A new Ooyala study documents the huge impact that nontraditional telecasts (Internet Protocol distribution) are having on the traditional television business.
The year 2012 was a historic one for online video viewing. Online — via PCs, tablets and mobile phones — the world watched a man jump to the Earth from outer space, the London Olympics broke online records and the first video to hit a billion views on YouTube taught us all how to dance to "Gangnam Style."
The industry is in for even grater milestones in the next few years, according to a new study entitled “Global Video Index: 2012 Year in Review” — recently released by a company called Ooyala that specializes in online video and analytics. The W. El Camino Real, CA-based company helped the PAC 12 college sports conference network launch last year across cable TV and online properties. It included authentication of individual subscribers to securely access the video.
The Ooyala study documents the huge impact that nontraditional telecasts (Internet Protocol distribution) are having on the traditional television business and also shows how viewing patterns on portable devices are changing and previously unwelcome long-form video is now being consumed on all available display devices.
Ooyala was founded in 2008 to help media companies, marketers, brands and TV networks earn more money from online media and connect more easily with viewers around the world. The company said with its clients can anonymously measure the viewing habits of nearly 200 million unique viewers in 130 countries every month. Ooyala software is used to process billions of video analytics events each day.
Among other findings is that viewers watch live video online 18 times longer on desktop PCs than prerecorded programming; five times longer on tablets and four times on mobile devices. On connected TVs and gaming consoles the number is roughly nine times longer engagement than VOD. Watching television on tablets, like Apple’s iPad, more than doubled in 2012 as mobile, social and video converged more seamlessly than ever. The same goes for game console users, who watched more movies and television shows than ever before. (Xbox users watched 18 billion hours of video in 2012.) Video viewing over IP, the study found, will catch up with traditional video viewing in the next few years and it will bring groundbreaking changes to the television business.
The study also found that in 2012 consumers increasingly watched long-form content as well, across all platforms. More than 57 percent of video viewing on desktops was for content more than 10 minutes long. In 2011 the number was well under 50 percent. Tablet and gaming console users also watched longer form content. Interestingly, on PCs nearly a quarter of video watched was longer than one hour; on tablets about one third; and on connected TVs about 45 percent. Mobile devices represent about 15 percent.
“As we look at the evolution of the video streaming industry, we think it will go through three phases: access, ease of use and ultimately quality,” said Bismarck Lepe, co-founder of Ooyala. “The reality is that a lot of these new connected TV services give you more access to content than you would see on your traditional TV, but quality is not the first consideration.”
Along with these monumental shifts in viewing patterns (hopefully) comes advertising. Video ads, Ooyala’a study found, were the fastest-growing category of online advertising in 2012, with U.S. ad spend increasing 46 percent to $2.93 billion.
“We’re continuing to see new types of business models evolve, for the good of consumers and the media content owners themselves,” said Lepe. “Although I would say the technology and infrastructure is not yet capable of replacing traditional television, we are starting to see greater adoption of over the top services by consumers and OTT services by operators and rights holders.”
He said one of the big stories for 2013 is that the Android operating system will overtake Apple’s iOS platform on connected devices. In 2012, across all tablets and mobile phones, Android users represented about 33 percent of the market while iOS attracted 67 percent.
While Lepe admitted that spending on Internet-based marketing is still a far cry from traditional TV ad budgets, marketers and brands are moving aggressively into the online video space. Ooyala expects even more of this growth in the coming year, as audience insights become more sophisticated and financial returns more apparent.
It is already clear, the report said, that online video is a disruptive influence on the traditional television business. The trend forced Nielsen to finally announce plans to include online streaming audiences in its metrics starting this fall.
“What we’ve found is that live or currated content that mimics live far outweighs and provides more engagement for our customers than just straight VOD,” Lepe said, adding that Ooyala supports both live and VOD content distributed to multiple devices.
Rather than simply relying on overall viewership numbers as a “proxy number” for how many people watched an advertisement, Nielsen will soon enable advertisers to tell whether viewers are skipping ads or watching them.
Lepe said Ooyala works with TV networks, cable and satellite providers, movie studios and online media companies to put premium video content on tablets, smart phones, connected TVs and PCs all over the world. One in every four Americans watches video on an Ooyala player, and more than half of its traffic comes from outside of the U.S.
Consumption also varies by region. Video consumption on mobile tablets in Japan is more than double that of the U.S., while consumers in Great Britain watch video on tablets about 15 percent of the time.
“We found that regions that have heavy public transit usage also watch a lot of video on their cell phones and tablets,” Lepe said. “Other parts of the world also have better broadband infrastructure
Also interesting, based on last year’s presidential election, blue-state citizens had a higher online video engagement than consumers living in red states, watching 16 percent more and averaging 20 seconds longer per play.
Ooyala said the data sample used in its latest Global Video Index covers all four quarters of 2012, from January 1 through December 31. All data was taken from an anonymous cross-section of Ooyala’s global customer and partner database — an array of broadcasters, studios, cable operators, print publications, online media companies and consumer brands. These firms broadcast video to more than 130 countries from more than 6000 unique domains. Nearly 200 million unique viewers watch an Ooyala-powered video every month.
“For us, the results of the Global Video Index are very exciting because we are helping to drive a lot of this transition from the traditional, over-the-top and connected cable world to a primarily OTT streaming world,” Lepe said. “I think much of these findings are a bit of a foregone conclusion, but we’re still unsure about when it will happen.”