FreeWheel has released its Q3 ’15 Video Monetization Report (VMR), which reveals the continuation of a number of important industry trends. Both ad views and video views grew 28% vs. Q3 ’14, consistent with growth rates seen over the past few quarters.
Live video was once again the fastest-growing genre, with a 113% year-over-year growth, compared to 30% for long-form and 9% for short-form. Sports was again the biggest driver of live with 63% of sports video viewed live, compared with 17% of news video viewed live (other genres were in low single digits). News had the biggest proportion of short-form (76%), while Entertainment (60%) ad Kids (59%) had the biggest proportion of long-form.
Online video is not yet a gold-plated experience; we’ve all had the experience of clicking to watch a video only to have the picture quality stink or multiple interruptions/buffering occur. To help understand the consequences of lower quality video, Conviva has released results of a 500-user survey which shows how viewers react to these problems.
When a viewer encounters poor picture quality, 17% give up immediately, with 59% waiting a short while, and 24% waiting as long as it takes. For excessive stream interruptions/buffering, 25% give up immediately, with 59% waiting a short while, and 17% waiting as long as it takes. Almost half of respondents (48%) said they remember poor experiences, and of these, 92% said they gravitate back to video services where they had positive experiences.
Perhaps the biggest question weighing on the pay-TV ecosystem these days is whether younger viewers who have acclimated themselves to a strictly SVOD diet will eventually become pay-TV subscribers or whether they’ll remain “cord-nevers.”
The traditional narrative is that as younger viewers settle down, buy a house, make more money and have kids they’ll end up subscribing to pay-TV just like their parents did. With the booming array of inexpensive OTT substitutes, that expectation has become feeling ever more tenuous.
But a new survey of 1,111 U.S. 18+ year-olds by Clearleap seems to suggest the narrative still has legs, with 91.3% of those over 30 years-old saying they either currently or previously subscribed to pay-TV. That’s a big jump from the 73.5% of 18-29 year-olds that said they have subscribed at some point, which means 26.5% of the age cohort are technically “cord-nevers.” 64.4% of 18-29 year-olds say they currently subscribe to pay-TV while the subscription rate for all respondents to pay-TV was 78.9%.
AOL has released its 2015 U.S. State of the Video Industry report, finding, among other things, that 91% of media buyers surveyed said they’re now buying some of their online video ads programmatically, up from 53% in 2012. AOL found that 68% of advertisers have either brought programmatic video buying in-house or plan to next year. They’re doing so primarily to achieve greater buying efficiencies and because they’re skeptical of their agencies’ programmatic expertise.
Magid has released new research commissioned by Watchwith finding that in-program native video ads have higher levels of unaided ad recall and improved brand metrics vs. traditional TV ads.
Watchwith recently unveiled the in-program native ad format which is an interactive overlay placed on a TV program streamed to a desktop, mobile device or connected TV. The ads can be contextually relevant to the underlying program itself using frame-by-frame metadata. Watchwith is positioning these ads as creating new, high-value inventory for TV networks to monetize their streamed TV programs.
According to eMarketer’s latest forecast, by 2017, programmatic will account for 65%, or $7.43 billion, of total online video ad spending of $11.4 billion.
eMarketer has also increased it forecast of programmatic’s share of online video spending in 2015 and 2016. For 2015, eMarketer is now estimating 39%, or $2.91 billion, of online video advertising will be done programmatically (vs. the prior forecast of 28% or $2.18 billion). For 2016, eMarketer is now estimating 56%, or $5.37 billion, of online video advertising will be done programmatically (vs. the prior forecast of 40% or $3.84 billion).
More evidence today that viewers are turning to their mobile devices to watch online video. However, it appears that monetization is lagging.
A new report from JW Player finds that 36% of viewing is done on mobile devices (30% on smartphones and 6% on tablets). Despite this, JW found that just 10% of video ads are delivered in an HTML5 mobile-compatible format. JW believes the key issue is that 60% of ads are delivered using VPAID, which is Flash-only and not supported on iOS devices.
Topics: JW Player
Late last week Conviva launched a new, free data portal which provides a range of video experience metrics. Data for the last 4 quarters are available and are sorted by 4 tabs: General, Content, Region and Device. Each tab provides 5-6 graphics with key metrics. The data is drawn from a large sample as Conviva is monitoring 4 billion streams per month across 180 countries, with 2 billion devices reporting per month.
New research from Digitalsmiths shows relatively muted interest in switching/dropping pay-TV providers, strong appeal of customized, a la carte pay-TV channel lineups, high awareness and usage of OTT services, and low adoption of TV Everywhere, among other things.
Just 7.7% of respondents said they’d switched pay-TV providers in the last 3 months (up from 6% in Q2 ’14). Less than 15% of respondents said they might either cut their service, switch to pay-TV providers or move to an online app or rental service in the next 6 months, an improvement vs. Q2 ’14.
While 76.6% of pay-TV subscribers are satisfied or very satisfied, 23.4% are unsatisfied, an increase of 6.1 percentage points since Q2 ’13. For those unsatisfied, the top 3 reasons were “increasing fees for cable/satellite service,” “increasing fees for Internet service” and “poor customer service.” Digitalsmiths found the top 3 predictors of satisfaction were monthly bill, ease of finding linear content and ease of finding VOD content.
Categories: TV Everywhere
Research firm Magid has released new survey data showing that robust OTT options are by far the most important driver of cord-cutting interest among those who say they’re likely to cut the cord. Magid found that OTT-related reasons were cited by a combined 77% of would-be cord-cutters, up from the 76% that cited OTT reasons in 2014 and 54% in 2013.
Per the chart below, the top 3 reasons cited by would-be cord-cutters were: “I am satisfied with online streaming options like Netflix and Hulu” (50%), “I can watch the TV shows and movies I like on the Internet” (41%) and “I have entertainment options on the Internet” (41%).
Categories: Cable TV Operators
Ooyala has released its Q2 ’15 Global Video Index, once again highlighting the shift toward mobile video viewing. For Q2 ’15, Ooyala found that 44% of online video views occurred on mobile devices, up from 42% in Q1 ’15 and 27% in Q2 ’14. Ooyala forecasts mobile viewing will surpass 50% of online video views by the end of 2015 if not sooner.
Categories: Mobile Video
Innovid has released its Q3 2015 State of Interactivity Report, based on a survey of 200+ U.S. media buyers in August, which provides insights about their priorities and preferences. Per the chart below, over 92% of respondents said they’re currently buying pre-roll video ads, slightly ahead of display. Mobile video was fourth with 85% buying it. Further down in the eighth position was Interactive Video (61%) and in tenth position, connected TV (55%).
Last Friday Adobe released its U.S. Digital Video Benchmark for Q2 ’15, showing, among other things, surprisingly stagnant adoption of TV Everywhere over the past 4 quarters. According to Adobe, active viewership of TVE among pay-TV viewers stood at 12.7%, exactly the same rate as in Q3 ’14 (and down a bit from 13.2% in Q1 ’15). However, the Q2 ’15 rate of 12.7% was 19% higher than the 10.7% rate Adobe recorded in Q2 ’14.
Categories: TV Everywhere
FreeWheel has released its Q2 '15 Video Monetization Report, finding once again that long-form and live viewing drove the biggest increases in video ad views. Live viewing increased 146% vs. Q2 ’14 with long-form up 26% vs. Q2 ’14. Short-form again lagged, up just 16% year-over-year. Overall, ad views increased by 32% and video views increased by 25%, both vs. Q2 ’14.
For broadcast and cable TV networks plus pay-TV operators (which FreeWheel calls “programmers”), 66% of their ad views in Q2 ’15 came from the combination of long-form (35%) and live (31%). As always, the biggest share of live viewing was sports at 78% (though that was down from 82% in Q1 ’15), distantly followed by news at 15%. For long-form, scripted drama had the highest share (42%), followed by reality (26%) and comedy (17%).
Vdopia’s “Chocolate” programmatic mobile video marketplace, which launched last October, has experienced a 172% increase in ad spend from Q1 ’15 to Q2 ’15. Vdopia said that Chocolate served 12 billion mobile video ad auctions per month in Q2, a 110% increase vs. Q1. Chocolate had a 97% increase from Q1 to Q2 in mobile web ad auctions and a 195% increase in mobile in-app ad auctions.
The range and quality of online original programs is unquestionably improving as investments by OTT services soar. What gets far less attention - but is equally important - is that the viewers’ actual experience watching these new programs must be high quality and free of buffering/other annoyances. The best content in the world will not make up for lousy delivery. Increasingly, a TV-quality level of experience is where viewers set their expectations.
Fortunately there was some good news this week on the quality of experience front, with Conviva reporting mid-year 2015 quality metrics gleaned from analyzing billions of video streams worldwide. Some of the key data points, according to Conviva’s mid-2015 Viewer Experience Report, were:
Watch an ad longer and all kinds of effectiveness measures should increase. That’s a pretty bankable assumption. But in a world where viewers are going to great lengths to avoid ads, just getting them seen and paid attention to have become huge challenges. For example, earlier this week a report from Adobe and PageFair estimated that publishers are now foregoing $22 billion per year due to increased use of ad blocking software.
All of this has triggered a range of new video ad approaches to deliver improved monetization. One of them is “outstream” video ads, where the video ad plays outside of the video stream, instead running in a text article, newsfeed or slideshow, as opposed to instream (i.e. pre-roll, mid-roll or post-roll). I’ve been a fan of outstream ads for a while as I think they unlock lots of new premium inventory for publishers while balancing the viewer experience.
Tremor Video released data gleaned from 40 billion ad calls in its premium video marketplace, finding, among other things, that 7 out of 10 advertisers are now buying multi-screen campaigns. That’s a bit higher than the 58% Videology reported for Q1 ’15 back in May based on its data.
Both data points illustrate how aggressively advertisers are embracing both online video and mobile video advertising. Mobile in particular now accounts for 50% or more views on many popular sites, including YouTube, making a mobile component mandatory.
Research released late last week by Parks Associates, which revealed high levels of churn for many smaller SVOD services, reinforced for me that many of these services are at risk of being seen as little more than transactional VOD opportunities by consumers. If this occurs it would have huge implications for both the SVOD services and larger ecosystem.
First, to review the research, Parks found that for SVOD services other than Netflix, Hulu and Amazon, the churn rate over the past 12 months was equal to 60% of those who subscribed to such services. For Hulu Plus, 7% of U.S. broadband subscribers cancelled their subscription in the past 12 months (equaling churn of half or more of Hulu Plus’s subscribers). Parks estimated Amazon’s churn at around 25% (though that’s clouded by value of the overall Prime service). Only Netflix fared well, with churn in the past 12 months running around 9% of its subscriber base. Note, none of these SVOD services publicly disclose their churn rates.
Revenue in the U.S. from premium OTT services could double or triple from $4 billion in 2014 to $8-12 billion in 2018, according to new research study from Ooyala and Vindicia, which was conducted by MTM.
The study, based on input from 45 content and service providers, forecasts that just a small number of OTT providers, mainly existing ones, will dominate. Netflix is seen as the biggest of the group, although its market share will decline from 85% currently to approximately 50% in 2018. However, respondents were optimistic about the opportunity for niche OTT providers such as sports, kids, specialized entertainment and personality-drive services where they foresee 15-20 providers each having over 100K subscribers.