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Before Boston-area blasts, NiSource utility increased pipe replacement effort

Energy

Power Forecast Briefing: Fleet Transformation, Under-Powered Markets, and Green Energy in 2018

Trading Of US Linear TV Advertising Shifting To Programmatic Trading

Every Industry Is Now A Technology Industry

Online Video Bolstering Consumer Home Video Spend, Spearheaded By Subscription Streaming


Before Boston-area blasts, NiSource utility increased pipe replacement effort

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In the years leading up to a deadly series of explosions and fires in Boston suburbs Sept. 13, Columbia Gas of Massachusetts had been trying to eliminate aging materials from its pipeline distribution system.

The NiSource Inc. subsidiary has steadily decreased the proportion of its system that is made of outdated materials, including cast iron and steel without certain corrosion resistant treatment, while also repairing more leaks on its gas mains and service lines, according to an S&P Global Market Intelligence analysis of federal pipeline data.

Iron and bare steel pipes are more leak-prone than more modern materials, so the U.S. Pipeline and Hazardous Materials Safety Administration and state pipeline safety regulators have pushed companies to upgrade their systems by eliminating aging infrastructure. The company had told communities in the area that it would be performing pipeline safety upgrades the day of the incident.

Columbia Gas of Massachusetts, known formally as Bay State Gas Co., has a pipeline modernization program in the works, as evidenced by the shifting proportions of materials on the company's system over time. As recently as 2013, about 20% of Columbia Gas of Massachusetts' gas mains and service lines were made of the more leak-prone materials. By 2017, that figure had fallen to about 13.75%.

Over 2013-2017 the number of leaks the company repaired annually has generally risen, while proportion of the leaks from corrosion have fallen in that time from 35.15% to 21.45%. Leak repairs related to causes classified as "other" — which can include vehicle damage and fires or explosions not originating with the gas system, among other causes — saw the greatest increase, reaching 47.18% of reported leak repairs for 2017.

According to the Massachusetts State Police, emergency responders dealt with 70 instances of explosions, fires and gas odor calls across dozens of blocks in Lawrence and North Andover, Mass., starting in the evening on Sept. 13. An 18-year-old resident of Lawrence died during the incident, and a local hospital treated about a dozen others for injuries.

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The National Transportation Safety Board, an independent agency tasked with investigating safety incidents on pipelines and other transportation systems, will take the lead on the investigation and will work with other regulators. Columbia Gas of Massachusetts has shut off gas service to the area, and the utility has to visit each of the 8,600 impacted customers in the area to shut off gas meters and conduct safety inspections.

Multiple transmission pipelines crisscross the Columbia Gas of Massachusetts' Merrimack Valley service territory, including Tennessee Gas Pipeline Co., Portland Natural Gas Transmission System LP and Maritimes & Northeast Pipeline LLC.

Sens. Edward Markey, D-Mass., and Elizabeth Warren, D-Mass., on Sept. 14 called for a Congressional hearing on the incidents to understand how the disaster occurred and what can be done to ensure "these types of dangerous accidents do not happen again." Similarly, Democrats in the U.S. House of Representatives' Energy and Commerce Committee said they would be watching the events and investigation closely.

"As the committee with jurisdiction over natural gas and the pipeline system that transports it, we need to understand what happened, why it happened, and ensure it never happens again," Rep. Frank Pallone Jr., D-N.J., who serves as the ranking member, said in a Sept. 14 statement.

The Pipeline Safety Trust, an independent industry watchdog, declined to speculate on what might have caused the incident but expressed high confidence in the NTSB investigation process. Authorities identified over-pressurized lines as potentially at fault.

"We also hope that if the problem demonstrated so dramatically here is something that could occur in other areas of the country that the Pipeline and Hazardous Materials Safety Administration will soon release national guidance or safety orders to ensure the safety of us all," Carl Weimer, the trust's executive director, said in a Sept. 14 statement.


Watch: Power Forecast Briefing: Fleet Transformation, Under-Powered Markets, and Green Energy in 2018

Steve Piper shares Power Forecast insights and a recap of recent events in the US power markets in Q4 of 2017. Watch our video for power generation trends and forecasts for utilities in 2018.


Technology, Media & Telecom
Trading Of US Linear TV Advertising Shifting To Programmatic Trading

Oct. 08 2018 — Both buyers and sellers of traditional linear TV advertising, not including connected TV or over-the-top video, are moving toward the adoption of programmatic trading. In 2017, Kagan estimates that $690 million or 0.9% of total linear TV spend was traded programmatically. Within the next five years, that figure is expected to climb to $9.76 billion or nearly 12% of total linear TV advertising revenue. MVPDs are forecast to trade the greatest percentage of their ad inventory programmatically in 2022 with 30% of ad revenue from programmatic trading.

Kagan defines programmatic trading as being automated and data-enhanced, not just one or the other. Trading may be through a private or open marketplace and does not have to be through an auction, which is more common in digital video advertising.

There are several issues holding participants back from programmatic trading. Unlike digital programmatic marketplaces, where there is a seemingly unending supply of ad inventory, linear TV has a finite supply. Demand for TV inventory exceeds the supply, so there is still an attitude of "If it isn't broken, don't fix it." TV ads are also bought well in advance, not immediately.

While many agencies have experimented with the programmatic trading of linear TV, not all are on board. Many of the advertisers and agencies are interacting directly with the supplier platform rather than going through a demand-side platform, or DSP, today. In their experiments, the agency needs to use separate platforms to aggregate inventory and tie it together, which is a lot of work.

The lack of inventory is one factor holding back programmatic trading. The only way it takes off is to make linear TV inventory available in some type of buyer platform that can combine the various supply platforms. It is even more complicated when the buyer wants to bring in connected TV (OTT).

Agencies do like the automation capabilities of programmatic, particularly where the process takes a lot of time. An algorithm may do better in areas such as weighting estimation, the first pass at scheduling and the negotiation process as well as postings and billings. The process of buying inventory is not difficult, but computing where a buyer will be able to find its preferred audience is. Therefore, interest in automating the planning and analysis to find an optimal audience is high.

We forecast a gradual uptake for programmatic trading with continued testing in 2018. Broadcast stations and networks, cable programmers, and MVPDs need to add more inventory to programmatic platforms before agencies begin using it in earnest. It will take time for all parties to feel comfortable transacting in a new way.

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Technology
Every Industry Is Now A Technology Industry

Highlights

And every company is now a technology company.

Sep. 28 2018 — As machine learning (ML), artificial intelligence (AI), and robotics become commonplace and enter the operations of mainstream organizations, leadership teams are finding that failure to harness and leverage AI puts them behind the competition. Repeatable tasks are carried out by bots in a fraction of the time and employees are more focused on adding value, which means companies on the forefront of technology can be more reliable, more user-friendly, and faster to market.

In this highly disruptive environment, one traditional truth of business has withstood, or has perhaps even guided, these technological advances: above all, the customer experience is king. More than ever before, businesses have effective technologies at their fingertips to quickly and effectively address customer pain points, while at the same time dramatically improving their internal operations.

At S&P Global Market Intelligence, we strive to get beyond the buzzwords and truly deliver essential insight. And second to this, we strive to adopt real operational efficiencies into our delivery that are paralleled by the workflow efficiencies we promise to our customers. To that end, we are committed to remaining on the cutting edge of emerging technologies, first through optimization, then automation.

Download a recent analysis of how we’re applying new technology like natural language processing to structure data, robotic process automation to deliver insights faster, and predictive analytics to stay ahead of the market.

You can also view this analysis in Spanish, Portuguese, Mandarin, and Japanese.

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Natural Language Processing – Part II: Stock Selection

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Natural Language Processing, Part I: Primer

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Technology, Media & Telecom
Online Video Bolstering Consumer Home Video Spend, Spearheaded By Subscription Streaming

Highlights

The following post comes from Kagan, a research group within S&P Global Market Intelligence.

To learn more about our TMT (Technology, Media & Telecommunications) products and/or research, please request a demo.

Sep. 20 2018 — Spending on home entertainment is rising toward levels not seen since 2004, when consumers spent $24.37 billion building massive home-video libraries of DVDs and VHS cassettes. Since then, the optical-disc market saw more than a decade of significant declines as consumers shifted to digital entertainment. By 2012, total spending on home entertainment was down to $20.13 billion, with $4.13 billion coming from online video while DVDs and Blu-ray discs accounted for $12.88 billion and multichannel PPV/VOD contributed the remaining $3.13 billion.

Fast forward to 2017 and the mix of consumer spending has changed significantly. Consumers spent a total of $22.62 billion on home entertainment from multichannel, online and disc retail/rental sources. Online spending accounted for $13.00 billion of that total while spending on discs dropped to $6.84 billion and multichannel PPV/VOD shrank to $2.79 billion.

While the data might seem like good news for traditional providers of home entertainment, a key component of the growth in digital spending is the rise of subscription video on demand. The majority of online spending is going to over-the-top services like Netflix, Hulu and Amazon Prime, which increasingly have focused on creating original programming (mainly episodic TV) rather than licensing content from Hollywood studios.

Removing subscription streaming from the consumer spending pool paints a less favorable picture for traditional content providers. In 2012, consumers spent just $1.43 billion on non-subscription online video purchase/rental, and a total of $17.44 billion excluding the SVOD component. By 2017, while consumer spending on online video overall had risen to $13.00 billion, some $10.47 of that came from streaming subscriptions versus $2.53 billion from online video purchase/rental, and total home-entertainment spending was just $12.16 billion excluding SVOD.

Spending on sell-through home video peaked in 2006 when consumers shelled out $16.53 billion for DVDs and VHS cassettes. Since then spending has declined by hundreds of millions (sometimes billions) each year. In 2017, consumers spent $6.50 billion on DVD and Blu-ray sell-through and electronic sell-through. This seems to suggest that people are becoming less and less interested in adding to their home-video libraries and are turning to the more affordable streaming options. The story is similar for the home-video rental segment, which saw consumer spending peak in 2001 at nearly $8.45 billion before dropping to $2.87 billion by the end of 2017.

This has to be a somewhat unsettling trend for the major film studios, and is likely a key factor in shifting their strategy to focus on major franchise films and low-cost genre fare. The former tend to have broad worldwide appeal and can still move enough video units to help offset their high production and distribution costs. The low-cost genre fare, on the other hand, may be more risky and not sell as well internationally, but has a fair chance to break even. If the latter films lose money, the successful franchise films typically cover the losses.

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US Online Video Outlook To Eclipse $15B In 2018

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DVD, Blu-ray Spending Down $1B-plus For 11th Year In A Row

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