Viewers are becoming increasingly receptive to digital video advertising, particularly behind authenticated, or TV Everywhere, content, and also on mobile devices. As more and more broadcasters publish video content behind a paywall, 46% of long-form and live video ad views now come from users signed up to a TV subscription service, an increase of 368% compared to Q3 2013. Alongside the rise in paywall ad views, live-streaming, and OTT, account for 56%, and 22% of all authenticated ad views respectively.

The numbers are confirmed in a new report from Freewheel, Video Monetization Report for Q3 2014 (registration required). If you aren't familiar with FreeWheelers, they help the largest players in the television industry generate revenue from their ad-supported content. FreeWheel’s platform is used by broadcasters like AOL, ESPN, BSkyB, ABC, DIRECTV, NBCUniversal, and Viacom.

Highlights of the FreeWheel Video Monetization Report Q3 2014

According to FreeWheel, Q3 2014 marked yet another quarter of strong growth and evolution in the digital TV market, with video ad views growing 30 percent year-over-year. In exploring the trends in the digital television industry, FreeWheelers made the following key observations:

  • Live viewing increased by 214% year-over-year, driven by growth in sports and news streaming
  • 27% of video ad views are generated outside desktop and laptop
  • Authenticated viewing grew 368% year-over-year
  • 46% of all long-form and live-streaming video ad views come from behind paywalls.
  • 58% of all clients and 79% of Programmer clients are using metrics like OCR and vCE

Digital Video Publishing Has Evolved

YouTube, Facebook, and Yahoo aren’t the only dominant creatures in the Digital Video Age. All of the largest players in the television industry understand the paramount importance of digital video to the future of TV and entertainment. They see what we see, which means that digital video publishing is evolving. After having been touted as an integral part of TV’s future for some time, it is clear from the behavior of consumers, publishers, advertisers, and investors that digital television’s time is now.

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The diverse array of viewing platforms evolved significantly this quarter. Video ad views on smartphones and over-the-top (OTT) devices increased 77% and 208% respectively year-over-year. Whereas desktop and laptop computers accounted for 86% of video ad views last year, FreeWheelers now see 27% of monetization coming from smartphone, tablet and OTT environments.

Growth of OTT Devices and Video Advertising

The remarkable growth of OTT devices is particularly critical when one considers that these devices are overwhelmingly likely to be used by younger consumers for watching longer, “TV-style” content: 87% of video ad views on OTT devices came on long-form and live content.

Elsewhere, rumors of TV Everywhere’s imminent extinction have proved to be greatly exaggerated. As Programmers put more content behind authentication, or paywalls, viewers are following just behind. 46% of long-form and live video ad views now come from authenticated users, that's an increase of 368% year-over-year. Authenticated viewing has grown in lock-step with both the rise in live viewing and OTT devices, now accounting for 56%, and 22% of all authenticated ad views respectively.

freewheel report

Video Advertising Still Following Upward Trend

The advertising landscape for digital video continues to converge with that of linear TV. Mid-roll breaks on long-form content averaged 101 seconds in duration and 4 ads, up from 87 seconds and 3.5 ads in Q3 2013. Publishers are also working to make the adoption of digital advertising as seamless as possible for ad buyers by supporting measurement currencies, with 79 percent of leading Programmer networks using either Nielsen’s Online Campaign Ratings (OCR) or comScore’s Validated Campaign Essentials (vCE).

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While a 30 percent growth in video ad views is nothing to sneeze at, what was truly remarkable about this quarter was the consistency of message: wherever you look in digital video, there is overwhelming evidence that it is rapidly evolving and growing into its long-awaited role in the future of television.

FreeWheel chart

In other words, the TV networks may not become dinosaurs in the Digital Video Age. Who knows, they could already be flying over us into the next era.

In a week where online video marketers already know that YouTube has just introduced the YouTube Music Key beta, a monthly subscription service starting with the promotional price of $7.99/month (discounted from $9.99/month) that will give you all that—ads-free music, background play and offline viewing. Most have already heard that Facebook has just announced that it will be reducing overly promotional page posts in its News Feed beginning in January 2015. And many have learned that Yahoo has just that it is acquiring BrightRoll for approximately $640 million in cash. So, occasionally, it’s also worth looking through the wrong end of the telescope because you never know what you might see while everyone else is looking in the opposite direction.