So not only is "TV Everywhere" usage on the rise, like we knew it would be, but it seems that video ads also sky-rocketed for that long form content. Perhaps, this is where the MSOs (or MVPDs now - multi-channel video programming distributors) and networks should look to make up some ad revenue instead of piling ads on older VOD content on TV, looking at YOU Comcast. FreeWheel usually does a good job on the research they do and so when I saw their Q3 2013 Video Monetization Report was out, I knew it would be chock full of useful insights. One quick note about the data in their report.
The data in this report represents video that is rights-managed: aggregate monetization data for professional content from FreeWheel’s customers, and does not reflect trends for user-generated content. Starting in Q2 2013, we are solely reporting on U.S. based data. Any variation in data between this report and prior versions is due to extraction of international data. In upcoming quarters, we will begin reporting separately on international results.
So, US only, professional content that is rights-managed, check, got it.
Authenticated viewing, requiring a user to provide proof that they have a paid TV subscription, boomed in this quarter jumping to 14% of all long-form ad views up from 8.3% last quarter. That's 5.9% in a quarter and at that rate could mean that non-pay TV subscribers could be locked out of a majority of content by the end of 2014.
So while it's blocking out a lot of the cord cutters and probably a large section of the Millennials, it seems to be working for the industry on the whole. Syndication, defined as viewing that occurs outside of Owned and Operated properties of video publishers, as in YouTube, Yahoo!, etc., is also a big source of video ad views, 63% of Digital Pure-Play video views, defined as view occurring on digital only video networks.
On the flip side, only 10% of all ad views are on the MVPD digital properties. It's a pretty significant separation there, mostly because they have been trying to keep people locked into their own properties but are now seeing the value of having multiple distribution partners for their content methinks.
The thing about it is that I'm not altogether opposed to authentication. However, if there are not viable and affordable options to it, then it seems counter-productive as it will essentially begin locking out vast swaths of demographics that don't want to pay $50-100 a month for pay TV. This is where I think Hulu could really shine if they'd get their act together and figure it out. Mayhaps the greed of the few outweighs the pocketbooks of the many?
Mobile Device Viewing Jumps 200%
TV Everywhere is the dream to have your content whenever and wherever you like, but still, most of that viewing is on the PC. I guess that's part of the whenever desire. But in the last year, the wherever has tripled its ad viewing meaning it's definitely the trend to be focusing on, especially with Millennials being the ones more focused on this particular style of viewing. Check out the graphs below courtesy of some recent research from YuMe.
Do Millennials watch Live TV? Not so much, so why would they have a pay TV subscription? With forced authentication, you're losing out on that audience. Also, they watch as much video on their PC as they do on a DVR.
However, they consume more content across all genres except news. That means they are a major piece of the TV Everywhere consumer puzzle.
So we know who is watching what and which device they like to use. Theoretically, you could do some loose extrapolation to determine what percentage of ads were seen by each demographic or whatever, but we've only got the growth for the mobile devices. Tablets destroyed phone with a 365% growth in ad viewing versus 235% for phones. OTT devices like game consoles, Apple TV, Roku and others only had 125% growth by comparison and PC, which still maintains the most viewing of 86%, only grew 10%. This is all indicative of the TV Everywhere generation who are growing up with tablets and big screen smartphones in hand. The OTT growth also looks like it could be at the expense of pay TV subscriptions.
That tablet growth is pretty much a straight line for the last year. If it continues at 365% growth in 2014 at the end of Q3 next year it could be more than OTT, tablet and mobile combined Q3 2013.
Content Length vs. Ad Views
Last year I think it was, research showed that there is a correlation between screen size and content length. That is probably one of the reasons for the 86% ad view number for PC. Bigger screen means more long-form content, means more video ads. But that trend may be changing. OTT boxes, which presumably have the largest screen, do indeed lead in the longer form factor, 20+ minutes, consuming 53% of the ad views for the category. But the iPad overtook the PC in that same category pulling in almost one-third of all ad views with the PC garnering just a quarter of them.
Meanwhile, on the other end of the spectrum, things have become sort of a jumbled mess as almost every platform landed in the 20-30% range for 0-2 minute long content meaning there is a near equal share of ad views across the five platforms it broke out.
What it does seem to indicate is that perhaps we're breaking out of that screen size = length of content consumed. It could be a variety of factors including availability of content, larger smartphone screen size, lower price and more iPads available, more OTT options, etc, etc.
There's a whole lot more to talk about in the FreeWheel Q3 2013 Video Monetization Report, so grab your copy and read along as I parse it out.