, clickable — and most importantly — measurable features.

The post Browser updates and outdated KPIs: Why silence is golden in video appeared first on Digiday.

The trust gap
Nobody trusts each other. As Sahil mentions in his story, all players want to get into others’ businesses. There will be non-stop conversation around seemingly disparate issues like clients taking marketing work in-house, brand safety, the role of platforms in society. Underpinning all is a trust gap. Publishers have stopped trusting platforms. Marketers don’t trust their agencies. Platforms meanwhile don’t trust both marketers and publishers to not get governments to do their bidding by hamstringing them with regulations.

The hot new app
Cannes will be a coming out party for two new apps with a lot on the line. One is TikTok, which will promise marketers access to the elusive Gen Z audience. Facebook is for old people, Instagram is dominant and Snapchat is hanging on, but marketers are most intrigued by TikTok. The Chinese-born app has a hold on young people that is like catnip for youth-obsessed marketers. The other app is Quibi, which has dispatched both Jeffrey Katzenberg and Meg Whitman to pitch its ambitious, billion-dollar bet on short form entertainment. Quibi is trying to shake the comparisons to Verizon’s awful bet on Go90 and convince a skeptical market that it can succeed in making a mobile-first entertainment company.

Merger mania
Beyond the surface, Cannes is about deals. Some are ad deals, some are job deals, but the big ones are mergers. Expect the talk of Cannes to be around future combinations of both agencies and publishers. The collapsing world of agencies is going to be a hot topic, despite WPP taking out a beach and Publicis returning in full force. The past year has seen unprecedented consolidation of agencies. On the flip side, publishing is undergoing its own fit of consolidation. See no further than the Warnerhouse, now home to an array of media brands. With platforms bigger than ever, consolidation will be the talk of the town.

— Brian Morrissey

The Digiday Podcast
Each day in Cannes, we’ll have a recording of the Digiday Podcast with top publishing executives. Coming up later today: Hearst Magazines president Troy Young. It’s been a little less than a year since he was named to the role, and I want to discuss with him the changes he’s already made and his roadmap for the rest of the year. Look for it to publish later in the day — and for a link in tomorrow’s newsletter.

Digiday in Cannes
We are hosting a pair of live podcasts at the Twitter beach. Please consider joining us.

On Wednesday at 2pm, in a live recording of the Digiday Podcast, I’ll speak with Twitter exec Sarah Personette about how Twitter is working with publishers to not just distribute content but actually make money from it. RSVP here.

On Thursday at 1pm, Kerry Flynn will record an episode of Making Marketing with Twitter’s global director of culture and community God-is Rivera and P&G’s vp global communications & advocacy Damon Jones for a live edition of Digiday’s Making Marketing podcast. RSVP here.

What’s in, what’s out
We have an annual tradition of tracking what buzzwords, celebrities and oddities will be in — and what will be passé. Here’s what we’re expecting this year:

Phillip Morris campaigning against smoking : Irony

Handicapping Quibi’s prospects : Handicapping Snapchat’s prospects

Worrying about Trump : Worrying about a recession

Adult playgrounds : Creativity lounges

CBD-infused drinks : Frosé

Baby boomers talking about Gen Z : Baby boomers talking about millennials

Bulshitting about 5G : Bulshitting about blockchain

See the rest of the list here.

Cannes newcomer tip
Don’t go out too hard. This is a long week. Yes, the Riviera is exciting, and you will be surrounded by rosé all day, but if you’re at the Gutter Bar at 5am this morning, you are going to pay the price.

Spotted
Cannes is sleepy on a Sunday evening, even more so on the outskirts on the way to Antibes. But at sleepy restaurant Fred l’Eclailler at 10pm Vice co-founder Shane Smith rolled up with a group that included Vice CEO Nancy Dubuc and Vice CRO Dominque Delport. Smith was clearly not new to the place judging by his hearty embrace of a restaurant staffer. A group of about eight had good views of the pétanque courts next to them in the square. How much Vice uses Smith in Cannes, at a time when it is attempting to project a new front, will be a subject to watch here.

Cannes confession

“We’ll send a few key people there to do conversations and meetings, but it’s never been a big investment for us where we do some type of event or activation. We’re going to make sure some people are present because everyone’s there, but we don’t treat it as a big splash that has a real impact on ROI.” — President of a digital publisher

What to do
The Palais is a mob scene, so check out some smaller, more intimate events along the Croisette. One favorite of ours: Wake Up With The Economist. (It says a lot about Cannes that these start at 10:30am.) The programming here is focused squarely on top marketers, and the environment is casual. More info is here.

But if you have to go to the Palais, be sure to check out “An Insider’s Guide to China” with Tencent’s Kiki Fan, who promises to give first-hand information on the consumption habits of “hundreds of millions of digital natives” in China. 10am.

Snap CEO Evan Spiegel will interview Reddit CEO Steve Huffman about “human connection, communities and communication on the internet.” We’re told the hour-long event is private — like Snapchat. 12pm at WPP Beach Stage.

Facebook’s Carolyn Everson will sit down with WPP CEO Mark Read, Kimberly-Clark CMO Giuseppina Buonfantino and Digiday alum Tanya Dua to talk about “the biggest topics that will capture conversation for the week.” Wonder what that could be. 2:30pm at Facebook Beach.

Calling all data people and the data-curious. Our partners at Salesforce and Datorama are hosting programming about personalization and a cocktail party at the Dato House, 4 La Croisette, starting at 3:30pm. Register here.

Nightcap
5:30pm: Hulu and Spotify will host a “special acoustic performance” by Ciara at a private villa. See if you can get on one of their shuttles by The Martinez or the Palais.

7pm: MediaLink is co-hosting an opening night party with Condé Nast and Google at MediaLink Beach. Music by DJ Millie Cotton.

8:30pm: We are hosting the Digiday Media Leaders Dinner outside Cannes in Grasse. We’ll have a report tomorrow on some choice (anonymous) overheards from the conversation.

10:30pm: Variety and VideoAmp are kicking off Cannes at the rooftop bar of the JW Marriott.

The post Cannes Briefing: The storylines that will dominate the conversation at Cannes this year appeared first on Digiday.

“Within the first year of ‘Stay Tuned,’ we were like, ‘Whoa, we have something here, and we need to think about where else this could go. It’s big for us to be where the people are, where the young audience is,” Grande said.

Snapchat is still king for “Stay Tuned” in terms of effort and audience size. It’s also the only direct revenue driver (though that could change once the show’s YouTube channel crosses the platform’s minimum monetization threshold). The Snapchat channel averages between 25 million and 35 million unique visitors per month, according to NBC News, citing data from Comscore. The Comscore data also shows that between 25% and 30% of its Snapchat audience also watches NBC News on other digital platforms. About 75% of the audience is under 25, and 90% is under 34, according to Snapchat’s data provided to NBC News.

In January, “Stay Tuned” launched a TikTok account and is still one of few publishers actively using the short-form video app. The team initially began posting behind-the-scenes or other comedic clips starring the show’s talent but has since focused on sharing a daily news item.

“We saw them [TikTok users] doing all these dance challenges, silly things. We’re a respectable news brand, what do we do? But we started doing funny things, and we were like, ‘Uh.’ I thought what if we take a single news story of the day, tell it less than 20 seconds, give it sound effects,” Grande said.

Views of the 15-second videos on TikTok range from hundreds of thousands to the “low” millions of views, said an NBC spokesperson. The account has nearly 87,000 followers, though most of the views come from appearing on the “For You” page, TikTok’s main feed.

Even though TikTok doesn’t have monetization for publishers at the moment (unlike on Snapchat), Grande said she sees TikTok as a place to drive viewers to Snapchat, Instagram and YouTube.

In late 2018, “Stay Tuned” began thinking more about YouTube as a way to expand its video efforts. Instead of simply reposting videos from its Snapchat show (as it does for Instagram Stories), “Stay Tuned” decided to create unique explainer videos. Topics include why reality TV is so popular, how to file your taxes and how to get an internship.

“We started to post explainers once a week in February. We try to think of what are teenagers Googling or just things that they should know. Right now, we’re focused on producing really good content on YouTube, getting our voice down,” Grande said.

Most of its videos on YouTube have garnered under 1,000 views. The most-watched video with more than 8,600 views is titled, “What were the STONEWALL RIOTS?” The channel has 2,900 subscribers. (YouTube channels need a minimum of 1,000 subscribers and 4,000 hours of annual watch time before they are eligible to run ads, according to the platform’s policies.)

Despite “Stay Tuned” growing across platforms, the team size has stayed fairly the same since the launch in July 2017. The franchise has three anchors (Savannah Sellers, Gadi Schwartz and Lawrence Jackson) and a mix of producers, editors, writers, researchers and bookers. Andrew Springer, who worked as the executive producer at launch, left NBC News last month. Grande, who previously worked under Springer, was promoted to his role.

NBC News declined to comment on revenue of “Stay Tuned” and if the division is profitable. It currently makes money exclusively via ads on Snapchat.

Grande said the team is focused on TikTok and YouTube at the moment.

“We’re always watching where our audience is, and we’re going to watch where our audience goes, and as things develop, as there are other places where need to be, we’ll evaluate,” Grande said.

The post NBC News expands ‘Stay Tuned’ from Snapchat to other platforms, including TikTok appeared first on Digiday.

It can be easy to forget in those Instagrammable moments and rosé-tinted conversations the fact that regulators from the U.S. to Singapore are closing in on Facebook and looking to impose restrictions on the company’s business practices. After years of moving fast, Facebook is now reckoning with what it broke — and the calls for not just regulation, but in some corners, a larger break-up of the company, are only getting louder.

Facebook is not alone in facing a serious external threat. Google and Twitter, fellow beach space hosts along the Croisette, are fending off heavy criticism with regard to how they handle brand safety and user behavior on their platforms. After years of watching tech giants ranging from Netflix to YouTube siphon away viewers (with the added fear of the platforms eventually taking a bigger cut of ad dollars), large entertainment companies such as Disney, NBCUniversal and WarnerMedia are making large-scale investments in streaming video while modernizing their advertising businesses. Digital publishers are struggling to diversify businesses after ceding the digital ad market to the duopoly. On the buy side, agencies are facing down the dual forces of cost-cutting clients and competition from well-capitalized consultancies. Brand clients, meanwhile, are worried about challenger DTC brands eating their lunch, while those same DTC brands grapple with rising marketing costs on performance platforms. And the ad tech middlemen? Well, many of them just hope to keep the lights on as the sector deals with bankruptcies, layoffs, heavy debt loads and jittery investors.

In Cannes this year, no business or industry feels completely safe.

Crises on all corners
This year, Google will be hosting “pride celebrations” and panel sessions on inclusive marketing at its own beach space. But its video behemoth YouTube still struggles to restrict the dissemination of toxic content — including those that target people of a different race, gender and sexual orientations — and often, when such unsavory videos are unearthed, YouTube has had trouble reacting as quickly as some of its critics would like. Has this affected YouTube’s business? Has any major platform, from Facebook to Twitter, taken a business hit for a smorgasbord of brand safety issues? Outside of short-term and PR-savvy advertiser boycotts, not really.

Governments, however, are a different story. Google has already incurred billions in antitrust fines from the European Union, and Facebook is expecting to take a $3 billion to $5 billion hit from the U.S. for violations tied to a privacy settlement in 2011. Presidential candidates are talking about breaking up big tech.

Meanwhile, big media giants including Disney, NBCUniversal, Viacom and WarnerMedia are expected to show up big in Cannes. They will talk about the scale of their businesses, the premium nature of their programming, their experienced storytelling capabilities and how they can bring advertisers into the fold. But it’s also true that linear TV ratings are continuing to decline, and the vaunted power of TV advertising is on shakier ground when more and more viewer time and attention is going to ad-free environments.

These media giants are secure in the knowledge that the $70 billion TV ad spending is still largely going toward legacy media companies. But it would be foolish to ignore the amount of investments Google, Facebook, Amazon, Roku and other platforms are making to get a greater share of TV ad dollars — especially as TV viewing increasingly moves towards apps that are distributed in internet-connected TV ecosystems controlled by these tech giants. HBO needs Amazon and Roku if it wants people to subscribe to its streaming service.

For agencies, the threat of consultancies is not going away. In research conducted by Digiday in April, 22% of 73 client-side marketers said they were going to shift work from traditional agencies to consulting firms. There are some promising signs in that consultancies still lag in terms of creative capabilities, as well as the ability to execute on media strategy instead of only being able to tell marketers what they’re doing wrong. But when Accenture Interactive buys Droga5 for a price tag that could be as high as $475 million, it’s hard to remain flippant about whether consultancies can eat into the agency business.

These are just some of the big challenges confronting major players in media and marketing. Beyond tech platforms, big media giants, ad agencies and consultancies, publishers and ad tech vendors are still fighting to prove that their businesses can be sustainable over the long term while under the shadow of constant layoffs, bankruptcies and fire sales.

What’s the real purpose of Cannes?
Cannes Lions was created to be a celebration of creativity in advertising, but that can be hard to tell when so much time and money is spent on boozy parties, giant yachts, castle dinners and everything else that happens away from the Palais des Festivals.

Cannes now is so sprawling it has many different ecosystems. Talk to one person, you’ll hear it’s a meaningless boondoggle. Talk to another, you’ll hear it’s the most important part of their year.

In a Digiday+ survey, 47% of 218 media and marketing executives said Cannes is still about celebrating creative work in advertising; an almost equal amount, 44%, said it used to be but isn’t now.

“Every time I go there, it’s just a gathering of people who rent boats to speed-date and party on,” says a top executive at a prominent digital media company who will not be attending Cannes Lions this year. “People are spending millions of dollars to compete with each other — Snapchat had a roller coaster or something? [Editor’s note: It was a Ferris wheel.] — but it’s not the place you go to have the most productive, authoritative conversations about your business.”

It’s fair to argue that Cannes was not envisioned as a place for the business side of the media and marketing industries. It’s a “Festival of Creativity,” after all, and therefore the focus should remain the creative side of media and marketing.

But it’s also true that what Cannes Lions was originally intended for is not what the festival has become today. What began as an event attended by creative production companies and ad agencies has ballooned into a gathering of all corners of media, technology, entertainment and marketing. And many of these companies are coming to Cannes to do business.

“Cannes hit peak Cannes when you started to see 10 people from a single platform or ad tech company and when you’d ask them what they were doing here, they’d say, ‘We’re here to sell,’” says an ad agency CEO. “That was never the goal.”

If the festival has increasingly, albeit “unofficially,” skewed more toward the business side of media and marketing, then it’s important to talk about the state of those businesses. The outlook there? It’s not rosy.

A more serious party
To some degree, sobriety has come for Cannes. Facebook, for instance, will have staffers on-site at its beach space to answer any and all questions attendees might have about how users can control privacy on Facebook; and in closed-door meetings with clients, Facebook will share information on what a more private Facebook looks like in the future.

“A big part of the conversations we are having with partners, both in the beach space and in closed-door meetings, is talking through some of the actions we have taken in the last 18 months to two years around election integrity, data privacy, brand safety — as well as how we are building toward a more privacy-focused future,” says a source familiar with Facebook’s plans.

The big media companies will make their respective streaming plans a key part of almost every pitch, according to sources at those companies. Even if there isn’t a specific product to show, broadcasters want to lay the breadcrumbs now as they seek ad commitments at a later date.

Executives at agencies ranging from Leo Burnett to McCann Worldgroup and Wunderman Thompson told Digiday that business remains a key part of their Cannes itinerary — whether that’s catching up with clients, finding new partnership opportunities for them, or in some cases, even putting the moves in place to win some new accounts down the road. (Talent recruitment will also be a big part of what some top agency execs are planning for this year’s festival.)

How far these conversations will go in having a material business impact and solving real problems that every corner of media, marketing and technology face is still anyone’s guess.

But bring on the show.

The post Riviera Mystique: In Cannes, no industry is safe appeared first on Digiday.

“We have the relevance that MTV had years ago: we’re the guide for what to listen to and what to wear, and celebrities follow us in a similar way to how they followed MTV,” said Christian Baesler, president of Complex Networks. “Streetwear and fashion are big in other markets — Europe and Asia — and we have not approached those markets in an owned and operated way.”

About 40% of Complex’s website audience today exists outside of the U.S., Baesler said; and the company’s programming on YouTube is also global; but prior to this year, Complex Networks hasn’t looked to build international offices and infrastructure. That will change as Complex determines the best course of international expansion, starting with Asia, Europe and other established markets.

“We’re trying to avoid the Vice mistake of going into too many markets too fast,” said Baesler. “Where does it make sense to go in an owned-and-operated way and where does it make sense to partner with an organization that already has an infrastructure in place and can help us get into that market faster from a production and sales perspective?”

Complex Networks has already secured a few distribution deals to bring its programming to new regions. Last year, Complex signed a deal with iFlix, a free video streaming service that serves countries in Southeast Asia, Africa and the Middle East. As part of this deal, iFlix licensed six shows including “Hot Ones” and “Sneaker Shopping,” and has created localized versions of “Hot Ones” for Indonesia, Malaysia and the Philippines. Earlier in June, Complex also signed a deal with Canadian broadcaster Corus Entertainment, under which Corus will license “Hot Ones” and “Sneaker Shopping” to broadcast on TV and digital, respectively; Corus will also co-produce new original series with Complex and will serve as the digital publisher’s ad sales partner in Canada.

“We’re not going to scale the business side by diminishing the value of the brand,” Baesler said. “As we expand into each new market, whatever we do will stay true to our core, which is more important than just getting new revenue,” Baesler said.

A growing, profitable business
Complex is on track to exceed $200 million in revenue this year, with half of that revenue coming from-non advertising sources such as video productions and licensing, commerce and events, according to a Business Insider report from earlier this year. Overall, Complex’s revenues are expected to grow by 20%, the report said.

Among newer and growing revenue streams, events — Complex is expanding its signature ComplexCon to Chicago this year — will account for 15% of overall revenue this year, said Rich Antoniello, CEO of Complex Networks. Next year, Complex aims to do three or more events domestically and internationally, Baesler added.

Other revenue streams include commerce, which is on track to account for as much as 10% or 11% of revenue this year, Antoniello said, and studio productions, video licensing and syndication, which will bring in about 30% of overall revenue.

Antoniello said the diversified revenue portfolio can be attributed to the fact that Complex committed to creating longer programming and building franchises at an earlier stage. In 2017, the company hosted a small NewFronts presentation at Neuehouse in New York City with a fairly ambitious announcement: Complex was going to move from doing about a dozen daily and weekly shows to as much as 40 by the end of the year (Complex ended up growing to 33 shows by the end of 2017). And at a time when many digital publishers were focused on short formats for the Facebook news feed, Complex was focused on YouTube and shows that had 15- to 20-minute episodes. These shows, which include “Hot Ones,” helped Complex venture into licensing, merchandise and events.

This year, Complex will spend 10% more on content than last year, and that does not include “massive” investments in expanding ComplexCon and other business areas, Antoniello said. “We’re not waiting for Facebook to pay us,” he added.

Complex Networks in a post-Go90 world
Now jointly owned by Verizon and Hearst, Complex Networks was also one of the biggest beneficiaries of Verizon’s spending spree for Go90; the company received $150 million, according to Business Insider, which was paid out over multiple years, sources have previously told Digiday.

Antoniello said Complex Networks did not wildly spend its Go90 funds and instead used that money on programming which it’s still producing and licensing to third parties today: “QB1: Beyond the Lights” was originally a Go90 show and now be found on Netflix, with a new season funded by Netflix coming out later this year.

“The Go90 investment is now gone,” said Antoniello. “But we have replaced a great deal of that with other situations.”

Overall, Complex is licensing 10 of its existing shows to Hulu and six shows to Netflix. Complex is in conversations with Netflix for new seasons of other shows the company is licensing to the streaming platform, according to a source.

“It took a long time for us to break through on the ad side; the distribution side did not have a problem because they are evaluators, they’re not as romantic about things,” said Antoniello. “When we had conversations with Netflix, they had already done the homework and saw what happens on Twitter when we drop a new episode of ‘Hot Ones.’ Whether it’s Netflix or Hulu, we are not getting these deals by accident. No one is doing this for us out of charity.”

A disciplined approach to growth
Complex Networks had its own huge pivot to video heading into 2016 when the company moved more than 80% of its text budget to video, Antoniello said. The plan was to create programming and develop talent in-house, which could draw loyal, repeat viewers.

But Complex’s original investment in video came in 2012, when the company started with daily programming with brands such as Complex News. That initial investment was smaller — about 10% of the content budget — but success was tied to how much those revenues helped increase ad revenue on the site. This included basing bonuses for editorial and sales teams on ad revenue growth, Antoniello said.

“Every dollar you spend makes you feel better about the optics and further away from profitability — that’s why our teams never fell in love with the Facebook view,” Antoniello said.

Antoniello credits the original “disciplined” approach to video in Complex’s decision to focus on longer programming that can lead into multiple-revenue-generating video franchises. It’s helped with profitability — Complex is on pace to do $30 million in profits, according to Business Insider, though those profits are returned to the company’s owners.

For Complex, the plan forward — through international expansion, events and commerce — is to be less and less reliant on advertising.

“If we can get one third [of our business] to be advertising and we can get our licensing and syndication up to 35-40%, we are going to be in amazing shape,” Antoniello said. “Those are long-term, repeatable revenues.”

The post With MTV’s growth as guide, Complex targets international expansion appeared first on Digiday.