Content owners would appear to have little use for those who plunder their IP, but a big data startup that monitors over-the-top streaming TV usage believes the so-called "sharing economy" offers unparalleled insights into how hundreds of millions of people consume media. Now the company, Stamford, Conn.-based ad tech firm Tru Optik, has formed a deal with Mindshare, a major media agency, designed to help Mindshare better target marketers' ads.
While OTT giants like Netflix and Hulu keep their viewership data locked down behind walled gardens, Tru Optik says it boasts a sort of X-ray vision that allows it to see through all sorts of metaphorical barriers. Its technique is to measure all peer-to-peer file sharing activity enabled by the BitTorrent protocol, allowing it to aggregate and analyze the consumption of professionally produced content from Boston to Beijing.
But how valuable is this 500 million-person pirate's cove, and what exactly can media companies hope to learn from buying into Tru Optik's proprietary data set? According to Andre Swanston, co-founder and CEO of Tru Optik, digital file sharers actually over-index on paying for subscription-based video services and have demonstrated a keen interest in binging on ad-supported streaming video.
"Everything is driven by the sharing economy," Mr. Swanston said, deploying a phrase that is at once a euphemism for the unauthorized distribution of digital content (TV shows, movies, video games, software, etc.) and an acknowledgment of the collaborative consumption at the heart of services like Uber and Airbnb. "Who better to try and monetize than the users who until now have remained out of reach but who are obviously interested in your content?"
Media companies agree with Mr. Swanston's assessment of the piracy market. Netflix, for one, has said that it has set its pricing on acquisitions like Twentieth Television's "Prison Break" for its Netherlands footprint based on the show's popularity among the BitTorrent crowd.
Speaking to investors last month during his company's first quarter earnings "interview," Netflix CEO Reed Hastings said premium content is the key to converting thieves into customers. "Overall global piracy is a big problem and we're working with all the content owners, partially to be a great carrot, and also to have the other services like HBO and Amazon be great carrots," Hastings said.
Crackle and other over-the-top video services, for their part, have used Tru Optik data to inform audience acquisition campaigns.
In the deal announced Wednesday, Mindshare and Tru Optik said they will work together on a "micro-genre" graphing initiative designed to enable media companies to create more effective and relevant advertising.
The micro-genre graphs organize shows and other media content into clusters determined by the sort of audiences who tend to watch said titles. For example, a "badass urban super-heroines" cluster might feature the likes of Netflix's "Jessica Jones" and CBS' "Supergirl," and if the audiences are sufficiently distinct, that particular grouping may be wholly separate from another cluster that includes "comic book adaptations featuring millennial leads."
On a more molecular behavioral segmentation level, Tru Optik can narrow in on that rare breed of content consumer who plays EA Sports' FIFA 16, is a huge fan of the "Paul Blart: Mall Cop" film franchise and binges on FX's Cold War spy drama "The Americans."
In theory, the psychographic profiles can be used to create a mosaic of consumers who may also be in the market for a particular product or service. While specifics are hard to come by at this stage of the partnership, the Mindshare client that would seem most likely to be an early adopter of the micro-graph offering is Lionsgate. "The ability to market entertainment properties across any platform to millions of consumers who have a proven interest in similar content is unprecedented," said David Wiesenfeld, Chief Strategist at Tru Optik. "If you're advertising a new movie, you can target consumers who have watched similar movies on a one-to-one basis, at scale."
Movie marketing aside, the marriage of the two company's core competencies ultimately is expected to engender a much greater degree of micro-targeting across all ad categories.
"Working with Tru Optik, we are able to identify focused content groupings based on their appeal to a certain segment of consumers," said Sameer Modha, partner-customer data strategy at Mindshare Worldwide. "We thought Tru Optik would be the ideal partner, as the sheer size of Tru Optik's database allows our media clients to market their content directly to consumers in those segments at scale all over the globe."
According to Mr. Swantson, the P2P economy offers insights into consumer preferences that Nielsen's panel-based measurement can't touch. For one thing, there is very little correlation between the shows that are popular on linear TV and those that are pirated with the greatest frequency. Two of the five most popular TV series accessed via OTT and other less-official means include "Arrow" and "The Flash," two comic book strips that average just 3.16 million viewers on the CW. To be sure, there are some biggies being swapped via BitTorrent sites -- AMC's "The Walking Dead" and HBO's "Game of Thrones" are at the top of Tru Optik's fourth-quarter 2015 list -- but the remainder of the top 20 includes such low-impact TV shows like NBC's recently canceled "Heroes Reborn," ABC's declining freshman phenom "Quantico" and the it's-anyone's-guess-how-many-people-are-really-watching Netflix serial "Narcos."
"When we look at the number of people who are streaming 'Jessica Jones' and 'House of Cards' and 'Narcos,' we're monitoring more activity on these OTT 'channels' than Netflix has paying customers," Mr. Swantson said. "We have more first-party data on content consumption than can be found inside any walled garden."
The micro-graphs will be deployed by Mindshare in its proprietary data visualization and communication "war room," The Loop, which allows the agency to make collaborative and adaptive decisions for their clients in real time.
Clients aside, media companies that sell IP to services like Netflix would seem to have a keen interest in kicking the tires on the Tru Optik data. Because Netflix refuses to disclose how many people watch shows and movies on its platform, a better sense of the popularity of a given title might provide the studios some leverage when negotiating rights fees for a new or returning series.