The Unifying TV Landscape: FreeWheel Video Monetization Report: Q1 2017
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Ying Wang
By Ying Wang,
Director, Advisory Services,
FreeWheel

As we turned the corner into 2017, one thing became clear: the industry has never been closer to true unification in premium video than it is now.

The FreeWheel Video Monetization Report: Q1 2017 highlights how the boundaries between what we consider “traditional TV” and digital video are dissolving, and that at the end of the day, it’s all just video. Live and full-episode TV-quality content grew at double-digit rates across the board and nearly half of all digital video consumption occurs on the big screen. New MVPD subscription models are emerging. Viewers have high expectations around all components of the premium content experience, and publishers and advertisers alike are recognizing that cooperation will be crucial in driving the industry forward.

Here are a few trends we observed in this quarter’s report to highlight.

The New Living Room Continues to Entice Viewers

Over the past several quarters, monetization on OTT devices and STB VOD has continued to grow. The first quarter of 2017 marks an important milestone: the first time another device eclipsed monetization on desktop, with OTT taking the lead at 32% share vs. desktop’s 31%. As James Rooke, GM, Publisher Platform, said at VideoNuze’s Online Video Advertising Summit during his presentation of this report on June 14, “There’s incredible growth to be had in OTT and STB VOD.” Indeed, users want the same comfortable experience when streaming content as they do watching traditional television, and technology has evolved to make that possible. When paired with the similar lean-back experience provided by STB VOD, 48% of premium video ad views take place in the new living room. As viewers gravitate to the largest screen available to watch their favorite shows, OTT holds tremendous untapped opportunity. Our team will continue to expand on this topic over the coming months.

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All Eyes on Live

There is perhaps no greater evidence of the unification of premium video than the phenomenal growth in live and full-episode content viewing. The industry continues to invest in live streamed content that mirrors the linear television feed, as evidenced by the +47% YOY growth observed in Q1. Sports has historically dominated live content, but news is emerging as an important driver of live viewing—likely as a result of today’s political climate.

Live content in Europe, practically non-existent in the past, has finally emerged in the market, reflected by constituting a 4% share of ad views and +117% YOY growth. This shows that broadcasters across the pond are beginning to experiment with monetizing live programs—and there’s plenty of room for forward progression.

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How Good is Your Ad Experience?

For better or worse, an ad experience is subject to the timeless principle of ergonomics: do it well, and the seamless experience will feel natural to the point where it almost goes unnoticed. Do it poorly, and viewers will hardly notice anything else. This Q1 report takes a look at how publishers are increasingly putting the viewer first by ensuring premium, linear quality ad experiences via three core metrics:

Ad Engagement: Premium video continues to stand out as a means of reaching an engaged audience, as nearly 100% of mid-roll ads were viewed to completion once started.

Ad Fatigue: Publishers remain focused on balancing monetization and user experience, as the report shows the average number of ads per mid-roll break in full-episodes remaining at ~4. However, as ad loads are very similar across device types, publishers should recognize the opportunity to customize the ad experience to the device for further improvements.

Ad Repetition: We’ve all been there– streaming a great show and seeing the same ad over and over again. Good news: our data shows that the industry is increasingly focused on this issue, as 77% of creatives in full-episodes and 62% in live streams did not repeat within a stream. There’s undoubtedly still work to be done, especially in live environments, but it’s clear that both advertisers and publishers are committed making improvements to ensure a positive viewing experience.

In order to achieve a better ad experience, publishers should think about ways to offer more differentiated ad experiences and innovative executions, which are proactively monitored and enforced.

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Expanded European Analysis

As FreeWheel continues to serve more and more international publishers, we’ve expanded our analysis in this quarter’s report to illuminate additional advancements taking place in our biggest market abroad – Europe. Perhaps most telling is the remarkable 79% YOY video start growth in Europe; however, ad views grew at just +17%, indicating a significant opportunity for monetization growth in the European market.

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The above is a mere fraction of the analysis contained in the VMR: Q1 2017. Download the report for the full breadth of our unparalleled data and insights comprised of over 200 billion video starts in 2016 and 59 billion video starts for Q1 2017.

Special thanks to Jeremy Scher for his contribution to this post.

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