Carriage agreements in streaming TV
In traditional broadcast and linear TV, network owners strike different carriage and inventory agreements between cable, satellite, or other pay-TV providers, granting rights to carry certain content or channels as well as access to certain advertising inventory.
The same is true in streaming TV, but it’s often more complicated given the many ways consumers can access content.
In streaming TV, media owners, who produce and own content, typically enter into agreements with content distributors, such as free ad-supported streaming TV (FAST) app owners and device manufacturers, to get their content in front of more viewers. These carriage agreements not only stipulate the rights for content and distribution, but also the specific rights for advertising and inventory splits.
This means that multiple parties could have authorized rights to sell a certain percentage of inventory for the same channel or program.
Often, these agreements are negotiated so that the rights to sell inventory within a channel are split between two parties. For example, a media owner may have an agreement to distribute their content through a device or connected TV manufacturer’s FAST app, who also has rights to sell a percentage of ad inventory.
While not as common, there are cases of 3-way inventory agreements, where a content owner, FAST app owner, and device manufacturer all have rights to sell their respective share of the inventory.
Types of inventory splits
There are several types of inventory splits—let’s take a look at each.
The first is at the request level, which means the media owner splits a portion of the inventory within a single ad pod with the content distribution app. This type of granular split has a high risk of affecting the viewer experience with duplicated ads or violations of competitive separation requirements since multiple entities serve ads for the same pod without visibility into each other’s final bid selection.
The second type of inventory split happens on a pod basis. For example, the media owner may retain rights to the first and second pod of a streaming session, whereas the app owner has rights to the subsequent pods.
And lastly, inventory can be split by streaming session, where one entity has inventory rights and is responsible for all ad pods within a streaming session. This arrangement typically results in the best viewer experience since one party can manage frequency and duplication throughout the entire viewing session.
Improving transparency in streaming TV
Carriage agreements and inventory splits make transparency in streaming TV all the more important. With multiple ways to access inventory, buyers need to understand both the audience they’re reaching and the content into which their ad will serve. This is critical for managing ad duplication, frequency, brand suitability, measurement, and optimization.
However, carriage agreements in programmatic streaming may include restrictions around what digital signals, such as identifiers or content data, distributors may or may not share within an opportunity.
For example, a device manufacturer may restrict app owners from using addressable identifiers, such as the device’s IP address or the identifier for advertising (IFA), even when the consumer consented for such information to be used. Without these identifiers, buyers may not be able to optimize for the audience they want to reach.
Carriage agreements with inventory splits are essential for media owners’ revenue and distribution streams.
However, they can make it more challenging for buyers to understand and verify which parties have authorized inventory rights. To articulate these agreements in bid requests, the IAB Tech Lab introduced inventorypartnerdomain within the app-ads.txt standard. The most recent release of OpenRTB 2.6 moves this field out of the ext object into the main app and site objects.
It’s imperative that both content owners and content distributors clearly define and represent authorized sellers in their app-ads.txt files and bid requests. Doing so ensures media buyers have full transparency into the source of each ad opportunity, which is essential to the future scale of the programmatic streaming market.