VideoNuze Posts

Adap.tv and Digiday have released their Q4 2013 state of the video industry survey results, which found strong interest in online and mobile video advertising. In particular, 86% of brands anticipate increasing their online video ad spending in 2014, by an average of 65% vs. what they spent in 2012. In addition, 91% of agencies see an increase averaging 28% vs. 2012 spending.

However, there's disagreement on how these online video ad spending increases will be funded. 42% of  agency and brand executives believe that budgets currently used for out-of-home advertising will be tapped, followed by Search (26%) and broadcast TV (21%). But when brands alone are broken out, 33% said "no other category" (implication is video spending is incremental), with broadcast TV in second (cited by 31%), display (30%) and print (19%). In a sign that plans to poach broadcast TV dollars may be over-estimated, 42% of buyers said there hasn't been any change in their spending on that media.

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Netflix now has over 40 million global subscribers, including over 31 million is the U.S. alone, after reporting strong Q3 2013 results. Domestically, Netflix now has more subscribers than the biggest pay-TV operator (Comcast) and the biggest premium cable network (HBO).

Every research report I've seen continues to verify that to date Netflix is NOT driving cord-cutting (which is relatively small anyway). Still I can't help but ask the question in light of the company's renewed momentum: though it's fully justifiable to consider Netflix as an augment to pay-TV service today, is it fair to continue thinking of it that way forever? In other words, could a very different Netflix - as it might look, say, 3 years from now - become more of a substitute for pay-TV service for certain people?

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New research released today by Veveo reveals that nearly 2/3 of pay-TV viewers know what they want to watch "almost always" or "most of the time." In addition, almost 75% of them said they'd like better search capabilities from their pay-TV operator, a preference that dwarfed recommendations as an option, which was cited by less than 5% of respondents. Heavier TV viewers' preference for search was even stronger.

According to Sam Vasisht, Veveo's CMO, whom I spoke to last week, the findings underscore the extent to which search has become an integral part of everyday life for many consumers. The fact that search has become a positive online experience for many means that sub-optimal search tools provided by pay-TV operators becomes more glaringly obvious, leading to viewer frustration and lost revenue opportunities.

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In another sign of how TV and online video are continuing to converge, LiveRail is announcing this morning support for TV-style advertising pods in online video streams, using real-time bidding. The new feature means that content providers can programmatically sell and insert multiple ads in a given ad break, increasing monetization opportunities for long-form content absent additional users or viewership.

While preserving a positive user experience is critical, the reality is that as content providers have continued to push long-form programs online, the hunt for additional revenues has only intensified. According to recent research from FreeWheel, long-form ad loads were up 12% in Q2 '13 year-over-year to nearly 12 ads per 20-minute or longer stream. However, the increase doesn't appear to be affecting the viewer experience yet, as completion rates for mid-roll ads (the most likely place to insert ad pods with multiple ads) stood at 97% for 15-second ads and 91% for 30-second ads.

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Market researcher IHS has released its first study of TV Everywhere deployments in the U.S., finding that 73 different cable networks are now allowing authenticated online/mobile access for on-demand viewing. Per the chart below, NBCU leads among the ad-supported segment, with 15 of its 18 networks offering some TVE VOD option, followed by Time Warner (Turner) with 9 networks and News Corp. and Viacom each with 6. Discovery is the only major cable network group not yet offering TVE, but IHS expect that to change soon.

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I'm pleased to present the 200th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia. This week we debate whether U.S. cable operators should partner with Netflix, a prospect that was reported this past Monday by the WSJ.

Colin and I have very different opinions on the topic - I believe that on balance it would be disadvantageous for operators to partner and integrate Netflix into their experiences while Colin thinks it would be beneficial for them. As I wrote earlier this week, I think that operators helping Netflix get bigger and stronger ultimately means it becomes a stronger competitor and therefore a more potent cord-cutting and shaving threat.

Conversely, Colin believes integrating Netflix (as a couple of European operators are doing) would help their subscribers' user experience, which should be their overriding goal. Colin doesn't see Netflix as a threat, even as it looks more and more like HBO over time. I think that's underestimating Netflix's competitive potential. Rather than partnering with Netflix, operators should be doing everything possible to enhance their TV Everywhere and VOD initiatives.

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YouTube is now getting nearly 40% of its views from mobile devices, up from 6% in 2011. That nugget was shared by Google's CEO Larry Page in its Q3 2013 earnings call yesterday. YouTube is the latest content provider to share strong mobile viewership data; in the past several weeks BBC said its iPlayer mobile views are now up to 32% of total, VEVO said 50% of its views are mobile and PBS Kids said 75% of its are mobile.

These are clearly leaders in mobile and their viewership shows mobile's potential. More often these days, I'm hearing content providers say 20-30% is the range for their mobile views. Note, if you want to learn more about mobile video, both VEVO and PBS Kids (along with ESPN and Beachfront Media) will have executives speaking on the mobile video session at VideoSchmooze on Dec. 3rd (early bird discounted registration is now available).

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With 3.7 billion video ads served, the combined AOL-Adap.tv has landed atop comScore's September 2013 U.S. Online Video Rankings. (see chart below) It's the first time that AOL has outranked Google (primarily YouTube), which dropped to second with 3.2 billion video ads served. On its own in August, Adap.tv served over 2.5 billion video ads. AOL-Adap.tv was also tops in total ad minutes in September with over 1.6 billion, followed by BrightRoll with nearly 1.3 billion.

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