Mark Cuban, entrepreneur, billionaire, Dallas Mavericks’ owner, and owner of HDNet, recently said that the progress of online video is ‘disappointing.’ And by recently, I meannow. I know this, because I had already been writing here for a year and that first sentence comes from an article I wrote here. Since then, computer-based video consumption has grown, on average, 31.4% yearly. I wonder what Mark Cuban has to say today about the state of online video.
Nielsen recently dropped their The Digital Consumer Report – Feb 2014, which is where the 157% growth number comes from. The sourcing of the report comes from several other Nielsen sources including the television panels, Nielsen Netview, Videocensus, Mobile Netview, Cross Platform Report, U.S. Social Media Survey, National People Meter Panel, OTT Video Analysis, Connected Devices Report, Socialguide, Mobile Shopping Report and Customer Value Metrix. All but the last were from late 2013, the CVM was from Q2.
That’s a lot of data to compile and a lot of sources to collect. I can’t even begin to ponder the margin of error potential, so I won’t.
According to the report, smartphone ownership rocketed from 19% in 2009 to 65% in 2013. Smart TV ownership was at 16% in 2013 and digital cable was up 10% over the three years to 54%. HDTV doubled its market share from 41% to 83% and DVD player ownership declined 6% showing 83% last year. Other things weren’t all that dramatic. I love this chart for some reason.
Computer-based Video Consumption
As I’ve already mentioned, 157% growth for five years through Q2 2013 in terms of computer-based video consumption. Mobile users spend 59% more time watching video on their mobile devices. They also spend 85% of their time using apps as opposed to the mobile web. I think I mentioned that any online video publisher should have an app multiple times over the past year or more so you all have one now, right?
Television has taken a big hit in terms of time spent and is down 2:44 per month since 2012 alone. Granted, it still does pull 133 hours and 49 minutes. The only other major activity that lost time in the same time frame according to the report is using the Internet on a computer, which lost 1 hour and 54 minutes a month, now totaling 27 hours and 3 minutes a month.
In terms of digital video, time-shifted TV is up 1:42 (13:12 total), watching video on Internet is up 43 minutes (6:41 total), mobile subscribers watching video on a mobile phone is up 23 minutes (5:48 total), and using a DVD or Blu-Ray device is up just 7 minutes but still totals 5 hours and 24 minutes overall. Remember, these are all just since 2012 through Q3 2013.
Broadband-only Homes Big With Younger Demographics
Traditional television is not at all popular with the 18-24 and 25-34-year-old demographics. Broadband-only households outnumber them around three to one in both demographics. These are the so-called ‘cord-nevers’ as in, “we don’t need not stinkin’ cable.” More than half of all broadband-only homes skew younger, 52%. I believe we also talked about where the Millennials are in the recent past as well and this helps reinforce that whole, they don’t really watch traditional TV.
It’s clear to see that this is going to be an ongoing trend. By the next report that 25-34 demographic could easily be 1/3 broadband-only and the younger could be well over one-quarter. So what is it that these and others are watching without traditional TV?
Not So Fast, Nielsen, Says NAB
However, this demographic of broadband-only homes will not be included in Nielsen’s ratings sample, due, of course, to pressure put on them by the NAB – National Association of Broadcasters, who apparently fear what that might do to their what? Reputations? Ad dollars? Audience numbers?
Seriously. Nielsen was all set to include broadband-only homes in its 2014 estimate of U.S. TV households and it would have offered a 1.2% increase to 115.6M homes. But the NAB passed a resolution which apparently scared Nielsen into backing down.
“It is in the best interest of everyone to have the most accurate research measurement,” NAB wrote in the resolution that it released on Feb. 6.
Nielsen stated it will delay the integration by a year. So if you were looking for any kind of comparable metrics in this realm, you’ll have to wait until next year now.
“Based on a thorough evaluation of the viewing patterns in broadband-only homes and industry feedback on the need to maintain stable measurement in local television, we have decided to exclude broadband-only TV homes from local TV measurement and ratings for the time being. This change will take effect at the start of the 2014-2015 television season,” Nielsen SVP of Insights and Analysis said in a statement published by Mediapost.
So much for that.
Streaming Video Environment
Of course, there’s Netflix, 38% of U.S. consumers say they subscribe or use it, a 7% jump year-to-year. They’re using a variety of devices and watching a variety of content. It’s mostly computer (44%) and a mix of TV and movies (also 44%). Almost a quarter of them watch on smartphones though and about one-fifth watch on smart TVs. The report compared device usage between Netflix and Hulu Plus and found that they run fairly parallel until you get to the game consoles, but we reported on that in the past as well.
So, in a nutshell, the computer-based video industry owes its thanks to Netflix, and I suppose to Hulu Plus. The first showed that an all-you-can-watch streaming video subscription service doesn’t need to cost a fortune nor does it need to rely on advertising in the content. The second shows that, depending on the content, you might be able to get away with ad-supported subscription streaming video. Of course Hulu Plus might just be people resigned to the fact that broadcast TV will always have ads in it and they’re simply paying for the convenience of getting it right away. If that’s the case then that content will most likely never show up on Netflix, who can put more effort into getting other premium cable channel content like Breaking Bad and its own original content like House of Cards.