Q4 2015 - FreeWheel

Transcription

Q4 2015 - FreeWheel

VIDEO
MONETIZATION
REPORT
Q4 2015
Streaming On All Screens
#FreeWheelVMR
The premium video economy
continues to drive new scale
across a wider expanse of
screens, content, and viewers
KEY OBSERVATIONS
The evolution of the premium video economy pushed forward this quarter – and this year – with both
video views and ad views growing at a rate of over 30% across all measures. Exploring the trends in
premium video in the U.S. and Europe this quarter, we noted the following key observations:
•
Long-form on-demand and live content, up 56% and 129% in Q4 2015 respectively,
continued to drive overall industry growth
•
The majority of monetization now comes from outside of desktop and laptop environments,
representing 60% of video ad views, with over-the-top (OTT) devices and smartphones
leading that advancement
•
Programmers enabled for set-top-box video on demand (STB VOD) dynamic ad insertion
saw an average of 20% of their ad view volume generated by this platform, making it the
second largest device in video ad delivery and a symbol of the new era of consumer choice
•
Ad views from TV Everywhere (TVE) products continued to grow at a strong pace of 142%,
with 65% of all long-form ad views coming from behind the authentication wall
•
Non-direct sold ad views accounted for just 5% of Programmer inventory, but have evolved
at a robust pace of 141%
•
Multichannel Video Programming Distributor (MVPD) apps have become increasingly
popular venues for syndication, accounting for 9% of all Programmer ad views –
monetization on these apps increased 169% vs. Q4 2014
•
Programmers in Europe primarily monetized their long-form programming through Dynamic
Ad Insertion (DAI), pre-stiching ads into live streams
#FreeWheelVMR
FreeWheel Video Monetization Report Q4 2015
3
EXECUTIVE SUMMARY
Streaming On All Screens
Viewers have long made the philosophical leap that television is not the physical set but the content itself,
and with Publishers and Advertisers fully buying in, we see both consumption and distribution of premium
video programming expanding across all screens. So with that, we are more than excited to share with you the
findings, conclusions, and predictions of the Q4 and Full Year 2015 FreeWheel Video Monetization Report.
Taking a deeper look at what people are watching on the big screens in their actual living rooms on their settop box video on demand (STB VOD) and over-the-top (OTT) streaming devices we find that, unsurprisingly,
the use-cases for both are strikingly similar across entertainment content. Then we unpack the not-soheavily-loaded world of secondary markets by introducing a categorization of the players in that arena to
shed light on not only their role but also their value. Finally, nestled right in the middle of this labor of love,
we give you an infographic poster that we know you’re going to tack right up onto your fridge (or next to your
desk, no preference) that illuminates the trends that drove the full year metrics in 2015.
In a continuation of the auspicious trends we have shown for many a quarter, long-form on-demand and
live streams were the fastest growing content dimensions at 56% and 129% year-over-year increases in ad
views, respectively. In a major shift, monetization outside of desktop and laptop environments accounted
for a majority of dynamically served video ad views at 60%. Across the big screen, OTT saw an impressive
lift in monetization at 76%, while, on the handheld end, smartphones led the charge in growth at 92%.
Authenticated ad views accounted for greater than 65% of all long-form and live Programmer monetization,
driven by a total growth of 142% in ad views seen behind the wall, which in turn was buttressed by a 169%
growth in Multichannel Video Programming Distributors (MVPDs) app viewership. For yet another quarter,
we see the value and adoption of TV Everywhere products showing strong signs of progress.
4
#FreeWheelVMR
As users increasingly turn to their digital devices
as their primary viewing gateway, we asked, “How
many ads are they seeing and where are those ads
coming from?” The average ad break now shows
over four ads, with live content pushing the trend
with an average mid-roll break that included over
six creatives. This push to linear TV standards is
also evidenced by the advertiser industries filling
those slots, with Consumer Packaged Goods
(CPGs), Retail, and Entertainment/Media taking a
collective 53% share of monetization. And while the
headlines will lead you to believe that the majority
of premium video inventory is transacted through
secondary markets, the reality is quite the opposite.
Direct sold deals still dominate the market, with
95% of Programmers’ video ad views coming from
their owned and operated channels, and only the
remaining 5% coming from secondary markets.
Nevertheless, just as the rising tide raises all boats,
we have seen significant growth here at 141% yearover-year in video ad views as a result of the overall
growth of digital video.
#FreeWheelVMR
Looking at the big picture, the total U.S. market saw
over 50 billion ultra-premium, Programmer-quality,
digital video views across all of 2015, inclusive
of the volume coming through FreeWheel. This
baseline will only continue to grow, as we predict
that the “New Living Room” (defined as anywhere,
anytime viewing) will expand with the popularity
of both on-demand and live streaming digital
viewership pushing all content to all screens.
To note, in Q4 2015 we expanded our reporting to include a wider range of
distribution channels across our client base. The enlargement of the dataset further highlights the positive trends across premium video content we
have reported on since this report’s inception.
5
CONTENT
The Great Content Race
As the premium video economy continues
to advance at a strong and impressive
pace, we dive into the trends and drivers
behind this evolving and expanding
universe. Q4 2015 saw a 32% growth yearover-year in video views and a 30% growth
in ad views [see chart 1]. Looking back
at this same time last year, we see that
Q4 2015 was even bigger in terms of ad
view growth, which was pushed out by an
impressive performance in monetization by
Programmers and in line in terms of video
consumption, which was scaled by another
strong period for Digital Pure-Plays (DPPs).
1
+32% +30%
Total Video and Ad View Growth |
Q4 2014 vs. Q4 2015
VIDEO
VIEWS
#FreeWheelVMR
AD
VIEWS
7
The fall season did not disappoint,
as viewers continued to turn to
digital platforms to access new,
catch-up, or live programming.
Consumption of shows and
streams drove the top line as
video ad views delivered across
long-form and live programming
grew at 56% and 129% yearover-year, respectively [see chart
2]. Historically trailing behind,
short-form saw a respectable 11%
increase in delivered ads pointing
to the maturing, but still important
source of inventory.
+129%
Building industry scale in premium
digital video inventory ultimately
depends on cultivating a diverse
content mix among the following
content lengths and types:
Short-Form On-Demand
(<10 min.)
video clips, music videos,
made-for-web content
Mid-Form
(5-20 min.)
+56%
web series, extended clips,
interviews
Long-Form On-Demand
(20+ min.)
linear-style full-length
programs, feature films
Live Content
(All)
live simulcasts, sporting events
+11
%
Short-form
2
8
Long-form
Live
Ad View Growth by Content Duration |
Q4 2014 vs. Q4 2015
#FreeWheelVMR
For Publishers, a notable divide exists between the Programmers and DPPs in content strategy.
Whereas live and long-form programming accounted for the lion’s share of monetization for
Programmers at 74% of ad views, DPPs saw less than 10% of their ads delivered against the ultrapremium, TV-style programming most popular in the New Living Room [see chart 3]. Since DPPs
are often aggregators of Programmer clips, until they develop original robust long-form offerings, or
acquire consistent rights to stream live sports and news, these trends are unlikely to shift.
3
Ad View Share by Content Duration | Q4 2015
23%
Mid-form
Short-form
26
%
Live
Live
1%
Long-form
PROGRAMMER
48%
Long-form
#FreeWheelVMR
3%
8%
Mid-form
10%
DIGITAL
PURE-PLAY
81%
Short-form
9
Sports-Centered Live
Classifying genres into the five content verticals of
Entertainment, Kids, News, Sports, and Music, we
observed noteworthy differences within the verticals as
they relate to monetization across content durations.
While Entertainment and Kids saw the majority of
4
ad views delivered across long-form content at
78% and 58%, respectively, News and Music
are dominated by short-form at 72% and 87%,
respectively [see chart 4]. Sports is an outlier and
skewed heavily towards live at 69% of monetization.
Content Verticals by Ad View Share of Content Duration | Q4 2015
87%
78%
72%
69%
58%
33%
16%
3%
3%
Entertainment
7
17%
%
2
%
Kids
SHORT-FORM
10
27%
6% 5%
1%
News
MID-FORM
3%
Sports
LONG-FORM
13%
0 % 0%
Music
LIVE
#FreeWheelVMR
Assessing the cross section between duration and
genre, we also measured the delivery of video ad
views by content vertical and segment. Entertainment
(the summation of four segments: full episode
entertainment, entertainment clips, movies, and
entertainment simulcasts) comprised both the largest
vertical and contained the single biggest segment
of monetization at 45% and 32%, respectively [see
chart 5]. Sports accounted for the second largest
piece of the pie at 29% and drove overall top line
growth across monetization at 83% year-over-year.
The impressive leap in Sports monetization was
fueled by live sports streams, which accounted for a
noteworthy 20% of all ad views in Q4 2015.
5
Ad View Share and Growth by
Content Segment | Q4 2015
Monetization of live content is driven almost entirely
by Programmers, and, as we see here, the majority
of that is across Sports content, with only 1% across
Entertainment Simulcast and 2% across Live News.
Until there is wide-scale adoption by Programmers
to launch online simulcasts of their linear feeds, the
majority of entertainment consumption will happen
as catch-up and/or binge viewing. We expect to see a
shift across News content. Programmers have begun
to launch apps which simulcast their regular linear
programming, so as they begin to monetize those
streams with dynamic ad insertion, the balance of the
pie will see more red.
+37
%
YOY
12%
News
Live News
On-Demand News
+11%
YOY
Entertainment
32%
Music
2%
9%
Sports
Live Sports
On-Demand Sports
20%
Full Episode Ent.
Episode Clips
Movies
Ent. Simulcast
3%
1%
3%
9%
9
%
+15%
YOY
Kids
+47%
YOY
+83%
YOY
#FreeWheelVMR
11
DEVICE
Broad Stream
Q4 2015 was yet another record-breaking quarter, with digital video flooding across all screens
and breaking full force into the new and actual living room. For the first time since we have been
reporting on this analysis, monetization outside of desktop and laptop has fallen below 50% of
delivered video ad views.
Propelled by 76% growth across OTT (Roku, Apple TV, Chromecast, Gaming Consoles, and Smart
TVs) and 92% on smartphone devices, as well as the inclusion of STB VOD, which amounted
to 10% of total delivery, never again will the browser be the first stop for digital video content
[see chart 6]. Further isolating out Programmers enabled on STB VOD environments, TV on the
TV accounted for 20% of total video ad views and an even greater share for those focused on
Entertainment programming. We expect both the volume and share to continue to increase as the
cable and satellite operators go live across the Dynamic Ad Insertion (DAI) environment, tapping
into their existing large scale volume of on-demand viewing subscribers. The 32% of monetization
happening on the big screen (i.e. STB plus OTT) is indicative of the increasing promise of
‘unification’ (which is critical to acheive scale) and a recognition from the buy-side that the big
screen represents a safe, viewable, engaging environment to reach their audiences.
6
20% 20%
Ad View Share by Device | Q4 2015
10%
OTT Device
+76%
YOY
OTT Device
22%
+76
Tablet
+40%
YOY
%
YOY
Tablet
9 %
+40
%
YOY
22%
19
Smartphone Smartphone
YOY
10%
40%
9%
%
+92%
of enabled
of enabled
Programmer Programmer
*
volume
volume*
STB VOD
STB VOD
40%
Desktop/Laptop
Desktop/Laptop
19
+0.1%
YOY
%
+0.1%
YOY
+92%
YOY
*FourFronts STB VOD and*FourFronts
Canoe PhaseSTB
III integrations
VOD and Canoe Phase III integrations
* FourFront STB VOD and Canoe Phase III Integrations
#FreeWheelVMR
13
Although viewership continued on desktop and laptop screens, the growth in monetization has plateaued
across the mature environment. Smartphones and tablets, often grouped together as handheld devices,
saw another strong quarter of lift in video ad views at 72% together, putting them just behind OTT metrics.
Focusing on exactly what devices comprised the leading OTT share, we found that Apple TV and Roku
continued to take the largest pieces of the pie, at 44% and 34% of total ad views, respectively [see chart
7]. Furthermore, although a “winner-takes-all” outcome is unlikely across the OTT market, as Programmers
and DPPs continue to develop their footprint via applications, the market will evolve and likely shift as the
invisible hand of viewer preference shapes the trends.
7
OTT Ad View Share by Device | Q4 2015
Smart TV
Gaming Console
Amazon
1%
1%
15%
Chromecast
5%
Roku
14
44
%
Apple TV
34%
#FreeWheelVMR
26
10
17
27%%
38
Inside Any Screen
31
%
52
%
63
%
52
%
63
38%
When thinking about the relationship between device screen size and content duration consumption (and by
%
extension content type), the width of the screen is by no means the singular driver.
% Looking from left to right,
and in decreasing average screen size, OTTs and tablets are dominated by long-form and live, each seeing
95% and 69%, respectively, of video ad views delivered on true TV-style content [see chart 8]. While both of
these device types create a lean-back viewing experience, tablets also lend themselves to bite-sized content
%
63
64%
36
36
8
31%
36
Ad View Share by Device and%Content Duration | Q4 2015
26%
10%
17%
27%
52
38
%
63
Desktop/
Laptop
36%
Desktop/
Laptop
%
Desktop/
Laptop
%
64
%
Smartphone
Live
31%
31%
31%
Smartphone
Live
20+ min.
Tablet
Smartphone
Live
20+ min.
Tablet
OTT Devices
< 20 min.
5%
Desktop/
Laptop
Smartphone
Live
16
Tablet
20+ min.
20+ m
5%
OTT Devices
< 20 min.
#FreeWheelVMR
< 20
consumption by being more physically portable, as
evidenced by the 31% of ad views seen on short-form.
Meanwhile smartphones, on the smallest side, suit
themselves best to the high-volume, low-commitment
world of clip ingestion and on-the-go viewership,
with 63% of monetization happening on short-form
content. However, smartphones can also prove
handy when sneaking in an episode at work or trying
to watch two games at the same time, adding up
to that 37% of monetization across live and longform. Finally, desktops and laptops appear to be the
most versatile of the screens, with ad delivery split
evenly across the three content duration buckets.
The cookie-heavy browser environment allows for
the greatest degree of consumer targeting, as well
as a variety of measurement across currencies,
so it is beneficial to Publishers to launch their full
library of content across sites. In summary, no factor
alone determines where a user choses to view
content, or for how long, but rather a combination
of convenience, platform configuration, content
availability, device mobility, and screen size.
#FreeWheelVMR
17
This quarter we decided to peek
into what people were watching
from the comfort of their living
rooms on their big screen
television. Not surprisingly,
we found that people like
watching television on their
televisions. Both on OTT and
STB VOD devices, the majority of
monetization happened across
full episodes of televisions
dramas, comedies, reality, and
documentary programs. On OTT
devices, 30- and 60-minute
shows and live sports streams
proved to be most popular and
claimed the largest share of
monetization at 54% and 29%,
respectively [see chart 9]. STB
VOD skewed even more towards
full episode entertainment
at 77% of delivered ad views
[see chart 10]. Of course, this
is not a true apples-to-apples
comparison, given OTT devices
have access to applications with
live streaming and STB does
not. However, controlling for this
difference, these metrics tell us
that the use-case for STB-VOD, a
device by definition already in the
home of a Pay TV subscriber, is
essentially the same from a user
perspective as OTT.
18
9
Ad View Share and Growth by Content Segment on OTT | Q4 2015
Music
Entertainment
News
Live News
On-Demand News
Sports
29%
1%
%
1% 2 %
2% 2%
1
Live Sports
On-Demand Sports
10
54
%
Full Episode Ent.
Entertainment Clips
Movies
Ent. Simulcast
Kids
4% 4
%
Video Ad View Share and Growth by Content Segment on STB VOD |
Q4 2015
Entertainment Vertical
Composition by Genre
Full Episode
Entertainment
0.7%
On-Demand News
Kids
Movies
10%
77%
10%
15%
10%
65%
Documentary
Reality
Scripted Comedy
Scripted Drama
12%
#FreeWheelVMR
SPOTLIGHT ANALYSIS
WHAT DROVE
GROWTH
IN 2015
A long time ago, in a living room not that far, far away...
In our year-end report, we always try to do something special and new. This year we
introduce our inaugural infographic (is that what all the hip reports are doing these
days?!) to illustrate and elevate the trends that drove 2015.
#FreeWheelVMR
19
WHAT DROVE GROWTH IN 2015?
The question that all parties — Publishers, Advertisers,
and everyone in between — are currently trying to
answer is: where is the premium video economy
going, and how can I best position myself to be
successful? Looking at the trends that drove the
market in 2015, we can surmise at least some of
the factors that will drive growth in this fragmented,
multi-screen, many-currency world. As Advertisers
increasingly shift spend towards digital
video, and Publishers turn up ad loads
across programming, the break-neck pace
of growth across content, devices,
and distribution channels is
unlikely to slow anytime
soon.
+32
%
S
W
E
VI
O
E
VID
+30
%
S
W
E
VI
D
A
2014 VS. 2015 AD VIEW GROWTH
INDUSTRY GROWTH - FULL YEAR
+35% YoY
PROGRAMMERS
DRIVE MONETIZATION
DIGITAL PURE-PLAYS
vs PROGRAMMERS
+19%
VIDEO
VIEW
VI
EWS
EW
S
+35%
AD
VIEWS
PROGRAMMERS
+42
%
VIDEO
VIEWS
+18%
AD
VIEWS
DIGITAL PURE-PLAYS
+42% YoY
DIGITAL PURE-PLAYS
SCALE AUDIENCE
OTT/MOBILE
CONTENT DURATION
+115%
+55
%
+12
%
+88
%
LIVE
CONTENT
LONG-FORM
ON-DEMAND
ON
DEMAND
SHORT-FORM
SHORT
FORM
ON-D
ON
DEM
EMAN
AND
D
MOBILE
OTT
+115% YoY
LIVE CONTENT
DRIVES TOP-LINE GROWTH
CONTENT VERTICAL & SEGMENT
+127% YoY
+170%
ENT.
SIMULCAST
+5%
LIVE
LIVE
NEWS
% SPORTS
+64
SPORTS
LIVE SPORTS
+135%
+127%
ENTE
EN
TERT
TE
RTAI
RT
AINM
AI
NMEN
NM
ENT
EN
T
+15%
NEWS
NE
WS
LEAD TOP CONTENT
SEGMENT GROWTH
+39%
MUSIC
ADS PER MID-ROLL BREAK
+28
% LIVE CONTENT
YoY
+101%
HIGHEST GROWTH &
INCREASE IN TIME
5.7
112
SECONDS
LIVE
We have really
beautiful data.
3.41
77
SECONDS
ON-DEMAND
Wink, wink. For additional insights into
our Video Monetization trends, contact:
Brian Dutt
Vice President, Strategic Development
[email protected]
DISTRIBUTION
22
#FreeWheelVMR
How to Get Away with Inventory
As Programmers continue to grow their digital
audience, they need to determine the optimal
distribution strategy to reach the right audience and
monetize their content effectively. One strategic lever
that continues to grow in importance for Programmers
is video syndication (defined as viewing that occurs
outside of a Publisher’s Owned and Operated
properties), which accounted for 15% of Programmer
video ad views in Q4 2015, as compared to 13%
a year ago [see chart 11]. Meanwhile a relatively
small share of total video ad views were seen across
MVPD applications and premium digital portals
(such as AOL, Microsoft MSN, etc.), at 9% and 4%,
respectively. In terms of syndication across Portals,
this indicates a cautious approach by Programmers
to push their content outside of their native footprint.
Nevertheless, the huge year-over-year growth, at 169%
and 105%, respectively, in these categories points to
a shifting perspective. The greater popularity of MVPD
syndication, which consists of TV Everywhere apps and
sites, compared to that of Portals, which are premium
digital aggregators of professionally produced content,
is a positive sign for cable and satellite providers that
the TV Everywhere value proposition for Programmers
is growing. On the flip side, while some customers are
still finding it challenging to gain access to their Pay TV
content digitally, viewership and usage has increased
in the past three years across the varying channels,
as indicated by GfK Research in their TV Everywhere
2015 report*. In the next section we take a deeper and
broader look at how Pay TV is being monetized across
the whole digital landscape.
#FreeWheelVMR
11
% of Ad Views by Syndication Platform,
Programmers | Q4 2014 vs. Q4 2015
15%
2%
13%
4%
5%
%
+105
3
%
%
+169
5%
Q4
Q4
2014
MVPD
9%
2015
Portals
Syndication Net/
Longtail
*(http://www.gfk.com/zh-tw/insights/press-release/over-half-of-viewers-inpay-tv-homes-have-used-tv-everywhere-services-up-from-2012/)
23
It’s Always Sunny in TVE
rate we reported in Q4 2014. Furthermore, the
steady climb will likely never reach 100% of TV-style
content being put behind the authentication wall,
as Programmers will continue to leave programming
and streams in front to build audience and as a
part of strategic marketing initiatives. Nevertheless,
the initial learning curve by viewers to access TV
Everywhere content was pushed out by quadrennial
sporting events, so we expect to see adoption
continue to rise with boosts over the coming year.
Authenticated viewing (defined as viewing that
occurs after viewers enter their MVPD subscription
credentials to access content aired on Broadcast,
Cable, or Satellite TV) for long-form and live content
accounted for 65% of monetization this quarter,
up from 56% in Q4 2014 [see chart 12]. While
we saw very strong progression in video ad views
across authenticated content at 142% year-overyear, looking back at the previous four quarters of
growth there is a notable decline across the top-line,
especially when comparing to the staggering 591%
12
Long-form Authenticated Ad Views and Authentication Rate,
Programmers | Q4 2014 – Q4 2015
+142
%
56%
Q4
2014
24
57%
Q1
2015
60%
Q2
2015
65%
Q3
2015
65%
Q4
2015
#FreeWheelVMR
Taking a closer look into the ‘what’ and the ‘where’
of authentication, we measured what stimulated
monetization in terms of both content and distribution
platforms in Q4 2015. Through the programming lens,
Entertainment content was the big winner in terms of
video ad views, increasing at 202% year-over-year and
driving itself up from a minority stake of 35% last year
to a solid 43% of monetization in the fourth quarter
[see chart 13]. Across access points, mobile, tablet,
and OTT devices all had triple digit growth and now
see the majority of monetization at 62%, an almost
13
Long-form Authenticated Ad Views
By Content Vertical, Programmers |
Q4 2014 vs. Q4 2015
9%
6%
55%
46%
News
+98%
YOY
1%
35%
Long-form Authenticated Ad Views
by Device, Programmers |
Q4 2014 vs. Q4 2015
27%
31%
+183%
Kids
7%
15%
7%
59%
+2073%
YOY
17%
37%
Entertainment
+202%
#FreeWheelVMR
2015
Tablet
+394%
YOY
Smartphone
+509%
YOY
Desktop/Laptop
YOY
2014
OTT Devive
YOY
+69%
43%
14
YOY
Sports
5%
perfect inversion of last year where desktop and
laptop environments held the stake at 60% of video
ad views [see chart 14]. Both these developments
are especially exciting considering how the majority
of authentication was happening only across Sports
content on PCs and Macs in Q4 2014, and even when
we last reported on these metrics in Q1 2015. Viewing
has now truly shifted across the broader range of TVstyle programming on the full gamut of devices upon
which TV is actually available.
+53%
YOY
2014
2015
25
Law and Order: FWU*
This quarter we take a deep dive into the often
unclear and, from this report’s perspective,
previously uncharted waters of non-direct sales
channels. Looking at only Programmer inventory,
we saw the same top-line trend quarter after
quarter: Programmers allocate the vast majority of
their inventory to direct sold channels, monetizing
it across their owned and operated properties
and through syndication. Nevertheless, while the
total share of ads monetized through secondary
markets remains at a paltry 5% of all monetized
video ad views, the volume of video ads that sat
behind that has grown a staggering 141% yearover-year [see chart 15]. Furthermore, while the
top line aggregated number remained small across
all premium Publishers, we did see some select
Programmers utilizing secondary markets or third
party monetization platforms, and the partners that
create them, more aggressively.
In today’s premium video economy, there are a
multitude of possible “monetization” partners and
platforms for content providers to choose from.
First, we define Exchanges as open and private
markets for buyers and sellers to trade across with
26
15
Secondary Sales Channels Share of Ad
Views, Programmers | Q4 2014 vs. Q4 2015
3%
of Programmer
Ad Sales
0.6% 1.3%
1.1%
97%
5%
of Programmer
Ad Sales
%
-11
%
+154
+297
%
1.6%
0.4%
3%
95%
+141%
YoY
Total Growth
of Secondary
Channel Share
Q4
2014
Exchanges
Platform Partners
Q4
2015
Ad Networks &
Syndication Partners
Direct Sold
#FreeWheelVMR
varying degrees of automation. Exchanges see
the largest share of Programmer inventory at 3%
of all monetized ad views passing through them
in Q4 2015 and are also driving topline growth in
the space at 297% year-over-year [see chart 15].
What the numbers don’t show is the majority of the
volume passing through Exchanges is via private
marketplace transactions where Content Owners
are able to put tight controls around their inventory.
Second, Platform Partners are a mix of DemandSide Platforms (DSPs) and Supply-Side Platforms
(SSPs), which provide technology and tools to
enable automated transactions. Lastly, we group
Ad Networks and Syndication Partners together
into the third bucket. While the right Syndication
Partners can benefit a Content Owner through new
distribution opportunities (assuming sales rights are
tightly managed), the use of Ad Networks can carry
the greatest potential for risk, since it is here that
Programmers forgo the largest amount of control.
Judging from the 11% decline in total video ad views
across the third group, Programmers have been
pulling their inventory away from this potentially
unsafe space and reallocating it through channels
where they have a much tighter grip on business rules.
We took great consideration in categorizing each
monetization partner in a way that represents the role
and/or service provided to the Content Owners. The
challenge here is that different monetization partners
often play multiple roles, making categorization
not only an imperfect science but also a source of
considerable confusion for said Content Owners.
Defining monetization partners by role aligns with our
firmly held philosophy that Programmers must, above all,
protect the value of their inventory. This means making
decisions about monetization partners against a defined
set of business rules that protect the Programmers’
interests. Most often this means focusing on technologybased solutions that enable access to new demand
sources and the ability to increase yield while still
maintaining full-control of inventory, i.e. who can access
it and under what terms. In addition, for long-form and
live content, all compliance and regulatory protocols
must still be maintained as must the integrity of the
user experience.
* FWU (FreeWheel Universe) - In the premium video ecosystem, the people are represented by two separate yet equally important groups: the Content Owners who own,
protect, and monetize premium supply, and the Buyers, Platforms, and Marketplaces who otherwise arbitrage that supply. These are their stories.
#FreeWheelVMR
27
VIEWER EXPERIENCE
Modern Ad Loads
In the final quarter of 2015, digital
Programmers loaded their commercial
breaks with slightly over 4.2 ads per
mid-roll slot, netting out to an average
break time of 99 seconds. This is the
largest and longest quarterly average
ad break length we have ever reported.
Live content continued to set the longest
total ad time, lasting an average of 130
seconds, and the largest number of ads,
with a mean of slightly over six ads per
mid-roll slot [see chart 16]. On-demand
content, which is not bound to any set
commercial break length, trailed behind
at an average of 3.7 ads translating to
92 seconds. Even as content providers
tinker and experiment with the optimal
ad experience, we continue to see
that push upward towards the linear
standard. Furthermore, we expect to see
an increased focus on ad experience
innovation as Content Owners look at
long term monetization growth through
the lens of improving user experience.
This may come in the form of testing
non-standard commercial break patterns
and/or new creative formats, with an
overarching and deeper focus on data
science to inform decision making.
#FreeWheelVMR
16
Ads per Mid-roll Break by Request Type | Q4 2015
Average
ad break length
130
seconds
Average
ad break length
92
seconds
6.2
Ads
per
break
Live
3.7
Ads
per
break
On-Demand
4.2 Ads per Pod - 99 Second Long Pods
29
Looking at the actual creative that
served against different content types,
we found that ‘form follows function’ as
Publishers matched creative duration to
content duration. While live and longform content skewed towards 30-second
spots, short and mid-form were
dominated by 15-second creatives [see
chart 17]. The strategy behind this is
to maximize revenue while maintaining
viewer engagement across a variety of
content types.
17
Ad Duration by Content Duration | Q4 2015
30 seconds
59%
63%
45%
45%
46%
15 Seconds
15 second
ads overall
41%
Live
30
‘Form follows function’
as Publishers matched
creative duration to
content duration
37%
55%
55%
Long-form
Mid-form
Short-form
#FreeWheelVMR
Continuing to explore a metric introduced in
this report last quarter, we looked at pre-roll
monetization (defined as the percentage of shortform videos with at least one ad play during the
pre-roll slot) on the five main content verticals [see
chart 18]. We discovered that viewers were most
likely to see an ad in front of Sports or News clips
at 91% and 77% of video starts, respectively, and
least likely to see any in front of a Music video
or short-form Kids’ content at 36% and 42%,
respectively. Across bite-sized Entertainment
videos, often marketing materials for their long-form
originals in and of themselves, viewers had a 58%
18
chance of seeing promotional content play before
the intended clip. These differences in ad load are
the result of a combination of sell-through and user
experience settings. News, for example, has more
unpredictable inventory as a result of breaking
stories and events that, for better or for worse,
spike viewership. Music videos and Kids’ clips, on
the other hand, are well suited for playlist-style
viewing where an increased ad load could hinder
viewer experience, potentially alienating audiences
to other channels. Short-form Pre-roll Monetization* by Content Vertical | Q4 2015
58%
42%
77%
91%
36%
ENTERTAINMENT
KIDS
NEWS
SPORTS
MUSIC
* The percentage of videos that had at least one ad play during the pre-roll slot
#FreeWheelVMR
31
ADVERTISING
Million Dollar Placement
Consumer Packaged Goods (CPG) and Retail industries led advertiser verticals in Q4 2015 in share of video
ads, each yielding 18% and 25% of total monetization, respectively [see chart 19]. Continuing the trend from
Q3 2015, Retail took the lead in the year-end push towards the holiday season, and beat out CPG for the first
time since we started reporting across this dimension of video ad view metrics. Furthermore, highlighting the
growth that each advertiser industry category saw year-over-year we find that Retail, Entertainment/Media,
and Computing Products pushed the fold expanding their video ad impression commitments at 31%, 35%,
and 34%, respectively. With more advertisers gaining confidence that digital video programming will become
as important as linear TV within five years, and the expectation that spending will shift from cable/broadcast
to digital, according to a 2015 study by the IAB*, these growth rates are unlikely to slow down.
19
Ad View Share and Growth by Advertiser Vertical | Q4 2015
Other
Computing
Products
+34%
YOY
Telecom
+16%
YOY
Auto / Gas /
Manuf / Utility
11%
Consumer
Packaged Goods
6
YOY
18
%
Retail
25%
11%
12%
YOY
Financial Services
YOY
+12%
7%
+12%
+8%
%
10%
+31%
YOY
Entertainment/
Media
+35%
YOY
* Source: Digital Content NewFronts: Digital Video Spend Study,” iab. April, 2015. http://www.iab.com/wp-content/uploads/2015/05/2015_IAB_Digital_NewFronts_Video_Ad_Spend_Study.pdf
#FreeWheelVMR
33
EUROPEAN MARKET ANALYSIS
A League Made in Europe*
Unlike their U.S. counterparts, European Programmers continued to mainly utilize DAI to monetize their
long-form inventory, which accounted for 88% of total video ads [see chart 20]. While the same content
verticals are popular across the pond, which we plan to dive into next quarter, old world Programmers are
still working to build out their DAI tech stack and instead simply air the pre-stitched linear ad loads into
live Sports, News, and Entertainment. Moreover, short-form clips appeared to be less popular, accounting
for only 7% of ad views compared to 23% in the U.S., which is likely influenced by a strategic choice by
Publishers to not monetize clips intended as marketing material.
20
Ad View Share by Content Duration | USA vs. Europe | Q4 2015
Live
Live
26%
Short-form
0.3%
Short-form
23
%
7%
Mid-form
4%
Mid-form
3%
Long-form
48
%
Long-form
88%
* The New York FreeWheel office is in Chelsea, so technically…
#FreeWheelVMR
35
As different as the spread of dynamically ad supported content
duration is in Europe, the devices that viewers used to consume
that content are incredibly familiar. Controlling for the STB
VOD delivery, both the U.S. and Europe saw less than 50% of
monetization in non-mobile browser environments in Q4 2015
[see chart 21]. Nevertheless, an interesting divergence to note
is that while monetization of long-form content skewed towards
OTT devices in the U.S., tablets retained the second place share
overall in the European market.
21
Europe sees more than
half of its ad views
outside desktop/laptop
environments, in line
with the U.S.
Ad View Share by Device | USA vs. Europe | Q4 2015
Desktop/Laptop
Desktop/Laptop
43%
48%
Smartphone
17%
Smartphone
16%
Tablet
OTT Device
29
%
#FreeWheelVMR
11%
Tablet
OTT Device
17%
19%
37
ABOUT THIS REPORT
Massive shifts in consumer viewing habits, rapid changes in technology, and the importance of
quality, premium content have created the new Premium Video Economy. FreeWheel’s platform for
video ad management and monetization powers the advertising businesses of the world’s largest
media companies, generating revenue for their ad-supported content on desktop, mobile, OTT, and
traditional STB devices. The dataset used for this report is one of the largest available on the usage
and monetization of professional, rights managed video content, and is comprised of over 160 billion
video views in 2015.
The FreeWheel Video Monetization Report is released quarterly and highlights the changing dynamics
of how enterprise-class content owners and distributors are monetizing premium digital video content.
As part of this analysis, we grouped Publishers into two categories:
Programmers and Multichannel Video Programming Distributors (MVPDs)
•
•
Generate the majority of their advertising revenue from linear TV services
Offer diverse content mix on IP-based environments
Digital Pure-Play Publishers (DPPs)
•
•
38
Generate majority of revenue from IP-based environments
Aggregate third-party content and/or are developing original content
#FreeWheelVMR
The FreeWheel Video Monetization
Report is released quarterly and
highlights the changing dynamics of
how enterprise-class content owners and
distributors are monetizing premium
digital video content
Q4 2015 Video Monetization Report
FreeWheel.tv
@FreeWheel
FOR MORE INFORMATION
MEDIA INQUIRIES
Brian Dutt
Vice President,
Strategic Development
Ayme M. Yaiser
Vice President,
Brand Marketing
[email protected]
[email protected]
©2016 FreeWheel. All Rights Reserved.

Q4 2015 - FreeWheel

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