In today's ExchangeWire news digest: Norwegian telecoms firm Telenor sells ad tech Tapad to Experian; YouTube sparks backlash after monetising videos made by creators who are not part of the company's Partner Program; and cord-cutting slows in the US over Q3, but experts expect the trend to resume pace.
Telenor sells Tapad to Experian
Norwegian telecoms firm Telenor has sold its ad tech subsidiary Tapad to Experian. The move, which had been recommended by industry consultant LUMA Partners, saw Experian attain full ownership of the cross-device unit in exchange for around USD $280m (£209.6m) in cash.
Experian believes that the deal will help it to optimise all forms of its digital offerings, but will put greater emphasis on using the technology to improve its solutions for advanced TV. In a press release, the company stated that the acquisition will enable it “to take advantage of expansion in the market for digital-advertising” and “enables Experian to help marketers create a relevant experience for consumers while continuing to ensure consumer privacy”.
The transaction comes less than 5 years after Tapad was first acquired by the telco firm for USD $360m (£269.5m). At that time, much ado was being made about the purported advantage telecoms companies had over competitors when it came to using first-party data to enhance advertising campaigns in real-time. However, Tapad was never fully integrated into Telenor’s operations, and the telco made comparatively little use of its assets.
Despite previous privacy concerns surrounding both Tapad and Experian, LUMA CEO and founder Terry Kawaja is confident that there’s nothing to worry about on this front. “The Tapad folks have an enviable record for how they’ve dealt with [privacy complaints], and Experian is eyes wide open in terms of what’s being done relative to the laws of the land,” he said.
YouTube inserts ads into videos by non-partners
YouTube has begun running ads alongside videos published by creators that are not part of its YouTube Partner Program. The move gives the Alphabet-owned video site further opportunity to monetise its platform without having to share their revenues with the content creators.
The company released an update to its terms of service last week which included the statement that YouTube has the “right to monetise all content on the platform and ads may appear on video channels not in the YouTube Partner Program.” The US-based firm reiterated that content creators who aren’t part of the initiative won’t be entitled to any of the revenue, but will be able to apply to be a part of the Program under the same criteria. The company also clarified that any payments made by YouTube to content creators in the US will be counted as “royalties” under US tax laws.
The move has unsurprisingly sparked significant backlash from YouTube content creators, with calls for the US government to disband the company and for channel-owners to unionise. Whilst accusations of exploitation made up the bulk of criticisms, some complained that the move overrules the wishes of creators who don’t want ads to run alongside their videos, whether that be due to ethical or viewing experience concerns.
It will be interesting to see how this backlash evolves, and whether it will escalate. With viewer frustration over the number of ads on the platform growing, as well as a sense of loyalty towards certain creators felt by their audiences, this move could prove one too far by YouTube.
US cord-cutting slows down in Q3, but likely to pick up again
The number of US consumers who are severing ties with their cable or satellite TV has fallen over the last 3 months. The quarter saw 4.6% of US households cut the cord with their traditional or virtual pay TV providers, according to MoffettNathanson Research. Whilst the figure is a mild improvement from the 5.1% and 5.2% recorded in Q1 and Q2 respectively, it’s still a significant jump from the 2.9% of households that abandoned their providers in the same period of 2019, and the firm anticipates that decline will soon increase again.
According to the research, the return of live programming – particularly coverage of live sports, such as Major League Baseball and the NBA – was enough for some households to keep their cords intact. Pay TV was also given a boost by political and news programming, which of course focused on the dramatic and somewhat contentious US election.
Virtual TV subscribers actually grew over the period, increasing by 21% to 11.5 million subscribers. For cable, satellite, and telco, however, consumers continued to decline. Craig Moffett, senior media analyst at MoffettNathanson Research, said that the findings suggest that pay TV’s future lies in rural households with fewer service options and sports and news viewers whose content needs aren’t being met by SVOD and AVOD services. “We might be getting closer to a “floor” of hardcore sports and news junkies. Whether that core ends up being served by traditional or virtual MVPDs remains to be seen,” he said.