A Closer Look at the Q4 VMR: Secondary Sales Channels and Programmer Inventory
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Dasha Pryamitsyna
By Dasha Pryamitsyna,
Associate, Advisory Services,
FreeWheel

Every quarter in the Video Monetization Report we deliver new and impactful insights that highlight the trends driving the premium video economy. The dataset for this report is unparalleled and one of the largest available on the usage and monetization of professional, rights-managed video content comprised of over 160 billion video views in 2015.

Now that the Q4 Video Monetization Report has been released, we wanted to take a deeper dive into one of our analyses. Here’s a closer look at the secondary sales channels Programmers utilize to monetize their valuable inventory and categorize those channels according to their function.

What we found was in line with trends we have seen across the past three years – while Programmers allocate the vast majority of their inventory to direct-sold channels, monetizing it across their owned and operated properties and through syndication, they do utilize secondary markets or third party monetization platforms in some cases [see chart 1].

Historically, Q1 is the most challenging for broadcasters to monetize due to the pattern of slow sell-through at the beginning of every calendar year, leading them to leverage third party monetization more heavily. Conversely, Q4 is historically light for secondary sales partners as buyers and sellers jockey to reach year-end budgets. This is new analyses, not included in the Q4 VMR.

Q4_VMR_Secondary_Markets

Chart 1: click to enlarge

Nevertheless, while 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% year-over-year [see chart 2]. Furthermore, while the top line aggregated number remained small across all premium Publishers, we did see some select Programmers utilizing secondary markets more aggressively.

8203-FW-Q42015-Chart15

Chart 2: click to enlarge

Further illuminating the players driving these trends, we categorized the multitude of possible “monetization” partners and platforms for content providers to choose from into three broad groups:

  • Exchanges are open and private markets for buyers and sellers to trade across with varying degrees of automation.
  • Platform Partners are a mix of Demand Side Platforms (DSPs) and Supply-Side Platforms (SSPs), which provide technology and tools to enable automated. transactions
  • Ad Networks and Syndication Partners provide additional sales distribution channels for Programmers to fill inventory.

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 Content Owners.

Defining monetization partners by role aligns with FreeWheel’s 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. And further, this also highlights the importance for Programmers to utilize technology-based 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.

Related Reading: See FreeWheel Co-Founder and Co-CEO Jon Heller’s six questions Publishers and Marketers must ask when considering a programmatic strategy in this AdExchanger column, “In Nascent Programmatic TV And Video Market, Beware Of Faulty Transaction Models”

Questions about this data? Feel free to reach out to us with further inquiries. If you haven’t had a chance to do so already, please download the entire Q4 Video Monetization Report which highlights the changing dynamics of how enterprise-class content owners and distributors are monetizing premium digital video content.

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