Analysis for 'YouTube'

  • comScore Data Shows 2009 Was a Blistering Year for Online Video (Slides Available)

    Last Friday, comScore released its Dec. '09 data for online video usage. I've been tracking comScore's data for the last 3 years and Dec put an exclamation mark on what many of us already knew: 2009 was a blistering year of growth in online video consumption. Below are graphs of the most important data (Click here if you'd like a complimentary PDF download of all of the slides.)

    The first graph shows total online video views more than doubled from 14.8 billion in Jan '09 to 33.2 billion in Dec '09. The historical growth is even more impressive. Just two years ago, in Dec '07, comScore reported 10 billion video views.

     

    Online video usage is now nearly ubiquitous in the U.S. According to comScore, in Dec '09, 86.5% of all U.S. Internet users watched online video, up nearly 10 percentage points from the 76.8% in Jan '09. That translates to 178 million people watching video in Dec '09, up from 147 million in Jan '09. Back in Jan '07, there were 123 million viewers.

     

    Those users are watching a whole lot more videos as well. For Dec '09, comScore reported that 187 videos were watched per average viewer, up 85% from 101 in Jan '09, and more than triple the 59 watched in Jan '07.

     

    As well, those viewers spent a lot more time watching online video. In Dec '09 comScore said that the average online viewer watched 762.6 minutes or 12.7 hours, more than double the 356 minutes viewed on average in Jan '09. Here's the really incredible stat: back in Jan '07, comScore pegged this number at just 151 minutes or about 2 1/2 hours, meaning average viewing time has more than quintupled in the last 3 years.

     

    I've talked many times about how YouTube is the 800 pound gorilla of the online video market, and 2009 only further cemented this. Videos viewed at YouTube surged from 6.3 billion in Jan '09 to 13.2 billion in Dec '09. To put this in perspective, Google closed its acquisition in Nov '06. In Jan '07 (the first month comScore publicly released online video data), YouTube notched 1.2 billion views. That means that in the 3+ years that Google has owned YouTube, it has grown more than 10x in size. More amazing is that even with all the growth by other sites (particularly Hulu), YouTube has kept up its approximate 40% share of the overall online video market, starting the year at 42.9% and ending at 39.8%.

     

    Speaking of Hulu, in its first full year of operation, the site surged from 250 million views in Jan '09 to 1,013 billion views in Dec '09. Unique viewers increased from 24.4 million in Jan '09 to 44.1 million in Dec '09. But if you look at the red line in the graph below, you'll see that uniques jumped to 41.6 million by Mar '09 which I believe must be due, at least in part, to a likely measurement change by comScore. Since Mar you'll notice that uniques hovered right around 40 million each month, dipping below during the summer and then bouncing back in Q4.

     

    A few months ago I speculated that Hulu's relatively flat pattern in uniques could suggest that, in its current configuration, Hulu may have saturated the market for its content and user experience (for example, contrast Hulu with YouTube, which grew its uniques by 33% in '09 to 135.8 million by Dec '09). I'll be looking to see if Hulu can notch more noteworthy increases in uniques during '10; if not, then I think my thesis will be proven correct.

    Nonetheless, Hulu's viewers clearly love the site, with average number of videos per viewer more than doubling to 22.9 in Dec '09, up from 9.8 in Dec '08. Users are spending more time on Hulu, increasing the amount of total minutes on the site from 58 in Mar '09 to 132 in Dec '09. What's remarkable though is that the average minutes watched per video (the yellow line below), has stayed virtually constant at around 6 minutes each month. That shows that while there's plenty of long-form consumption happening at Hulu, clips are still very popular too.

     

    comScore is a great source of month in and month out online video data, but as always my caveat is that no third party can ever track usage as closely as the sites themselves, so take these numbers with a small grain of salt!

    Click here if you'd like a complimentary PDF download of all of the slides.

    What do you think? Post a comment now (no sign-in required).

     
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  • 4 Items Worth Noting for the Nov 9th Week (Flip ads, YouTube ad-skipping, NY Times video, Nielsen data)

    Following are 4 items worth noting for the Nov 9th week:

    1. Will Cisco's new Flip Video camera ad campaign fly? - Cisco deserves credit for its new "Do You Flip" ad campaign for its Flip Video camera, a real out-of-the-box effort comprised entirely of user-generated video clips shot by ordinary folks and celebrities alike. As the campaign was described in this Online Media Daily article, finding the clips and then editing them together sounds like heavy lifting, but the results perfectly reinforce the value proposition of the camera itself. The ads are being shown on TV and the web; there's an outdoor piece to the campaign as well.

    Cisco acquired Flip for nearly $600 million earlier this year in a somewhat incongruous deal that thrust the router powerhouse into the intensely competitive consumer electronics fray. Cisco will have to spend aggressively to maintain market share as other pocket video cameras have gained steam, like the Creative Vado HD, Samsung HMX and Kodak Z series. There's also emerging competition from smartphones (led by the iPhone of course) that have built-in video recording capabilities. I've been somewhat skeptical of the Cisco-Flip deal, but with the new campaign, Cisco looks committed to making it a success.

    2. YouTube brings ad-skipping to the web - Speaking of out-of-the-box thinking, YouTube triggered a minor stir in the online video advertising space this week by announcing a trial of "skippable pre-roll" ads. On the surface, it feels unsettling that DVR-style ad-skipping - a growing and bedeviling trend on TV - is now coming to the web. Yet as YouTube explained, there's actually ample reason and some initial data to suggest that by empowering viewers, the ads that are watched could be even more valuable.

    One thing pre-roll skipping would surely do is up the stakes for producing engaging ads that immediately capture the viewer's attention. And it would also increase the urgency for solid targeting. Done right though, I think pre-roll skipping could work quite well. At a minimum I give YouTube points for trying it out. Incidentally, others in the industry are doing other interesting things improve the engagement and effectiveness of the pre-roll. I'll have more on this in the next week or two.

    3. Watching the NY Times at 30,000 feet - Flipping channels on my seat-back video screen on a JetBlue flight from Florida earlier this week, I happened on a series of highly engaging NY Times videos: a black and white interview with Oscar-winning actor Javier Bardem, then a David Pogue demo of the Yoostar Home Greenscreen Kit and then an expose of Floyd Bennett Field, the first municipal airport in New York City. It turned out that all were running on The Travel Channel.

    Good for the NY Times. Over the past couple of years I've written often about the opportunities that broadband video opens up for newspapers and magazines to leverage their brands, advertising relationships and editorial skills into the new medium. By also running their videos on planes, the NY Times is exposing many prospective online viewers to its video content, thereby broadening what the NY Times brand stands for and likely generating subsequent traffic to its web site. That's exactly what it and other print pubs should be doing to avoid the fate of the recently-shuttered Gourmet magazine, which never fully mined the web's potential. I know I'm a broken record on this, but video producers must learn that syndicating their video as widely as possible is imperative.

    4. Nielsen forecast underscores smartphones' mobile video potential - A couple of readers pointed out that in yesterday's post, "Mobile Video Continues to Gain Traction" I missed relevant Nielsen data from just the day before. Nielsen forecasts that smartphones will be carried by more than 50% of cell phone users by 2011, totaling over 150 million people. Nielsen assumes that 60% of these smartphone owners will be watching video translating to an audience size of 90 million people. Its research also shows that 47% of users of the new Motorola Droid smartphone are watching video, vs. 40% of iPhone users. Not a huge distinction, but more evidence that the Droid and other newer smartphones are likely to increase mobile video consumption still further.

    Enjoy your weekends!

     
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  • 4 Items Worth Noting (comScore, Viral videos' formula, Netflix, VideoSchmooze) for Sept 26th Week

    Following are 4 news items worth noting from the week of Sept. 26th:

    1. Summer '09 was a blockbuster for online video - comScore released U.S. online video viewership data early this week, providing evidence of how big a blockbuster the summer months were for each metric comScore tracks. The 3 metrics that I watch most closely each month showed the healthiest gains vs. April, the last pre-summer month comScore reported. Total videos viewed in August were 25.4 billion, a 51% increase over April's 16.8 billion. The average number of videos watched per viewer was 157, up 41% from April's 111. And the average online video viewer watched 582 minutes (9.7 hours), a 51% increase from April's 385 (6.4 hours).

    Also worth noting was YouTube crossing the 10 billion videos viewed in a single month mark for the first time, maintaining a 39.6% share of the market. According to comScore's stats I've collected, YouTube has been in the 39% to 44% market share range since May '08, having increased from 16.2% in Jan '07 when comScore first started reporting. Hulu also notched a winning month. While its unique viewers fell slightly to 38.5M from 40.1M in April, its total video views increased from 396M to 488.2M, with its average viewer watching 12.7 videos for a total of 1 hour and 17 minutes. It will be very interesting to see if September's numbers hold these trends or dip back to pre-summer levels.

    2. So this is how to make funny viral branded videos - I was intrigued by a piece in ClickZ this week, "There's a Serious Business Behind Funny Viral Videos" which provided three points of view - from CollegeHumor.com, The Onion and Mekanism (a S.F.-based creative production agency) - about how to make branded content funny and then how to make it go viral. The article points out that a whole new sub-specialty has emerged to service brands looking to get noticed online with their own humorous content.

    Humor works so well because the time to hook someone into a video is no more than 2-3 seconds according to Mekanism's Tommy Means. Beyond humor, successful videos most often include stunts or cool special effects or shock value. Once produced the real trick is leveraging the right distribution network to drive viral reach. For example, Means describes a network of 100 influencers with YouTube channels who can make a video stand out. After reading the article you get the impression that there's nothing random about which funny videos get circulated; there's a lot of strategy and discipline involved behind the scenes.

    3. Wired magazine's article on Netflix is too optimistic - I've had several people forward me a link to Wired magazine's article, "Netflix Everywhere: Sorry Cable You're History" in which author Daniel Roth makes the case that by Netflix embedding its streaming video software in multiple consumer electronics devices, the company has laid the groundwork for a rash of cable cord-cutting by consumers.

    I've been bullish for sometime on Netflix's potential as an "over-the-top" video alternative. But despite all of Netflix's great progress, particularly on the device side, its Achilles' heel remains content selection for its Watch Instantly streaming feature (as an example, my wife and I have repeatedly tried to find appealing recent movies to stream, but still often end up settling for classic, but older movies like "The English Patient").

    Roth touches on this conundrum too, but in my opinion takes a far too optimistic point of view about what a deal like the one Netflix did with Starz will do to eventually give Netflix access to Hollywood's biggest and most current hits. The Hollywood windowing system is so rigid and well-protected that I've long-since concluded the only way Netflix is going to crack the system is by being willing to write big checks to Hollywood, a move that Netflix CEO is unlikely to make. The impending launch of TV Everywhere is going to create whole new issues for budding OTT players.

    Although I'm a big Netflix fan, and in fact just ordered another Roku, I'm challenged to understand how Netflix is going to solve its content selection dilemma. This is one of the topics we'll discuss at VideoNuze's CTAM Summit breakfast on Oct. 26th in Denver, which includes Roku's VP of Consumer Products Tim Twerdahl.

    4. VideoSchmooze is just 1 1/2 weeks away - Time is running out to register for the "VideoSchmooze" Broadband Video Leadership Evening, coming up on Tues, Oct 13th from 6-9pm at the Hudson Theater in NYC. We have an amazing discussion panel I'll be moderating with Dina Kaplan (blip.tv), George Kliavkoff (Hearst), Perkins Miller (NBC Sports) and Matt Strauss (Comcast). We'll be digging into all the hottest broadband and mobile video questions, with plenty of time for audience Q&A.

    Following the panel we'll have cocktails and networking with industry colleagues you'll want to meet. Registration is running very strong, with companies like Sprint, Google/YouTube, Cox, MTV, Cox, PBS, NY Times, Morgan Stanley, Hearst, Showtime, Hulu, Telemundo, Cisco, HBO, Motorola and many others all represented. Register now!

     
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  • comScore's Online Video Data Charts for Jan '07-July '09 Available for Download

    Last Thursday comScore released July 2009 data from its Video Metrix service showing record online video usage for the month. I've been charting comScore's data for 2 1/2 years, making updates each month when comScore provides new data. Today I'm offering these charts as a complimentary download (if you incorporate them into your presentations please identify comScore as the source). Here's an example slide for total online videos viewed per month:

    Not surprisingly, a number of content providers have informally told me that their internal data and what comScore reports for them doesn't neatly tie out (anyone who's ever tried to reconcile number from internal analytics, ad servers and external measurement sources can relate to these discrepancies). Nonetheless, comScore's data provides at least one consistently-measured data set on the industry, which is quite useful.

    Some of the record July numbers benefit from Michael Jackson's death and also from the lull in original TV episodes. Still, the comScore trendlines are pretty impressive. I share these charts at the beginning of presentations that I often make to industry executives to underscore broadband video's rapid growth. Some of the more noteworthy numbers that are highlighted on the slides include:

    - A near tripling of total videos viewed per month from 7.2 billion in Jan '07 to 21.4 billion in July '09.

    - A 229% increase in the average number of online videos watched per viewer per month from 59 in Jan '07 to 135 in July '09.

    - A 331% jump in the number of minutes of video watched per average viewer per month from 151 minutes (2 hours 31 minutes) in Jan '07 to 500 (8 hours 20 minutes) in July '09.

    - Looking just at YouTube, its share of all videos viewed has increased from 16.2% in Jan '07 to 41.9% in July '09. YouTube is the 800 pound gorilla of the market month in and month out. For example, in July '09, the #2 ranked video provider was Viacom Digital with 3.8% share of views, less than a tenth of YouTube's. YouTube accounts for nearly all of Google's 8.9 billion monthly views. To help put that number in perspective, it roughly equals the industry's total views in Sept '07. YouTube is also used more intensively than any other video site, with 74.1 average videos per viewer vs. #2 Viacom Digital with 19.2 average videos per viewer.

    - Hulu's monthly videos viewed have increased from 88 million in May '08 to 457 in July '09, a greater than 5x increase in just its first 15 months in existence.

    By virtually every measure the industry continues to experience rapid adoption. As I've noted before, in addition to continuing to grow viewership, the industry's key challenge is to further monetize all this video, either through advertising or paid models (subscriptions, pay-per-use or as a value add to other paid services).

    What do you think? Post a comment now.

     
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  • 4 News Items Worth Noting from the Week of July 27th

    Following are 4 news items worth noting from the week of July 27th:

    New Pew research confirms online video's growth - Pew was the latest to offer statistics confirming that online video usage continues to soar. Among the noteworthy findings: Long-form consumption is growing as 35% of respondents say they have viewed a TV show or movie online (up from 16% in '07); watching video is widely popular, draw more people (62%) than social networking (46%), downloading a podcast (19%) or using Twitter (11%); usage is up across all age groups, but still skews young with 90% of 18-29 year olds reporting they watch online vs. 27% of 65+ year olds; and convergence is happening with 23% of people who have watched online reporting they have connected their computers to their TVs.

    FreeWheel has a very good week - FreeWheel, the syndicated video ad management company I most recently wrote about here, had a very good week. On Monday, AdAge reported that YouTube has begun a test allowing select premium partners to bring their own ads into YouTube, served by FreeWheel. Then on Wednesday, blip.tv announced that it too had integrated with FreeWheel, so ads could be served for blip's producers across their entire syndication network. I caught up with FreeWheel's co-CEO Doug Knopper yesterday who added that more deals, especially with major content producers, are on the way. FreeWheel is riding the syndication wave in a big way.

    Plenty of action with CDNs - CDNs were in the news this week, as Vusion (formerly Jittr Networks) bit the dust, after going through $11 million in VC money. Elsewhere CDN Velocix (formerly CacheLogic) was acquired by Alcatel-Lucent. ALU positioned the deal as fitting with its "Application Enablement" strategy, supporting customers' needs in a "video-centric world." Limelight announced its LimelightREACH and LimelightADS services for mobile media delivery and monetization (both are based on Kiptronic, which it acquired recently). Last but not least, bellwether Akamai reported Q2 '09 earnings, that while up 5% vs. year ago, were down sequentially from Q1. Coupled with a cautious Q3 outlook, the company's stock dropped 20%.

    IAC is making big moves into online video - IAC is making no bones about its interest in online video. Last week the company unveiled Notional, a spin-out of CollegeHumor.com, to be headed by that site's former editor-in-chief Ricky Van Veen. Then this week it announced another new video venture, with NBCU's former co-entertainment head Ben Silverman. IAC chief Barry Diller seems determined to push the edge of the envelope, as IAC talks up things like multi-platform distribution and brand integration. With convergence and mobile consumption starting to take hold, the timing may finally be right for these sorts of plays. At a minimum IAC will keep things interesting for industry watchers like me.

    Click here to see an aggregation of all of the week's broadband video news

     
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  • Google is Being Clumsy in Explaining YouTube's Performance

    Yesterday's "YouTube myth busting" post on its YouTube Biz Blog had the opposite of its intended effect: rather than providing more transparency about YouTube's performance as it hoped to do, it only set off another round of frustrated posts in the blogosphere imploring Google to release actual YouTube numbers.

    The post came on the heels of last week's Q2 '09 earnings call and supplementary briefing call (transcripts here and here) which were full of optimistic, yet confusing comments about YouTube's "trajectory" from a handful of Google's senior executives.

    Here's what CFO Patrick Pichette said on the supplementary call: "I think that it is true that we are pleased with YouTube's trajectory. And in part the reason why we're communicating it to the Street is there's been so much press over the last quarter with all of these documentations of, you know, massive cost and no business models and all kind of negative press that we've read a lot about. And we just wanted to kind of reaffirm to the Street that this is a very credible business model and it's one that's got trajectory. So in that sense it's just to kind of tell everybody that we're on progress on the plan that we had made for it."

    But what plan is he referring to? In almost 3 years of owning YouTube, Google has never publicly disclosed a specific plan for YouTube or laid out its business model, so attempts at reaffirming it fall flat because there's nothing against which progress can be judged. Here are other comments, with my reactions in parentheses.

    Pichette on the earnings call: "We are really pleased both in terms of its (YouTube's) revenue growth, which is really material to YouTube and in the not long, too long distance future, we actually see a very profitable and good business for us, so from that perspective, we are really pleased with the trajectory." (WR: that sounds pretty bullish)

    Jonathan Rosenberg, SVP of Product Management on the earnings call: "I think what I said - or what I meant to say was that monetizable views have tripled in the last year and that we are monetizing billions of views every month." (WR: that sounds bullish too, but wouldn't some actual numbers really bolster this point?)

    Rosenberg on the supplementary call: "And that's part of why I think it's taken us time to kind of triangulate toward what works, and I think some of the things that we have now are still in the pretty nascent stages..." (WR: nonetheless, per earlier comment, profitability can already be forecast in the not too distant future?)

    Nikesh Arora, President of Global Sales Operations and Business Development on the earnings call: "So we are seeing significant sell-through in most of our major markets where we have YouTube homepage for sale." (WR: of what ad unit - pre-rolls or display?)

    Arora on the earnings call: "So I think the next phase of YouTube is going to be toward pre-roll video on short clips and long form video (which we are in the process of doing) various deals in, which we've announced in the past." (WR: that's new news, YouTube's spoken primarily of overlays in the past)

    Rosenberg on the supplementary call: "I would not say our overall optimism that we expressed with respect to YouTube is primarily a function of one specific format. We've actually been testing pre-rolls, I think, for quite a while. So if you interpret that one single comment to pre-rolls to imply the broad conclusion with respect to optimism on YouTube, I think that's probably a mistake." (WR: so maybe pre-rolls aren't actually the next big thing?)

    Yesterday's post: "Myth 5 YouTube is only monetizing 3-5% of the site. This oft-cited statistic is old and wrong, and continues to raise much speculation." (WR: what is the percentage then?)

    CEO Eric Schmidt on the earnings call: "The majority of YouTube views are not professional content. They are user generated content because that's the majority of what people are watching." In response to whether YouTube is able to monetize user-generated content: "Has not been our focus." (WR: again, letting us know what percentage is professional and the focus of monetization would be very helpful)

    These comments raise lots of questions about how far along Google actually is in understanding YouTube's traffic and its ability/plan to monetize it. I think Google is being clumsy in explaining YouTube's performance because it got nervous about the eye-popping estimates that have been floating around lately about how much money YouTube is losing and rushed to try to mitigate this perception, but without being ready to present real numbers as backup. Further, I don't think it rehearsed its executives very well about what to say or how to say it, so the improvised comments did not convey a clear consistent message.

    As someone who believes YouTube has enormous long-term value for Google, my advice is that its executives should just stay mum on YouTube until they're ready to make a logical case backed by facts and data. That may take longer than Google or the market hoped, allowing the rumor mill to continue to churn. But continuing to make unsupported statements will only rile YouTube followers further, and eventually sap Google's credibility.

    What do you think? Post a comment now.

     
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  • Catching Up on Last Week's Industry News

    I'm back in the saddle after an amazing 10 day trip to Israel with my family. On the assumption that I wasn't the only one who's been out of the office around the recent July 4th holiday, I've collected a batch of industry news links below so you can quickly get caught up (caveat, I'm sure I've missed some). Daily publication of VideoNuze begins again today.

    Hulu plans September bow in U.K.

    Rise of Web Video, Beyond 2-Minute Clips

    Update on New Channels

    ABC Content Now on Hulu

    Nielsen Online: Kids Flocking to the Web

    Amid Upfronts, Brands Experiment Online

    Clippz Launches Mobile Channel for White House Videos

    Prepare Yourself for iPod Video

    Study: Web Video "Protail" As Entertaining As TV

    In-Stat: 15% of Video Downloads are Legal

    Kazaa still kicking, bringing HD video to the Pre?

    Office Depot's Circuitous Route: Takes "Circular" Online, Launches "Specials" on Hulu

    Upload Videos From Your iPhone to Facebook Right Now with VideoUp

    Some Claims in YouTube lawsuit dismissed

    Concurrent, Clearleap Team on VOD, Advanced Ads

    Generating CG Video Submissions

    MJ Funeral Drives Live Video Views Online

    Qik Raises $5.5 Million

    Why Hulu Succeeded as Other Video Sites Failed

    YouTube's Pitch to Hollywood

    Invodo Secures Series B Funding

    Comcast, USOC Eye Dedicated Olympic Service in 2010

    Consumer Groups Push FTC For Broader Broadband Oversight

    Crackle to Roll Out "Peacock" Promotion

    Earlier Tests Hot Trend with "Kideos" Launch

    Mobile entertainment seeking players, payment

    Netflix Streams Into Sony Bravia HDTVs

    Akamai Announces First Quarter 2009 State of the Internet Report

    Starz to Join Comcast's On-Demand Online Test

    For ManiaTV, a Second Attempt to be the Next Viacom

    Feeling Tweety in "Web Side Story"

    Most Online Videos Found Via Blogs, Industry Report

    Cox to Turn "MyPrimeTime" Dial to 100

    How to Start a Company (and Kiss Like Angelina)

     
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  • 4 Industry Items from this Week Worth Noting

    YouTube mobile video uploads exploding; iPhones are a key contributor - The folks at YouTube revealed that in the last 6 months, uploads from mobile phones to YouTube have jumped 1,700%, while in the last week, since the new iPhone GS was released, uploads increased by 400% per day. I didn't have access to these stats when I wrote on Monday "iPhone 3GS Poised to Drive User-Generated Mobile Video," but I was glad to see some validation. The iPhone 3GS - and other smartphone devices - will further solidify YouTube as the world's central video hub. I stirred some controversy last week with my "Does It Actually Matter How Much Money YouTube is Losing?" post, yet I think the mobile video upload explosion reinforces the power of the YouTube franchise. Google will figure out how to monetize this over time; meanwhile YouTube's pervasiveness in society continues to grow.

    Nielsen study debunks mythology around teens' media usage - Nielsen released a new report this week "How Teens Use Media" which tries to correct misperceptions about teens' use of online and offline media. The report is available here. On the one hand, the report underscores prior research from Nielsen, but on the other it reveals some surprising data. For example, more than a quarter of teens read a daily newspaper? Also, 77% of teens use just one form of media at one time (note, data from 2007)? I'm not questioning the Nielsen numbers, but they do seem out of synch with everything I hear from parents of teens.

    Paid business models resurfacing - There's been a lot of talk from media executives about the revival of paid business models in the wake of the recession's ad spending slowdown and also the newspaper industry's financial calamity. For those who have been offering their content for free for so long, putting the genie back in the bottle is going to be tough. Conversely for others, like those in the cable TV industry, who have resisted releasing much content for free, their durable paid models now look even more attractive.

    Broadcast TV networks diverge on strategy - Ad Age had a good piece this week on the divergence of strategy between NBC and CBS. The former is breaking industry norms by putting Leno on at 10pm, emphasizing cable and avidly pursuing new technologies. Meanwhile CBS is focused on traditional broadcast network objectives like launching hit shows and amassing audience (though to be fair it is pursuing online distribution as well with TV.com). Both strategies make sense in the context of their respective ratings' situations. Regardless, broadcasters need to eventually figure out how to successfully transition to online distribution, something that is still unproven (as I wrote here).

     
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  • Crunching comScore's Video Data Yields Market Insights

    Last week when comScore announced data from its Video Metrix service for December '08, I made a note to myself to go back and look at all the video usage data comScore has released and see what it reveals. Below are 5 charts that I've compiled from comScore's press releases covering January 2007 - December 2008 (note comScore didn't report on every single month during this 24 month period so there are some holes in the graphs).

    The first graph shows the growth in total videos viewed per month, roughly doubling from 7.2 billion views in Jan. '07 to 14.3 billion views in Dec. '08.

     

    That growth is driven by a number of factors including an increase in the number of monthly viewers from 123 million in Jan. '07 (70% of U.S. Internet users) to 150 million in Dec. '08 (78.5% of U.S. Internet users).

     

    It also reflects an increase in the number of videos viewed per viewer from 59 in Jan. '07 to 96 in Dec. '08.

     

    Which further translates into the growth of total number of minutes the average viewer watched per month from 151 minutes per month in Jan. '07 to 309 minutes per month in Dec. '08.

    Aside from the sheer growth of the market over the last two years, the most striking thing about the comScore data is the growth in usage and market share by YouTube. Back in Jan. '07, YouTube generated approximately 1.2 billion video views per month for a 16.2% share of all videos viewed. Two years later in Dec. '08 YouTube generated approximately 5.9 billion video views per month for a 41.2% market share. YouTube's share growth is staggering: in every month but 1 during this period YouTube increased its sequential monthly views and in all but 3 months it increased its sequential monthly market share.

     

    Recall that Google closed on the YouTube acquisition in Nov. '06 and at $1.65 billion, many thought Google had grossly overpaid. Some may still believe this as YouTube is still very much a work in progress in terms of how it generates revenue. But there's no questioning the phenomenal two-year run it has had in terms of its usage and market share growth. This is one of the reasons why I continue to believe YouTube is one of the most powerful platforms for eventually disrupting the traditional video distribution value chain.

    If these slides are hard to view, I've uploaded them all to SlideShare.

    What do you think? Post a comment now.

     
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  • Truveo Helps Clear Video Search Fog with New Study

    A couple of days ago, Truveo, the big video search engine owned by AOL, released the results of an internal study which concluded that it provides the most comprehensive search results among 5 companies considered. Before you say, "Duh, Will, what else would you have expected Truveo to conclude?!" it's worth spending a few minutes considering the study's methodology, results and implications. Video search is an extremely strategic space, so all credible data has value.

    When it comes to search, there are really two key criteria to judge quality - coverage and relevancy. A search engine can return a million results, but if none are relevant, it's pointless. Conversely, just one spot-on result and you'll rejoice, but you still may yearn for additional, relevant options (since video quality can vary, links may be broken, the user experience at certain sites may stink, etc.). So optimizing both coverage and relevancy must be the goal.

    In Truveo's study, it has focused solely on coverage, having deemed relevancy too subjective to credibly measure. To quantify coverage from a competitive standpoint, it chose 4 other search engines, Blinkx, Microsoft Live Video Search, Google Video and Yahoo Video. This limited pool immediately begs the question how the many other video search companies not included would have fared. Truveo explained that the testing was very resource-intensive, so they needed to keep the competitive set relatively small.

    To measure coverage, Truveo selected 100 top-ranked Alexa sites across 5 categories: news, sports, TV, music and movies. Then they found 10 representative videos from each and ran a query for those videos - using the exact title the site used - on each of the 5 search engines. Scoring was binary - a search engine got a 1 if they returned an accurate result for at least 5 of the 10 queries, a zero if they didn't. Final score from this process, Truveo 86, Blinkx 20, Microsoft Live Video Search 17, Google Video 3, and Yahoo 2.

    Having reviewed the test's full methodology and spoken to a Truveo representative, I think for the most part their approach is pretty fair. An obvious limitation is that lots of video search engines (or web search engines like Google) weren't evaluated so the study is by no means conclusive. Further, only premium sites were included (i.e. no UGC, and actually very little indie video either), so one wonders how the results would have changed if sites like Break.com, Heavy and others were also tested. And then there's the small matter of YouTube, the market's 800 pound gorilla, not being included at all. Since for many users video search begins and ends with YouTube, its omission raises a question about just how reflective these results are of real-world user behavior.

    Nonetheless, Truveo gets points in my book for shedding further light on a very confusing subject, and also constructing a relatively objective methodology that can be used by others (in fact Truveo is encouraging independent 3rd parties to undertake more testing of this kind).

    Video search is one of the most intellectually challenging areas of the broadband video ecosystem, yet as Truveo asserts, there is surprisingly little evaluative data out there. From my standpoint, more data means more informed market participants and therefore continually improving user experiences. That benefits everyone in the broadband ecosystem.

    What do you think? Post a comment now.

    (Note, the complete methodology can be requested by emailing Josh Weinberg at jweinbergATtruveo.com)

     
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  • New Magid Survey: Short-Form Dominates Online Video Consumption and Hurts TV Viewership

    Survey results being released this morning by Frank N. Magid Associates, a research consultancy, and video aggregator Metacafe provide fresh evidence that short-form video dominates online video consumption. Notably, the survey also goes a step further, finding that 28% of respondents who watch online video report watching less TV as a result.

    Meanwhile though, on the same day earlier this week that I was talking to Mike Vorhaus, managing director at Magid, and Erick Hachenburg, CEO of Metacafe about this new survey, Mediaweek was reporting a separate Magid survey, commissioned by CBS, which found that "35% of the nearly 50,000 streamers surveyed...reported that they are more likely to view shows on the network as a result of having been exposed to content on the web."

    As I learned from Mike, there's no actual contradiction in these 2 surveys' findings, but you do have to squint your eyes a bit to make sure you're understanding the data accurately.

    First, the findings on short-form's domination. The Metacafe survey asked respondents about the most commonly viewed types of video and presented them with category choices. The top 5 selected were all short-form oriented: Comedy/jokes/bloopers (37%), music videos (36%), videos shot and uploaded by consumers (33%), news stories (31%) and movie previews (28%). TV shows comes in at #6 (25%), followed by more short-form categories of weather, TV clips and sports clips.

    That short-form, snackable video dominates is not really a huge surprise, given YouTube's market share and the preponderance of virally shared clips. Yet Mike emphasized that short-form does not equal UGC, a point that Erick also highlights. Rather, Mike sees short-form as a legitimate alternative entertainment format that creatives are embracing and audiences are adopting. It is causing further audience fragmentation resulting in the TV audience erosion that the survey also uncovered.

    Which of course begs how Magid's CBS survey data squares up. Mike explained that the key here is that the CBS survey is based solely on users of CBS.com. These people naturally have a greater affinity for CBS programming and their likelihood of watching CBS shows on TV will be far higher than randomly-selected audiences (such as in the Metacafe survey). Here's the CBS press release for more details.

    So the CBS data suggests that networks should be encouraged that streaming their shows builds loyalty and broadcast viewership, and therefore that they should keep on doing it. Nevertheless they need to be mindful that their shows now compete in a far larger universe of video choices, and that short-form - as a new genre - is something they too should be looking to exploit. Appropriately, all the networks, and many studios, are doing exactly that.

    There is no shortage of research concerning consumer media behavior floating around these days. As the two Magid surveys show, superficially data may appear to be conflicting, though in reality it is not. Observers need to make sure they're digging in, and taking away the right lessons.

    What do you think? Post a comment now!

     
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  • The Incredibly Growing YouTube

    Closing out the week, I missed this blurb from Information Week yesterday reporting YouTube's staggering dominance of broadband video traffic. New numbers out from Hitwise show that in May '08 YouTube garnered 75% of the 10 million visits to 63 video sites that Hitwise is tracking. That's 9 times the traffic of #2 MySpaceTV and more than 20 times that of the #3 site which is Google's other video property (remember it?)

    According to Hitwise YouTube's share rose 26% from a year ago compared with drops by all the others in the top 5 sites except Veoh, which rose by 32% from a year ago.

    It's just mind-boggling to think that one site could have such market share, particularly when a lot of the networks' programs cannot be found there. I think it speaks to how strong users' appetites are for UGC and viral content remain, how YouTube has become a de facto video platform for lots of smaller players in the industry (and consumers) and how the company is likely beginning to enjoy some early success with its partners' channels.

    A few months ago, in "YouTube: Over-the-Top's Best Friend" I wrote that YouTube is quickly becoming the perfect ally for all those makers of new broadband-to-the-TV devices. These companies desperately need content and credible brands to help pull through consumer demand. YouTube offers both. In this sense, YouTube has huge value yet to be tapped (of course demonstrating that it can monetize its massive audience wouldn't hurt its partnership value...)

    However, looked at another way, YouTube's success should be very encouraging to other players. To start with, YouTube is doing a marvelous job educating the world about the virtues of broadband video. And while YouTube is the market's 800 pound gorilla, it is still leaving key opportunities open for other players to differentiate themselves. Potential areas include high-quality delivery, ad-based and paid monetization and offering content that YouTube simply doesn't have (examples: Comedy Central programs like "The Daily Show" and "Colbert Report")

    Volumes are yet to be written about YouTube. Whether it turns its market-leading traffic into a financially-explosive franchise or forever remains a red-ink spewing blip on Google's P&L is yet to be seen. Either way, when the history of broadband video is written, YouTube will be featured prominently.

     
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  • The Reality of Web Video Advertising Just Doesn't Seem to Add Up

    Today's post is from TDG's Mugs Buckley, who discusses the confusing state of video advertising projections.

    The Reality of Web Video Advertising Just Doesn't Seem to Add Up

    by: Mugs Buckley, Contributing Analyst, The Diffusion Group

    I used to think I was pretty good at math, but after trying to make sense of recent forecasts regarding web video advertising, I'm beginning to doubt my skills. Let it be known that I'm a big believer in the growth potential of the Internet video ad business; I'm simply struggling to follow the numbers that have been reported. Since no single analysis offers an "apples-to-apples" industry comparison, I thought I'd offer up some of the available forecasts and offer a few thoughts.

    So here's where I'm stuck.

    The estimates and forecasts for only video ads are all over the place. For example:

    • eMarketer estimates that US marketers spent $775M in 2007 and will spend $1.3B in 2008 for online video streaming and in-page ads.
    • Jupiter Research predicts that 2008 online video ads in the US will yield $768M.
    • comScore reported that online viewers consumed 9.8B videos in January 2008 (down from December 2007's 10.1B) of which 3.4B were Google/YouTube videos.
    • In a November 2007 Financial Times article, a leading media buyer for Starcom Media Group (who is well aware of her buys and rates) predicted that the 2007 market for "The Big Four" broadcast networks was likely to generate around $120M.

    So here's where it gets a bit confusing.

    • If we use the 3.4B monthly view Google/YouTube view estimate for January and run that out for a 12-month period, add some growth for fun, we come up with about 45B views for all of 2008.
    • YouTube charges $15 CPMs for their in-video overlay ads (down from the initial $20 CPMs used during beta testing).
    • If 100% of the 45B Google/YouTube videos were sold at $15 CPMs, that would yield revenue of $675M. But that assumes 100% inventory sold, which won't happen for a variety for reasons (in particular because YouTube only sells overly ads on their contracted partner deals, not user-generated content).
    • According to Bear Stearns, YouTube is set to generate $22.6M in revenue for video ads, about 3.3% of the possible $675M at 100% inventory sold.

    Hmmm. So if YouTube (at 34% of all web video consumed) could generate $22.6M in revenue in 2008, and the Big Four were running about $120M in 2007, how does one arrive at these impressive near-billion dollar predictions? Where else is this revenue coming from?

    Let's not rule out operator error - I'll quickly admit that I may have misinterpreted how these numbers were derived and what they represent. That being said, however, there doesn't seem to be a rational way to reconcile these disparate estimates. Can anyone out there help to square these numbers? Is it simply a matter of under- or over-reporting? Are the measurement systems currently in place so poor and mutually exclusive in methodology that they necessarily offer conflicting estimates?

    Something just isn't adding up. Yes, this may seem to be a bit nit-picky on my part; the rambling of an analyst with too much time on her hands. Then again, without accurate revenue and usage estimates, it is impossible to know the real value of any form of advertising, much less an emerging model such as web-based video advertising.

    Please let us know what you think!

     
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  • Survey Says Broadband To Lag TV in 2012. Forget About It.

    This piece in today's Hollywood Reporter about a newly-released survey ("Broadband Won't Overtake TV, Execs Say") caught my eye because it continues a highly speculative, and largely irrelevant debate pervasive throughout the industry about future video consumption patterns.

    Why's the debate highly speculative? Because truly, none of us has any idea how people will consume video in 2012. There are just too many variables and too many unknowns to make an accurate prediction. Here's a point of comparison: let's say 5 years ago, in 2002, you were asked what percentage of Americans would consume broadband video in a given month? How many (or few!) of us would have predicted a whopping 75%? (the correct answer according to comScore in July '07). Better yet, how many of us would have guessed that over 25% of this consumption would be at just one site (YouTube) - a site that didn't even exist in 2002? Given these examples, who's to predict what 2012 will bring?

    And why's the debate largely irrelevant?

    Read on by clicking here...

     
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  • Survey: Broadband To Lag TV in 2012. Forget It.

    This piece in today's Hollywood Reporter about a newly-released survey ("Broadband Won't Overtake TV, Execs Say") caught my eye because it continues a highly speculative, and largely irrelevant debate pervasive throughout the industry about future video consumption patterns.

    Why's the debate highly speculative? Because truly, none of us has any idea how people will consume video in 2012. There are just too many variables and too many unknowns to make an accurate prediction. Here's a point of comparison: let's say 5 years ago, in 2002, you were asked what percentage of Americans would consume broadband video in a given month? How many (or few!) of us would have predicted a whopping 75%? (the correct answer according to comScore in July '07). Better yet, how many of us would have guessed that over 25% of this consumption would be at just one site (YouTube) - a site that didn't even exist in 2002? Given these examples, who's to predict what 2012 will bring?

    And why's the debate largely irrelevant? Because, in my opinion, it presupposes a continuation of the existing paradigm: an either/or choice of TV consumption OR broadband consumption. Yet these traditional lines of demarcation are already fading. Broadband programming is starting to migrate to networks, as in the recent case of Quarterlife's move from MySpace to NBC, while at the same time network TV programming is increasingly being consumed online. Meanwhile shorter form programming, not bound by traditional advertising pods is on the rise, further confusing industry definitions. Sites like Metacafe, blip.tv, Veoh and others are driving a whole new category of video that could eventually be a more popular format than 30 or 60 minute programs.

    These days consumers themselves are driving this "broadband or TV" debate into irrelevance. They're busy accessing programming on demand - whether "broadband" or "TV" - through a host of devices and services whose popularity is only going to skyrocket in the future. These include TiVo, Xbox, Netflix, Amazon Unbox and many others. Yet traditional thinking is still pervasive. For example, just this week, the chairman of the FCC has attempted to enact new regulations governing how cable programming might be unbundled. Fortunately this initiative collapsed, but take heed, market forces will eventually cause cable operators to offer programming as consumers want it, not how tradition dictates.

    I think Jim Denney, a TiVo product management VP whom I spoke with yesterday hit the nail on the head. Jim said TiVo's philosophy is to have their users "not worry about where any particular video's coming from, but rather just have all choices easily available." That strikes me as a winning business approach for the turbulent and converging 5 years that lie ahead. In my view, those companies which think about how to deliver value to consumers on their terms, rather than being guided by increasingly artificial distinctions, will be the ones to emerge as the winners in 2012.

     
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