Beachfront - leaderboard - 7-1-18

Analysis for 'The Diffusion Group'

  • Research: Exploring Skinny Bundles’ Momentum with TDG’s Michael Greeson

    Virtual Multichannel Video Programming Distributors (“vMVPDs”) or “skinny bundles” have become a very hot topic in the video industry. Offering fewer TV networks and at a lower monthly price they’re seen as a way of keeping cord-cutters in the ecosystem while attracting cord-nevers. To learn more about the dynamics of vMVPDs, industry research firm (and long-time VideoNuze partner) The Diffusion Group recently completed a comprehensive study of vMVPD subscribers. I interviewed Michael Greeson, TDG’s president and director of research, to learn more.

    VideoNuze: From a top-line perspective, what are the most important takeaways from your research?

    Michael Greeson: First and foremost, while these services are successfully connecting with cord-cutters, they are entirely missing out with cord-nevers. Cord-cutters account for 54% of total vMVPD subs. The consumers were largely driven from legacy services by high service costs and paying having to pay for channels they don’t watch, and vMVPD services appear to better address these needs.

    Cord-nevers, on the other hand, account for only 9% of vMVPD subs—clear evidence that these offerings are failing to resonate with younger buyers. And for good reason: cord-nevers are largely driven by a genuine lack of interest in multi-channel pay-TV services. They prefer a ‘build it yourself’ service that allows them to select and pay for only the channels they want, versus signing up for a bundle of channels.

    continue reading

     
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  • Research: 22% of U.S. Broadband Homes Don’t Have Pay-TV, Double Vs. 2011

    As of year-end 2016, 22% of the 100 million U.S. homes that subscribe to broadband did not also subscribe to a pay-TV service. That’s up from 9% of the 85 million U.S. homes that subscribed to broadband but did not also subscribe to a pay-TV service in 2011. Over the course of 2016 alone, the rate of broadband homes subscribing to pay-TV declined from 82% to 78%, resulting in 22 million broadband homes without pay-TV at the end of last year, compared with 8 million in 2011.

    The data comes from a new report from The Diffusion Group, “Life Without Legacy Pay-TV: A Profile of U.S. Cord Cutters and Cord Nevers” that has just been published.

    continue reading on VideoNuze iQ

     
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  • TDG: Facebook to Dominate Social TV

    Facebook is poised to dominate “social TV” according to a new report from The Diffusion Group, authored by veteran industry analyst Alan Wolk. Social TV is defined as using social media platforms to discuss, comment on, or enhance the television experience.

    While Facebook’s importance grows, TDG sees Twitter’s role in social TV declining, though it is still significant today. Two main forces are at work: (1) a continued decline in live viewing, thereby making real-time platforms like Twitter less relevant and (2) a shift from fan-driven social TV activity to paid promotional placements by TV networks.

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  • Last Call: Social Media and Second-Screen TV Webinar is Tomorrow

    This is last call to register for tomorrow's complimentary webinar, "Social Media and Second-Screen TV Experiences." The webinar will feature Michael Greeson, founder of The Diffusion Group, who will share social insights from his firm's recent survey of 1,000 broadband users/TV viewers. TDG will also provide registrants with a complimentary copy of its accompanying report, a $1,500 value. Then Kevin Wyatt, director of business development for Rovi, will explain how the company's entertainment-related social media can be incorporated into TV apps. There will be plenty of time for Q&A.

    Register now!

     
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  • Complimentary Webinar: Social Media and Second-Screen TV - June 19th

    Next Wednesday, June 19th, I'll be hosting a complimentary webinar focused on the impact of social media and second-screens on TV experiences. By now, anyone involved in the TV industry is well aware that the content itself is one part of the overall viewing experience;  for a growing group of viewers the social aspect that surrounds it has become equally important. Still, social is a relatively new phenomenon for TV and much is not yet understood.

    In this webinar, Michael Greeson, founder of The Diffusion Group, will share social insights from his firm's recent survey of 1,000 broadband users/TV viewers. TDG will also provide registrants with a complimentary copy of its accompanying report, a $1,500 value. Then, Kevin Wyatt, director of business development for Rovi, will explain how the company's entertainment-related social media can be incorporated into TV apps. There will be plenty of time for Q&A.

    Register now!

     
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  • Complimentary Webinar: Social Media and Second-Screen TV - June 19th

    Please join me for a complimentary webinar on the impact of social media and second-screens on TV experiences. In this webinar, which I'll moderate, Michael Greeson, founder of The Diffusion Group, will share detailed findings from his firm's recent survey of 1,000 broadband users/TV viewers. TDG will also provide registrants with a complimentary copy of the accompanying report, a $1,500 value.

    In addition, Kevin Wyatt, director of business development for Rovi, will explain how it enables entertainment-related social media to be seamlessly incorporated into apps, with supporting examples. There will be ample time for Q&A.

    Register now!

     
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  • Multiscreen Live Linear - Consumer Values and Perceptions

    Following is a contributed post by Mio Babic, who is the founder and CEO of iStreamPlanet, the leader in live linear streaming solutions including the soon to be released Aventus live video workflow solution.

    Multiscreen Live Linear - Consumer Values and Perceptions
    by Mio Babic

    Recently iStreamPlanet partnered with The Diffusion Group to better understand the opportunity in delivering a multiscreen live linear experience to multiple devices. As digital media innovators it’s easy for us to get excited about moving the technology forward, and while we see 24/7 live linear streaming as the next step in the OTT evolution, we wanted to verify that we are creating technology for an experience that consumers desire, and therefore profitable for our customers in the media industry.

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  • VideoNuze-TDG Podcast #157 - More Thoughts on Cord-Cutters and Cord-Nevers

    I'm pleased to present the 157th edition of the VideoNuze-TDG podcast with my weekly partner Colin Dixon, senior analyst at The Diffusion Group. This week we devote the full podcast to discussing TDG's new report, "Pay-TV Refugees - A Primary Research Profile of Cord-Cutters and Cord-Nevers."

    Colin notes that U.S. households with broadband service that don't subscribe to pay-TV have grown steadily in the last 3 years, and are forecast to continue doing so over the next 5 years. We dig into the main reasons behind this - affordability and relevance, particularly for younger consumers.

    As I wrote earlier this week, the fundamental question here is what broadband users - presented with a huge new diversity of online video choices, the rising cost of pay-TV and a proliferation of new viewing devices - will do? Admittedly it's still very early in the game and hard to predict what's ahead. But it does seem inevitable, given human behavior, that some percentage will peel off, either dropping pay-TV or not subscribing in the first place.

    All of this - and more - is on the table for discussion at next Wednesday morning's VideoSchmooze in NYC. More info here.

    Click here to listen to the podcast (19 minutes, 12 seconds)




    Click here for previous podcasts

    The VideoNuze-TDG podcast is available in iTunes...subscribe today!

     
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  • Study: Cord-Cutters and Cord-Nevers Will Soar to 17.2 Million U.S. Homes by 2017

    New research from The Diffusion Group forecasts that the number of "pay-TV refugees" - U.S. homes subscribing to broadband, but not to pay-TV services - will increase 58%, from 10.9 million in 2012 to 17.2 million in 2017. Pay-TV refugees consist of both "cord-cutters" (homes that once subscribed to pay-TV, but no longer do) and "cord-nevers" (homes that have never subscribed to pay-TV). The percentage of broadband subscribers who are pay-TV refugees will increase from 12.5% in 2012 to 17.2% in 2017.

    Although it forecasts the number of cord-cutters to increase over the next 5 years, TDG's founding partner and director of research Michael Greeson believes the pay-TV industry's main concern should be with cord-nevers which will more than double during that period. Of the 17.2 million pay-TV refugees in 2017, TDG forecasts 40% or 6.9 million of them to be cord-nevers, up from 29%, or 3.2 million, in 2012.

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  • Early Days, Big Potential for Advertising on Connected TVs [VIDEO]

    At the recent VideoNuze 2012 Online Video Advertising Summit, TDG senior analyst Colin Dixon sat down with Ed Haslam, SVP of Marketing at YuMe to discuss the market for video advertising on connected TVs (sometimes also called "Smart TVs"). Ed and Colin agreed that while there are already 20 million or more U.S. homes with these TVs, the ad opportunity is still relatively small, though it has enormous potential as these devices are adopted in hundreds of millions of homes globally over the next 5 years.

    Ed has a strong perspective on this space as YuMe has a deal with Samsung and with LG to power advertising on their connected TVs. In the session, Ed discussed the experiences of 2 early advertisers, Toyota and State Farm. He also explained exactly where video ads are inserted today, how these units differ from typical pre-roll units seen online, and how the market is broadening to also include in-app advertising. Ed also describes 2 key challenges for the connected TV advertising space; consumer fragmentation and gaining developers' attention.

    Watch the video

     
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  • Complimentary Webinar Today at 2pm ET: Next-Gen Video Discovery

    Please join me for a complimentary webinar today at 11am PT / 2pm ET "Next-Gen Video Discovery: Make the Guide Your Catalyst for Growth." Colin Dixon, senior partner at research firm The Diffusion Group, Yosi Glick, CEO/co-founder of taste engine Jinni and I will discuss how the proliferation of video choices and devices is creating huge challenges for viewers to find what they really want to watch - and what's being done to address this problem. If understanding how discovery will work in the online video era is important to you, then this webinar will be very worthwhile. There will be plenty of time for audience Q&A.

    Learn more and register now
     
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  • Complimentary Webinar, Thurs., Nov. 3rd: Next-Gen Video Discovery

    Please join me for a complimentary webinar on Thurs., Nov. 3rd at 11am PT / 2pm ET, as Colin Dixon, senior partner at research firm The Diffusion Group, Yosi Glick, CEO/co-founder of taste engine Jinni and I discuss how the proliferation of video choices and devices is creating real challenges for people to find what they really want to watch - and what's being done to address this problem. As one example, just yesterday Belgian IPTV provider Belgacom announced that Jinni would be integrated with its Movie Me VOD service rolling out on Samsung Smart TVs.

    As video continues to proliferate, there are numerous solutions to address the navigation challenge, each with its own pros and cons. Solving this problem will have huge benefits for viewers, and implications for content providers and device makers. In this timely webinar we'll explore key trends, different technology approaches being deployed and what the future holds. If understanding how discovery will work in the online video era is important to you, then this webinar will be very worthwhile.

    Learn more and register now
     
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  • Complimentary Webinar, Thurs., Nov. 3rd: Next-Gen Video Discovery

    Please join me for a complimentary webinar on Thurs., Nov. 3rd at 11am PT / 2pm ET, as Colin Dixon, senior partner at research firm The Diffusion Group, Yosi Glick, CEO/co-founder of recommendation engine Jinni and I discuss how the proliferation of video choices and devices has made it harder than ever for people to find what they really want to watch - and what's being done to address this problem.

    It wasn't that long ago that the on-screen electronic program guide provided by pay-TV operators served as the most convenient way to discover what was available on TV, which was of course the primary place to access video programming. Now, however, there's a whole separate universe of programming available outside the pay-TV operator's scope of services (e.g. Netflix, Hulu, YouTube, web-only series, branded entertainment, etc.). And there's a huge range of connected and mobile devices (e.g. iPad, Roku, gaming consoles, Android smartphones, etc.) being used to watch this programming.

    A range of different solutions has sprung up to address the navigation challenge, each with its own pros and cons. Solving this problem will have enormous benefits for viewers, and implications for content providers and device makers. In this timely webinar we'll explore key trends, different technology approaches being deployed and what the future holds. If it's important to you to understand how discovery will work in the online video era, then this webinar will be very worthwhile.

    Learn more and register now
     
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  • New Research Shows Netflix Is A Catalyst for Cord-Cutting and Cord-Shaving

    The Diffusion Group released interesting research yesterday which supports a view that I've had for a while: heavy Netflix streaming usage correlates with a propensity to cut back on pay-TV services. Although Netflix has strenuously tried to position itself as a low-priced compliment to pay-TV services, the reality is that for some pay-TV subscribers who have begun shifting their viewing hours to Netflix streaming, the two are more substitutes than compliments. As I've argued, these are primarily people who are entertainment-oriented, don't care about live sports, are comfortable with on-demand, not live-viewing, are budget-constrained, or some combination of all of these.

    The headline of the research is that the number of Netflix streamers considering downgrading their pay-TV service doubled year-over-year from 16% to 32%. But to me the key nugget is that among those who said they are likely to downgrade or eliminate their pay-TV service, 61% of moderate to heavy Netflix streamers cite online video usage as the top reason for doing so (with two-thirds of these citing Netflix specifically), while just 24% point to economic issues as their top reason. Conversely, for all Netflix streamers, almost half point to economic issues as their main reason (e.g. "cost of service" and "need to save money"), with just 34% pointing to online video usage as their top reason.

    continue reading

     
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  • Webinar with Colin Dixon Today on Net Neutrality

    Colin Dixon, senior partner at The Diffusion Group, and I will continue our complimentary webinar series, "The Terror of Technology II: Demystifying Broadband TV" today at 2pm ET/11am PT.

    In today's session, Colin and I will discuss net neutrality and how it impacts online video. We're coming at this quite differently, so the webinar promises a spirited exchange of ideas. There will be ample time for audience Q&A. Please join us!

    Click here to register

     
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  • 2 Complimentary Upcoming Webinars

    I'll be participating in 2 complimentary upcoming webinars that will be of interest to VideoNuze readers.

    First, this Thurs, Sept. 23rd, Colin Dixon, Senior Partner at The Diffusion Group and I will present "The Terror of Terminology: Demystifying Broadband TV." Colin is a savvy broadband analyst, with whom I often compare notes on the market. We've both been hearing similar types of questions in the market, so we've decided take on 5-6 items and address misunderstandings that linger.

    We'll discuss the difference between "broadband TV" and "Internet TV," whether online video ads can support long-form premium content, why so many cable programs are available online, but so few cable programs are, what's the difference between hybrid set-top boxes and Internet set-top boxes, and why TV Everywhere is so significant. Expect a fun and educational conversation, with plenty of time for audience Q&A. Learn more and register.

    Then on Wed, Sept. 30th I'll be participating in a Brightcove-sponsored webinar, "New Video Distribution Strategies - Taking Video Beyond the PC." Other speakers include Chris Little, Technology Director at Brightcove and Rich Ezekial, Director of Strategic Partnerships, Connected TV, Yahoo. Accessing online video on other devices like TVs and smartphones is one of the hottest areas of the broadband video landscape, and we'll be digging in to key trends, best practices and monetization opportunities. In particular, we'll hear specifics about Yahoo's Connected TV strategy. Learn more and register.

    I look forward to seeing you on one or both of these exciting webinars!

     
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  • New Research from TDG Sheds Light on Consumers' Three Screen Intentions

    This past Tuesday I highlighted some of Nielsen's recent data which showed, among other things, significant online and mobile video usage by younger age groups. In that post I noted that marketers need to pay close attention to these trends to ensure their products and services meet these users' needs and expectations.

    New research from The Diffusion Group (a long-time VideoNuze partner) provides a window into how users think about accessing video across multiple screens, and who the providers might be. TDG has recently completed a survey of 2,000 adults (18 or above) which tested interest in two-screen and three-screen services along with content and features. TDG has graciously provided a sample of the slides for complimentary download by VideoNuze. You can download the slides here.

    TDG defined a three-screen service as "a single video service which feeds all your household TVs, PCs and mobile devices, for a single monthly fee, from a single service provider, and with relatively equal content, variety and quality of service for all three devices."

    TDG found that almost 25% of those surveyed responded positively to such a package. Whereas video marketers would have traditionally considered heavy TV viewership (25 hours/week and above) to be the most important criterion for driving more video services adoption, these so-called "three-screen intenders" don't exhibit heavier TV viewership than non-intenders (though they're slightly higher in moderate viewership, 11-25 hours/week).

    Rather, the behavior that distinguishes three-screen intenders is how much online viewing they're doing. The intenders are far higher consumers of online video in general, and of online TV programs in particular. In other words, their behaviors are already self-selecting them as the targets for a three-screen service offering. That of course makes it much easier for marketers to find and target them.

    All of this certainly supports Comcast's and Time Warner Cable's recently revealed plans to offer their video subscribers online access to programs. Better news still for these companies is that TDG found that cable operators were the top choice by intenders as the preferred three-screen provider. Cable was chosen by 31.7% of intenders, almost double the amount that selected satellite operators. Translation: there is a sizable group of consumers interested in three-screen services and cable appears to be in the prime position to capitalize on this.

    Of course, the next question then is whether cable operators should charge for these services or imitate Netflix's example with Watch Instantly by including them as a value add to existing digital services. In my opinion, at least some of the online viewing capability should be included for no extra charge. That would go a long way toward establishing loyalty, and position cable for even greater competitive gains.

    Click here to download the complimentary slides.

    What do you think? Post a comment now.

     
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  • Media Buyer Interview Series Part 1: Ed Montes, EVP/Managing Director, Havas Digital US

    Not a day goes by where there isn't an article about the health of the broadband video industry - how viewer consumption is growing, how much ad revenue it's slated to generate (or not), and what content and infrastructure partnerships have been inked. With the lion's share of the industry ad supported, it's time to hear from the people who are in position to make or break projected revenue budgets: the media buyers.

    This interview is with Ed Montes, EVP/Managing Director of Havas Digital US; it is the first of a series of interviews that The Diffusion Group's senior analyst, Mugs Buckley, is conducting with advertising's key media buyers.

    WHAT TYPE OF ONLINE ADS DO YOU BUY?

    We buy pre-rolls, mid-rolls, in-line video ads. The only thing we have not bought much of are ads around user-generated content.

    WHO ARE SOME OF YOUR CLIENTS?

    Sears, K-Mart, Fidelity Investments, Amtrak, Tyson, Choice Hotels, Volvo, Air France, and Reckitt Benckiser, to name a few.

    ARE ALL OF YOUR CLIENTS BUYING VIDEO ADS?

    Many of our clients are placing ads in online video.

    IS IT A "MUST HAVE" ON THE MEDIA PLAN?

    We're definitely see it grow in importance and yes, it is a "must have" on some media plans. What I can say with more certainty is that online video advertising is becoming, and for some clients is, as important as display advertising. What remains a more consistent "must have" are search buys.

    WHAT ARE THE SIZES OF SOME OF YOUR BUYS? WHAT ARE THE CPM TRENDS?

    A buyer considers two things: scale (will it reach enough people) and the size/cost of a buy. It depends on the overall size of the campaign. For instance, in a large campaign a buy is south of $50K, may not make the plan, unless we're going to do it for the intelligence of the buy or because the CPM is very discounted. On a smaller campaign $50K might be the entire campaign so you will see much smaller video purchases. There is a huge swing for CPM range depending on the content. Everything hinges on the content. We see CPMs ranging from $15-$40 for non-UGV content in-stream units. UGV, the lower-end quality content CPMs tend to be in the single digits. In-banner video is generally on the lower end of the single digit range.

    HOW LABOR INTENSIVE IS AN ONLINE VIDEO AD BUY?

    Relatively speaking, it is a lot more labor intensive than a broadcast buy. In the online world, there are a lot of steps in the process to create, buy, optimize, build and analyze a video ad campaign.

    WHAT DO YOU WANT YOUR SELLERS TO KNOW BEFORE THEY COME AND PITCH YOU?

    I'd like sellers to be informed about our clients, their campaigns, and goals so we can build the best possible idea. I want someone to bring me a solution, not just sell me their unsold inventory.

    IS THE "BUY" ALL ABOUT SCALE?

    I think it's about audience fragmentation, the inverse of scale. People buy TV because they can aggregate a large audience; it is the best mass media vehicle. As TV ratings decline, a buyer has to buy an increased mix of television to achieve the same scale they did previously. Now the consideration shouldn't just be TV, it should be all video.

    WHO DOES THE BUYING? BROADCAST BUYER? ONLINE BUYER?

    Both online buyers and broadcast buyers do the buying but like anything, it depends on the buy. Pure online purchases (like Hulu, Veoh, YouTube), the online buyers are in the lead. On the network side (such as buying from ABC), it's a little bit different because there are instances where media is bought by network buyers with the assistance of online buyers.

    WOULD YOU BUY FROM AN INDEPENDENT WEB STUDIO OR THEIR CONTENT?

    I would consider such a buy but it goes back to the issue of scale. Would we buy directly from the programmer or buy from a network? In a world where I'm trying to aggregate reach, they may fall out of the category due to their limited audience size.

    QUOTE

    "We're bullish on online video, the performance we've seen from it is highly encouraging."

     
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  • New TDG Research Provides Details of Broadband Video Advertising's Growth

    The Diffusion Group, a leading analytics and advisory firm specializing in broadband media and the digital home, is releasing a new report tomorrow entitled, "Online TV and the Future of Digital Video Advertising." VideoNuze is offering half a dozen slides as a complimentary download (note, VideoNuze has no financial interest in this report).

    Click here to download slides

    Though I haven't seen the full report, in a conversation with Mugs Buckley, the report's author (and also periodic VideoNuze contributor), I got a sneak peek at some of its key conclusions. The report is based on TDG's proprietary consumer research and modeling, interviews with industry executives, data from other firms and other secondary research. In sum, the report pegs '08 video ad revenue at $590 million, growing to $9.98 billion in 2013.

    To establish some order, Mugs first identifies four types of video, estimating each one's current market share in terms of stream count and ad revenue and then forecasting them through 2013. The four types are "user generated video," "long-form," "short clips" and "other" (which includes all paid models, adult content, corporate and educational videos, etc.).

    No surprise, UGV currently accounts for 42.4% of streams, but only 3.7% of ad revenues. Conversely, long-form accounts for only 2.2% of streams but 41.6% of ad revenues. Note the disparity would be lower if, instead of using streams (where one 40 minute TV show stream is equivalent to one 10 second clip stream on YouTube), the report used "minutes viewed" or another consumption-centric metric. I agree with Mugs though - in either case, the underlying point would still be true - long-form, higher-quality video is going to be where ad dollars are and will be concentrated.

    The report's forecast reinforces the point: by 2013, long-form's stream share will roughly double to 4.1%, with its share of ad revenue growing to 69.4%. Conversely UGV's stream share grows a little bit, but its ad share shrinks to 1.8% . A wildcard in this mix is the role of short-clips, defined as 2-5 minute videos including everything from news/entertainment/sports videos to webisodes. Mugs is bullish on this segment, with its lower costs to produce and ability for users to watch spontaneously. This is where a lot of market activity and original programming is happening and it's still early to gauge its acceptance by users and advertisers.

    A key input to the revenue forecast is the underlying CPM forecast. Mugs said her approach was to be relatively conservative with CPM's predicting little more than inflation-adjusted growth. For long-form that means CPMs growing from $40 today to $46 in 2013, which feels pretty modest, especially if targeting and engagement tactics pay off (see more on Disney's efforts in this post). On the UGV CPM forecast, it's important to note the $15 CPM refers to YouTube's announced CPM target for partners' video, NOT pure UGV.

    There's lots more info in the slides, and if you're interested in the whole report, it's best to contact sales@thediffusiongroup.com or 469-287-8050.

    Click here to download slides

     
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  • The Reality of Web Video Advertising Just Doesn't Seem to Add Up

    Today's post is from TDG's Mugs Buckley, who discusses the confusing state of video advertising projections.

    The Reality of Web Video Advertising Just Doesn't Seem to Add Up

    by: Mugs Buckley, Contributing Analyst, The Diffusion Group

    I used to think I was pretty good at math, but after trying to make sense of recent forecasts regarding web video advertising, I'm beginning to doubt my skills. Let it be known that I'm a big believer in the growth potential of the Internet video ad business; I'm simply struggling to follow the numbers that have been reported. Since no single analysis offers an "apples-to-apples" industry comparison, I thought I'd offer up some of the available forecasts and offer a few thoughts.

    So here's where I'm stuck.

    The estimates and forecasts for only video ads are all over the place. For example:

    • eMarketer estimates that US marketers spent $775M in 2007 and will spend $1.3B in 2008 for online video streaming and in-page ads.
    • Jupiter Research predicts that 2008 online video ads in the US will yield $768M.
    • comScore reported that online viewers consumed 9.8B videos in January 2008 (down from December 2007's 10.1B) of which 3.4B were Google/YouTube videos.
    • In a November 2007 Financial Times article, a leading media buyer for Starcom Media Group (who is well aware of her buys and rates) predicted that the 2007 market for "The Big Four" broadcast networks was likely to generate around $120M.

    So here's where it gets a bit confusing.

    • If we use the 3.4B monthly view Google/YouTube view estimate for January and run that out for a 12-month period, add some growth for fun, we come up with about 45B views for all of 2008.
    • YouTube charges $15 CPMs for their in-video overlay ads (down from the initial $20 CPMs used during beta testing).
    • If 100% of the 45B Google/YouTube videos were sold at $15 CPMs, that would yield revenue of $675M. But that assumes 100% inventory sold, which won't happen for a variety for reasons (in particular because YouTube only sells overly ads on their contracted partner deals, not user-generated content).
    • According to Bear Stearns, YouTube is set to generate $22.6M in revenue for video ads, about 3.3% of the possible $675M at 100% inventory sold.

    Hmmm. So if YouTube (at 34% of all web video consumed) could generate $22.6M in revenue in 2008, and the Big Four were running about $120M in 2007, how does one arrive at these impressive near-billion dollar predictions? Where else is this revenue coming from?

    Let's not rule out operator error - I'll quickly admit that I may have misinterpreted how these numbers were derived and what they represent. That being said, however, there doesn't seem to be a rational way to reconcile these disparate estimates. Can anyone out there help to square these numbers? Is it simply a matter of under- or over-reporting? Are the measurement systems currently in place so poor and mutually exclusive in methodology that they necessarily offer conflicting estimates?

    Something just isn't adding up. Yes, this may seem to be a bit nit-picky on my part; the rambling of an analyst with too much time on her hands. Then again, without accurate revenue and usage estimates, it is impossible to know the real value of any form of advertising, much less an emerging model such as web-based video advertising.

    Please let us know what you think!

     
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