Premium Video: A Bundle of Growth
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This quarter the Video Monetization Report (VMR) is presented as a synopsis of the key trends that contributed to a strong third quarter for premium video as we moved from the summer into the fall viewing season. Accompanying this synopsis is the full VMR quarterly data set, which has become the barometer for the industry. Moving forward we will bring you richer reports twice per year (in March and September) while continuing to provide data every quarter.

In Q3 2018, multichannel video programming distributor (MVPD) IP-enabled platform ad views grew 87% year-over-year, helping propel the full U.S. market to grow 26%. Europe also saw solid ad view growth of 19% despite some U.S. based publishers acting cautiously in light of GDPR. We examine these and other quarterly trends in this blog, enjoy the read!

 

Full VMR data can be found here (report will open in a new tab)

MVPDs Drive Premium Video Growth in the U.S.                       

Publishers, operators and the supporting ecosystem enabled more content via MVPD IP-enabled platforms and set-top-boxes, as well as through aggregator portals, to drive growth in Q3 2018. Syndicated ad views comprised 40% of all ad views and grew by 31%, outstripping the growth of ad views on owned and operated (O&O) platforms.   

Taking a closer look at syndication, MVPD IP-delivered ad views have scaled rapidly, with a growth rate of 87% YOY. The offerings of traditional cable companies are eclipsed by virtual MVPD ‘skinny bundles’, which make up 83% of MVPD IP-delivered ad views and grew at 103%, more than double the rate of traditional MVPD offerings.

Live content tends to over-index on MVPD platforms and constituted 59% of total ad views, versus a 33% share across all platforms. 67% of total MVPD IP-enabled viewing is via over-the-top (OTT) devices, which is exactly the kind of lean-back and engaged viewing advertisers are seeking. The smartphone accounts for 68% of long-form MVPD-syndicated ad views, further emphasizing the device’s versatility and ubiquity.

Live content ad views grew strongly year-over-year, even though they garnered a slightly smaller share than previous quarters due to fewer marquee sporting events like the Super Bowl. Ad views against clips declined by 20% despite clip video views continuing to grow, suggesting moves by inventory owners to limit the amount of ads placed against short-form content.

Smartphone and OTT device growth outstripped all other devices at 63% and 45% respectively, marking them out as the platforms viewers are trending towards. The combined ad view share of both devices now makes up 60% of all ad views.

 

Full VMR data can be found here (report will open in a new tab)

Continued European Growth in Light of GDPR

Europe saw strong double-digit growth in Q3 with ad views up 19% and video views increasing 11%. However, post GDPR, U.S. publishers have sought to protect themselves from reputational and legal risk by limiting their distribution efforts in Europe for the time being.  European-based publishers and operators have dedicated greater resources to being GDPR ready, supporting overall market growth.

Monetization of live content saw the largest boost as premium publishers tapped into new revenue sources on their O&O content across all devices, +44% year-over-year.  Live content saw a boost this quarter as a result of the final stages of the FIFA World Cup playing out at the start of Q3. Full-episode content continued to dominate the market across all devices in Europe and grew +17%. Nonetheless, clips’ ad views increased in volume and remain an important part of the monetization mix, +5% year-over-year, as premium publishers leveraged partnerships with regional newspapers and portals to extend reach in Europe. 

Europe remains a highly fragmented market with high growth in ad views seen for both OTT devices and smartphones and a further squeeze on desktop share. The big screen (OTT and STB combined) is growing as the top medium for engaging audiences at scale and as a result achieved a combined share of 34%.

Be on the lookout for the FreeWheel VMR: Q4 2018 which will take a comprehensive look back at the whole of 2018, laying out the key events and trends that defined the year. We look forward to bringing you these insights and more as we move into 2019.

Authors: Hasan Iqbal, Rebecca Rangeley, Esra Akturk, Xu Yao, Haley Glazer

Note: there was a data correction to ‘chart 1 – Top Line Growth and Break-Out of Ad Views by Syndication Platform, U.S.’ on Tuesday, January 8, 2019

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