From Sceneclips:
Key Takeaways On The Future Of Online Video:
Online video vs. television viewership
As the stats below demonstrate, television still dominates online video in terms of the number of eyeballs, frequency and time viewed. However, viewer engagement is another story.
- 2009’s online video viewership is estimated to be 144 million ~ 72% of Internet users.
- Television’s audience is almost 300 million.
- Weekly viewership for online video drops about 63% to 53 million viewers.
- Weekly viewership for television is 250 million.
- Average viewer consumption of TV is 4.7 hours per day.
- Average viewer consumption of online video is about 4 hours per month.
- Online video only accounts for 1% of total video viewing time in the US.
- However, research suggests that online video usage fuels TV viewership.
What online video viewers are watching
One of the largest trends to keep an eye on is professionally created contents’ adoption in the online marketplace. Long form professional content inherently presents more viable business models. As viewer habits change with the increasing volume of professional content delivered over the Web, new opportunities for filmmakers will emerge… and Jeff Zucker will no longer be trading NBC Universal’s analog dollars for digital pennies (if he still has a job).
- 8 of the top 10 most popular online video genres are short form.
- Still, 28% of online video viewers watch full length TV shows and movies, and that figure is expected to grow dramatically over the next few years.
- Hulu’s audience is about 38 million viewers per month.
- Hulu runs 4 ads per hour.
- Television runs 32 ads per hour.
What really matters: MONEY
Actually, what REALLY matters is growth. The Internet is consuming the entire media industry. The newspaper business is walking the plank and an increasing number of magazines are closing their doors (R.I.P. Conde Nast Portfio). Meanwhile Google is still growing at 20% annually. The Company reported earnings last week and beat analysts Q3 expectations by 8.67%. Google also beat analysts expectations on top-line revenue growth by 3.3% for the quarter, with pay-per-click ads growing 14% over last year – all of these print ads need a place go!
- Total media spending (television, radio and print) will decline 14.5% in 2009.
- Yet, online video spending is expected to grow 44% in 2009.
- Online video ad spending amounted to $324 million in 2007.
- Online video ad spending will exceed $1 billion in 2009.
- However, that figure only makes up 4.3% of total Internet ad spending and only 1.6% of TV ad spending in 2009.
- By 2013 online video advertising will represent 5.5% of TV ad spending ~ 244% growth over 5 years (28% CAGR).
- eMarketer estimates that online video ad spending will continue grow at over 40% for the next 3 years.
Viewer engagement and the pulse of the market
Because online video is a lean-forward interactive experience, viewer engagement is far higher than television. This will result in marketers continuing to shift ad dollars from television to online video. In addition, Internet advertising provides more targeting and accountability than TV advertising. In a tough economic climate, measuring return on investment (ROI) becomes even more critical.
- The average consumer recall rate of an online video ad is 50%.
- The average recall rate of a television advertisement is only 18%.
- Viewers are 28% more likely to pay attention to online video ads than TV ads.
- Currently, 50% of US marketers are using online video.
- 43% of US marketers expect to shift 20% or more of their TV ad budgets to online video by 2010.
Arguments against the proliferation of online video
Online video’s business model is in its infancy. Google reported on their third quarter conference call that YouTube is getting “close” to becoming profitable… Close relative to what? While the dominant online video business model is certainly some form of advertising, to date, not one company has provided a solution that renders television obsolete.
- Piper Jaffrey says 79% of consumers are not willing to pay for television online – Advertising.com puts this figure at 94%.
- 72.6% of US ad agencies will NOT run ads on user generated content.
- The average CPM (cost per thousand impressions) for online video is $11 – $35 (depending on weather the add is a pre-roll, mid-roll or post-roll).
- The average CPM for television is $10.25.
- 31% of US ad executives say that the Internet still lacks the targeting capabilities they are looking for, and 27% say that online video advertising is too expensive.
- US online video ad spending per hour viewed averages $.17, whereas television averages $.13.
- About 60% of adults are online and watching TV at the same time.
Conclusion
The Internet is clearly the way that we will consume television in the future – but – we are not there yet. It will take time to refine a successful online video business model. The good news is that more professionally created content is building audiences every day on the Web… And as the saying goes, money always follows eyeballs.
- In 2009 only 15% of digital video traffic will com through TV’s while 85% will come from computers.
- By 2013 61.5% of digital video traffic will come through TV’s while only 38.5% will come from computers.
