The Future of Online Video Looks Bright
Smaller screens, bigger opportunities
To appreciate how far online video has come, consider a few contrasts between the 2008 and 2004 elections.
In the 2008 campaign season, primary debates were co-sponsored by YouTube, and questions from the public were submitted through the pioneering video-sharing site.
In 2004, YouTube did not exist.
According to Visible Measures, in 2008, footage of Sen. Obama’s election night victory speech received 500 unique online placements within 36 hours. That encompassed unique video clips, as opposed to multiple embeds of the same clip. Further, videos of the speech were viewed more than 6.8 million times in the first 36 hours (not including live streams or feeds from broadcast sites other than NBC.com).
In 2004, the online video infrastructure could not have supported anywhere near that level of viral syndication.
A huge video market is developing online.
eMarketer projects that the US online video audience will grow to 190 million people by 2012—that will be 88% of the Internet user population.
“After some false starts with ill-fated transactional experiments, online video content owners and distributors are pursuing a strategy that closely follows the standard TV business model,” says Paul Verna, eMarketer senior analyst and author of the new report, Video Content: Harnessing a Mass Audience. “The bulk of online video programming is now supported by advertising, with ad formats ranging from in-stream ads—prerolls, midrolls and postrolls—to in-text and in-banner ads.”
Although many consumers are loath to sit through ads when watching online video, they seem even less willing to pay directly for content.
According to a study by The Diffusion Group (TDG), as ad-supported video grows the balance of the inventory will tilt toward longer-form content.
TDG analysts projected that in 2013, long-form video will represent 69.4% of ad revenues, up from 41.6% in 2008. Alternately, in the same timeframe, the share of short-form video will decline from 54.8% to 28.7%.
Of course, viewing online content on a television is still unwieldy, costly or both.
“Cable and satellite providers, ISPs, TV manufacturers and developers of set-top hardware have yet to come up with compelling solutions,” says Mr. Verna. “However, once this domino falls—and it is almost inevitable that it will—online video will take a major leap into an interconnected future.” [eMarketer]
TV and Online Video: Friends or Foes?
A new blow to the myth of cannibalization
NBC released data last week about both its online and TV Olympics viewership. Based on the numbers, online video increased the network's TV ratings and vice versa.
One-half of NBC Olympics online viewers said they used the Web to catch up with sports they had missed. Another 40% wanted to watch something again they had first seen on TV. Just 0.2% used only the Internet to follow the Olympics.
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"The Internet hardly cannibalizes; it actually fuels interest," said Alan Wurtzel, NBC's president of research, in a conference call with reporters.
eMarketer predicts online video ad spending in the US will reach $505 million this year and keep climbing through at least 2013. Over 50 million additional consumers will start viewing online video ads within the next five years.
Despite healthy online viewership, NBC focused almost exclusively on TV ad sales for this Olympics. The company said it took in $1.025 billion in advertising sales, with nearly all coming from traditional network TV ads. eMarketer estimates that NBC collected $5.75 million from online ads on the NBCOlympics.com site, making NBC's Internet efforts around 0.5% of its total advertising revenue take. [eMarketer]
Are Short Videos Best for the Web?
Online viewers want longer content
Good news for video publishers: Online video viewers are, for the most part, still watching as much TV and seeing as many movies on DVD and in theaters as ever.
Only 11% of online video viewers ages 12 to 64 surveyed in March and April by Frank N. Magid Associates said they had cut back on their TV time as a result of their Internet watching. One in 10 respondents said they went to movie theaters less as a result of online video, and only 7% said their DVD viewing had declined.
That may have something to do with the availability of full-length TV programs and movies online.
"The bulk of video consumed online today is typically short-form entertainment, rather than full TV episodes or full-length movies," said David Hallerman, senior analyst at eMarketer.
Last year, about one-half or more of US online video viewers surveyed regularly watched short news pieces, humor clips, movie trailers and music videos. Only about one in four viewers watched full-length TV shows, and only 14% viewed full-length movies.
But full-length TV shows were ranked as the most highly desired type of TV content by US and Western European adult Internet users surveyed in Q1 2008 by Opinion Research Corporation for Accenture.
Read more - eMarketer
Emerging Media Forecast: Mobile, Social Media, and Online Video Will Lead The Way
A recent media forecast by Magna Global - one of the world’s leading media service firms - predicts that mobile media, social media, and online video will be the fastest growing of the emerging media channels. Download the full study.
This is a very interesting forecast/presentation about the US market that not only looks at the future growth of emerging media, but also puts them in perspective with existing advertising. The point is that traditional media has never died, but large advertisers drive TV, and smaller advertisers drive emerging media.
“Models that were well designed for an era of homogeneous media platform access may not work may not be as well-suited for a world of Web 2.0% which will reach some audiences and miss others.”
Some interesting conclusions emerge:
- Social Media will grow by 37% to over over $1.4 billion, and will be helped by improved monetization possibilities.
- Online video will grow by 45%, being the fastest growing of all the emerging media. It will benefit from similarities to traditional TV.
- Mobile will grow by 42% to around $300 million. Key drivers for mobile are the growing mobile ad ecosystem and new opportunies in CRM and m-commerce on the plus side. On the negative side are the diversity of consumer interfaces and the lack of existing creative assets. [MobiAdNews]
Online Video Won't Replace TV
The Internet represents a valuable complementary distribution platform for television broadcasters and cable networks, but it is not a viable replacement, according to Convergence Consulting Group.
Convergence estimates that in 2007, US online TV advertising revenues accounted for 2% of total US broadcast and cable network TV advertising revenues, or $1.4 billion. By 2011, that figure will rise to $6.4 billion and represent 8% of TV advertising revenues.
In 2007, 9% of TV viewers also watched full-length TV episodes online. By 2010, Convergence estimates 23% percent of viewers will do so.
During that time period, DVR ownership is also expected to rise dramatically, from 25% of TV viewers in 2007 to 48% in 2010, thus limiting the potential viewership of online TV episodes.
Given the option of watching programs on TV and skipping ads or watching online with ads, Convergence predicts the majority of consumers will choose the former. [eMarketer]
Online Video Viewing Still Rising
But how much?
Internet users in the US watched 11.5 billion online videos in March 2008, up 13% over February 2008 and 64% over March 2007, according to comScore Video Metrix. That is an average of 83 videos watched per viewer during March.
Online video viewing is a mainstream activity for Internet users in the US. Nearly three-quarters of the online population watched an online video in March.
Nearly 85 million viewers watched 4.3 billion videos on YouTube (50.4 videos per viewer), while over 47 million viewers watched 400 million videos on MySpace (8.4 videos per viewer). Including YouTube, Google sites served an average of 50.9 videos per viewer.
comScore said the average online video viewed was 2.8 minutes long. The average online video viewer watched 235 minutes of video.
Nielsen Online also measured online video viewing in March 2008, with different results. Nielsen reported an average of 137.3 minutes of online video viewed for the month—nearly 100 minutes less than the comScore study. Nielsen told eMarketer that they excluded advertising, which comScore included.
Read more - eMarketer
Sports to Drive Online Video Growth
Screen Digest anticipates that sports content will be the single biggest driver of online video consumption in the US and UK, much in the same way that it was a driver of pay-TV adoption.
The number of online sports videos watched will more than double in both the US and UK over the next five years. By 2012, 10.8 billion sports videos will be served online in the US and 1.2 billion in the UK.
In 2007, online sports video accounted for 35% of all online TV watched in the US and 46% in the UK.
Revenues associated with sports content in the US will increase from $762 million in 2007 to $2.3 billion in 2012. In the UK, online sports video revenues will jump from £23.5 million ($43.2 million) in 2007 to £82.9 million ($153 million) in 2012.
Most of these revenues will be derived from advertising, rather than subscription fees. By 2012, advertising is expected to account for 49% of revenues in the US and 61% in the UK. [eMarketer]
Metacafe Inks Mobile Video Deals
Video entertainment provider Metacafe announced agreements with mobile multimedia service providers Buongiorno, Dyuna and Mobile Streams to deliver short-form video content to handsets.Its VideoRank technology spotlights recommended clips, while its Producer Rewards program relies on viewer response to reward creators for popular efforts. "The short videos featured on Metacafe are well-suited to mobile distribution--perfect for enjoying a quick entertainment break, regardless of time or place," said Metacafe CEO Erick Hachenburg in a prepared statement.
"Our sophisticated approach to programming, which automatically showcases the videos our large and global audience finds most entertaining, ensures a good user experience in the mobile environment, where searching for a video is not practical," he added.
Buongiorno is a trendsetting, independent mobile media and technology company driving the burgeoning cellphone entertainment and personalization industry. With the recent acquisition of iTouch, it becomes No.1 player in the mobile entertainment market worldwide.
It partners with over 100 leading cellular carriers, as well as with media and Internet companies in over 53 countries on 5 continents to distribute, package and create music, games, videos, wallpaper, ringtones, chat, user-generated services, TV voting, quizzes, and to sell advertising.
Buongiorno helps companies market through proprietary labels, and sells directly through its popular Blinko brand. It distributes across the U.S., Europe, Russia, India, the Far East, South America and Mexico, the Middle East, Africa and China. Its reach is already exceeding 840 million customers. [FierceMobileContent/FierceWireless]
Online Video Revenue To Approach $4B
The research company said that although the United States had the most developed online video market so far, online video revenue for the country would only reach $280 million in 2007, accounting for 1% of the total home video market.
"By 2011 online video in the US will represent 8% of total home entertainment revenues, with Western Europe close behind at 7%," said Mai Hoang, analyst at Understanding & Solutions.
"What's more, multiple formats will coexist in the future, and no one format will control the home entertainment landscape, quite unlike the domination of DVD since the demise of VHS," Ms. Hoang said.
"The new generation of high definition video formats will also help to shore up packaged media's presence within home entertainment revenue streams," she said. [eMarketer]
YouTube Shares More Wealth, Expands Partner Program
YouTube is now expanding the amount of money it shares with amateur video uploaders. The company first dabbled in the concept in May, following the example of rival upstarts like Revver.
Now, the YouTube Partner Program is widening its number of partners, subject to various qualifications. "Even in this limited release, the program has been an amazing success – already, millions of video views each week are earning revenue for our partners," the company explained.
According to YouTube, chosen videos must comply with a number of specific terms. Although anyone within the United States and Canada can apply at youtube.com/partners, the company noted that it will only accept submissions from users that are already "viewed by thousands of YouTube users," among other qualifications. All content must also be copyright controlled (no exceptions), and suitable for online streaming.
In May, YouTube said it had revenue-sharing deals with more than 1,000 partners, including media companies CBS, the BBC, Sundance Channel, the NBA and Sony BMG, as well as independent content creators like lonelygirl15.
Newer partners will join a class that includes Universal Music Group, PerezHilton, and the NBA, as well as smaller creators like artist Tay Zonday.
First round of several hundred users had been selected by the company for building a sizable audience on YouTube and complying with the site's terms of use. YouTube said it hopes the program will encourage users to "create compelling, engaging and viral content" for the site. It also hopes the expansion of the number of vids will encourage more marketers to consider buying ad time on YouTube. [DigitalMusicNews]
Majority of Web Users Watching Video
Nearly three-quarters of US Internet users watched an online video in September 2007, according to comScore Video Metrix.
comScore said the average viewer watched three hours of online video during the month. US Internet users viewed more than nine billion online videos in September.
Google sites (including YouTube) had the largest online video audience with 71.6 million unique viewers. Fox Interactive Media (MySpace) had 41.2 million and Yahoo! sites had 39.6 million unique viewers.
Nearly 70 million people viewed more than 2.5 billion videos on YouTube.com. More than 38 million people viewed approximately 360 million videos on MySpace.com. The average online video duration was 2.7 minutes. The average online video viewer consumed 68 videos, or more than two per day. [eMarketer]
Watching TV, But Not on TV
Would you pay to watch YouTube clips on your TV?
Over a quarter of males ages 13 to 34 watch video on devices other than TVs, according to E-Poll's "Multi-Platform Viewing of Video Content" report. The study of viewing habits in 2007 found three-quarters of consumers ages 13 and older viewed video content on PCs.
Over half of those who watched video content online said they were interested in transferring it to their television sets. Only 13% of television viewers said they had already made such a transfer. Half didn't know it was possible.
The idea lost its charm when prices were mentioned. About half of TV viewers said they would like to be able to transfer online video to their TVs, but only 17% would pay $100 or more for a device.
On the other hand, nearly a third said they would still be interested, even if it required a complicated installation. One reason more people are moving their TV viewing to other devices is availability. More people have video-capable devices, making it convenient to watch video even if the viewer is not at home.
Young teens are especially gadget-rich. Over half of boys and girls ages 12 to 14 owned and used a computer, TV, VCR, DVD player and mobile phone on a regular basis, according to a Los Angeles Times and Bloomberg survey conducted in June-July 2006.
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How Women Look at Video Online... Is Different
Online video is a business that has been years in the making. Thanks to the proliferation of broadband and the popularity of the YouTubes of the world, it is now what analysts at Piper Jaffray call "the new killer app of the Web."
But the app is not as killer for females as it is for males.
This year there will be an estimated 97 million females online in the US, compared with 91 million males. A clear majority. When it comes to viewing video online, however, their positions are reversed.
"While 78% of males watch video online, only 66% of females do," says Debra Aho Williamson, eMarketer senior analyst and the author of the new Women Online: Taking a New Look report. "They are less likely than males to visit most video destination sites — even the biggie, YouTube."
The disproportion is all the more surprising because females watch more TV than males. So what do females watch online?
A study conducted by InsightExpress for Advertising.com indicated that news clips are the most popular type of online video for all US adult viewers.
Read more
Premium Video to Reach $277 Billion in 2010
Revenues from pay TV, mobile video, DVD, broadband video and theater/box office receipts will reach $277 billion by 2010, up from less than $200 billion in 2006, according to iSuppli Corporation.
If advertising revenues are added to premium video sales, the total market amounted to approximately $370 billion in 2006.
Pay-TV services, especially from Internet protocol television (IPTV), will drive much of the growth. IPTV is the fastest-expanding segment of the pay-TV market, with revenues expected to increase to $23.5 billion in 2010, rising at a compound annual growth rate (CAGR) of 103% from $681 million in 2005.
DVD sales are actually expected to decline by as much as 20% during the next four years. Hollywood studios are running out of new content to sell, even as half of their revenues now come from DVDs. Consumers are also becoming price-sensitive, and are increasingly reluctant to spend $20 to buy DVDs outright when renting is an option. [eMarketer]
TV Viewing Solid Despite Online Video Growth
TV and online video are getting cozier all the time.
Episodes of 24 are viewable on MySpace a day after airing on broadcast TV. SlingBox jockeys use their laptops to watch what's on at home, unbound by geography and often untethered by wires. MediaPCs and AppleTV throw hard drive content into the living room, in files and streams. Amazon Unbox, CinemaNow and Netflix Instant Viewing do the same thing for PCs, letting movie fans get their fix when they can't get to a theater.
At least 14% of US adults watched online video once a week as of December 2006, according to Leichtman Research Group (LRG).
The buzz might make you think that online video viewing is coming at the expense of TV, but it isn't happening yet.
Although total online video usage has increased in the past year, the percentage of adults watching online video remains relatively unchanged. A previous LRG survey conducted nine months earlier found that 4% of adults viewed online video at least daily and an additional 11% at least weekly.
eMarketer is optimistic about online video viewer growth, and estimates that 157 million people in the US will be watching online video at least once a month by 2010.
TV still dominates viewing habits: 93% of adults spend at least one hour a day, on average, watching it.
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YouTube Increases Its Online Video Lead
YouTube added 3.8 million US users in January 2007, according to new data from Nielsen//NetRatings.
Visitors stayed over 41 minutes on average, up from less than 39 minutes in December 2006.
There were nearly twice as many YouTube viewers as Google Video viewers. Three times as many people watched YouTube than watched video on MySpace.
MSN Video gained 100,000 visitors, for a total of 12.2 million, while Yahoo! Video lost 300,000 visitors, for a total of 5.8 million.
YouTube alternatives are still mostly bit players. Break.com, for instance, attracted 3.3 million visitors in January, and Metacafe had 2.9 million visitors. [eMarketer]
Only 1 in 20 Internet Video Users Has Purchased a Movie Online
A new ABI Research survey of Internet users in North America found that only 5% of those who watch video on the Internet have rented or purchased a digital movie download, a lower overall number than indicate they have downloaded a movie free from a peer to peer sharing site. Movie downloads, both legal and illegal, remain the least watched genre of online video on the Internet, where short-form content such as sports and news clips is watched by nearly 7 in 10 of those that watch Internet video.
"The vast majority of those watching content online are watching short-form content such as news and sports clips," said research director Michael Wolf. "Older users in particular watch primarily news and sports, while younger users are watching more entertainment content, including viral media provided by sites such as YouTube.
"When ABI Research asked consumers why they chose not to watch movies downloaded or streamed from the Internet, the biggest reason was satisfaction with existing cable and satellite services as well as DVDs. Nearly half - 48% - indicated they would never purchase a movie online for download because they were satisfied with their current providers and the rental market.
"Despite the growing interest in the pay market for Internet-delivered video, perhaps the biggest remaining hurdle to widespread adoption is that the status quo usually gives consumers a vastly superior, and often less expensive experience than Internet-delivered content," said Wolf. "The industry needs to develop reasons and business models that increase overall consumer interest in Internet delivered video, including allowing for easy transfer and better viewing on the large screen."
Source: ABI Reasearch
Seniors show little interest in mobile downloads
According to a new report issued by ICM Research and commissioned by the British Internet Broadcasting Company, only 16 percent of respondents ages 55 to 64 are interested in downloading music to a mobile device, in contrast with 54 percent of subscribers between the ages of 18 and 24. Moreover, not a single senior respondent surveyed by ICM expressed interest in downloading movies or other video content to their wireless handsets.
"It is time for everyone to join the download revolution, and there is no need for downloading to be a preserve of the youth," said Paul Hague, managing director of BiBC, in a prepared statement. "There is so much downloadable content and archived material that is ready-made for old people with niche interests."
Source: FierceMobileContent, more information read this Computing article
Verizon Wireless makes deal with YouTube
YouTube and Verizon Wireless officially announced a deal that gives Verizon Wireless a new content experience with user-submitted video and YouTube a wider audience. Beginning next month, V Cast will include some of the popular website's videos. YouTube and Verizon didn't disclose any financial details, and Verizon has a short-term exclusivity on the deal, the length of which is also unknown. It could be a major coup for Verizon given the fact that visitors to YouTube, which is being acquired by Google for $1.65 billion, watch more than 100 million videos daily. But only pre-selected high-quality videos will be available for viewing on Verizon's YouTube channel. Given the fact that most of the videos on YouTube are of the homemade quality, you have to wonder how much pre-selection will dilute the value proposition.
TV Downloads on the Rise
And a new TV revenue stream emerges.
By Ben Macklin - Senior Analyst
During Disney's third-quarter conference call, CEO Bob Iger revealed some interesting statistics about the delivery of some of the media company's TV content online. For example, during the fall, users have requested more than 19 million episodes of the six series being shown on ABC.com 24 hours after airing on the network. About 12 million ABC shows have been sold on iTunes since the launch in October 2005, or an average of roughly one million a month. In addition, nearly 500,000 Disney movies have been sold on iTunes since its inception, and since June 2006, 53 million episodes and shorts have been played at DisneyChannel.com. Commenting on the statistics, Mr. Iger said that "TV viewing and Web use can reinforce rather than cannibalize each other when you have a terrific product."
All the alarmist claims that digital video recorders (DVRs), video-on-demand (VOD) and emerging online platforms will cause the death of TV and result in the loss of billions of dollars worth of advertising dollars are just plain wrong. TV distribution and access are changing, to be sure; audiences are becoming increasingly fragmented, that is true; primetime is not what it used to be, admittedly, but with every challenge comes an opportunity. More people will watch more TV and video content in the future, not less. They will just be doing it in different ways — via the TV, the Internet, the PC and their portable devices.
eMarketer estimates that by 2010 there will be 157 million online video users in the US, up from approximately 108 million in 2006.
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