Context is King: How Videos Are Found And Consumed Online

Editor’s note: This is the third in a series of posts by guest writer Ashkan Karbasfrooshan.Previously, he wrote about the State of Online Video, and 12 Surprising Things Holding Back Online Video Advertising.  In part 3 today, he examines how videos are found and consumed online. Karbasfrooshan is the founder and CEO of WatchMojo , a producer of premium, informative and entertaining video content. The company’s catalog of 5,000 videos has generated over 110 million streams since 2006.

To try to understand—let alone guess—the future of video advertising, one needs to start by looking at the biggest trend in media over the past few decades.  In November 2006, Bear Stearns Cable and Satellite analyst Spencer Wang published a study called “Why Aggregation & Context and Not (Necessarily) Content are King in Entertainment”.  While Bear Stearns has since beenacquired by JP Morgan and is now a mere footnote in business books, the study’s findings are more relevant than ever.  Let’s examine 8 key factors behind online video consumption

Factor 1: Media is Fragmenting

According to a recent NY Times article, in the 1952-53 season, more than 30% of American households watched NBC during prime time, according to Nielsen.  In fact, up until twenty years ago, you could buy a 30-second spot on CBS, NBC or ABC and reach “everyone.”  Today, NBC’s prime time reach is 5%.  Sure, NBC is lagging CBS and ABC, but neither the Tiffany network nor Disney’s counterpart is faring much better.  The secret’s out: fewer people watch TV and teenagers spend every waking minute connected to the Internet, increasingly through the mobile web.

Some of the recent numbers being put up by live video events on the Web are giving TV a run for its money. Take for example the New Moon Premiere, which attracted 3 million viewers in total, a U2 concert on YouTube that reached 10 million, and the red carpet event for This Is It, which saw 1.8 million tune in.

Today, we have yet another big number to share, this time from last night’s Ustream (ustream) premiere of 50 Cent’s movie “Before I Self Destruct.” In total, more than 255,000 users watched at least part of the 90 minute screening, which included the hip hop mogul answering questions live from fans.

Although not as huge as some of the other events, it’s perhaps more significant. As opposed to debuting the movie on MTV, VH1, or BET, 50 took to the Web and reached an audience of comparable scale to what he might have found on TV. Granted, he’ll still use other mediums for promotion, but in light of his numbers and those of others, expect a lot more events like the Self Destruct premiere in the near future.

That’s not to say the Internet is going to be as destructive to television as it’s been to print media, but we’re certainly starting to see it emerge as a strong compliment, if not competitor, to more traditional means of video distribution. We knew this was coming, but a combination of bandwidth proliferation and integration with social sites seems to be pushing live video to a tipping point. And where 50 goes, the money typically follows.

via 50 Cent Symbolizes the Impending Live Video Explosion.

Jaroo.com is hoping to become the ultimate online video destination for kids. Launching with more than 50 popular TV series, and some 500 episodes available on demand, this kids-friendly service is hoping to stake a claim to the 9.5 percent of U.S. Internet users age 11 and younger in the U.S. Those Internet users are spending 63 percent more time online than they did four years ago, some 11 hours per month, according to Nielsen NetView.

Jaroo–from Canadian company Cookie Jar Entertainment–will feature 22-minute episodes–with 90-second commercial breaks–of “Inspector Gadget,” “The Adventures of Paddington Bear,” “Johnny Test,” “Super Mario Bros.,” “Zelda” and “Madeline” as well as the exclusive U.S. premiere of “Mona the Vampire.” Cookie Jar said it will add new episodes and shows daily.

Jaroo.com initially will pull from CJ’s library of 6,000+ episodes, and plans to add programming from other TV distributors, as well as original made-for-the-Web content.

“What makes Jaroo.com truly special is the breadth of popular kids shows available in a single one-stop location,” said Kevin Blocker, Senior VP of digital media at Cookie Jar. “The site was specially designed to be easily navigated and hosted in a kid-safe, kid-friendly environment.”

via Jaroo.com – a Hulu for kids – debuts – FierceOnlineVideo.

Another month, another record. September saw more than 168 million U.S. Internet viewers watch some 26 billion videos, more than 40 percent of them on Google sites. That’s a whopping 10.4 billion video views–nearly all of them (about 99 percent)–on YouTube, reports comScore.

If you’re wondering, 168 million goes into 26 billion about 154 times, which averages out to a 5.13 video views every day per viewer. In August 161 million unique viewers in the U.S. watched 25.6 billion online videos, and those both were record performances for the industry. Microsoft sites, which finished in second place in August, slipped to sixth place in September, behind Google, Hulu, Fox Interactive Media, Viacom Digital, and Yahoo! sites.

Google viewers watched the most videos per viewer, 82.7, followed by Fox with 9.4 videos per viewer. In September, comScore says, nearly 85 percent of the total U.S. Internet audience viewed online video, and they watched it for about 9.8 hours. The average online video length? About 3.8 minutes.

via September is another record month for online views – FierceOnlineVideo.

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• Google and YouTube Now Serving 10 Billion Videos Per Month (mashable.com)
• Boy, We Watch a Boat Load of Video (marketingpilgrim.com)

When your website first reaches a million visitors, it’s a great milestone. However, one billion views per day can only be attained by the selected few, and YouTube is now one of them.

According to the official blog, YouTubeYouTubeYouTube is serving “well over a billion views a day”. That’s at least 11,574 views per second, 694,444 views per minute, and 416,666,667 views per hour. Imagine the web server farm that can withstand that much traffic, and then remember that YouTube is just one of Google’sGoogleGoogle many properties.

As we wrote earlier this week, YouTube still may not be making enough money to justify the 1.65 billion dollars Google has paid for it, but it definitely makes it up when it comes to visitors.

To celebrate the occasion, YouTube has a special logo today, accompanied with the text “1 billion views per day”. Yes, they’re bragging, but one has to admit they have a lot to brag about.

via YouTube Reaches One Billion Views Per Day.

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• YouTube’s New Logo Shouts From The Rooftops: ‘1 Billion Views Per Day!’ (techcrunch.com)
• YouTube hits one billion views a day (telegraph.co.uk)

Obama’s Long Primary Season Prepped Him for the Win

Barack Obama beat John McCain by a narrow margin in the popular vote and a hearty margin in the electoral college. But what about the online video vote, where it all comes down to the number of views? There the margin was somewhere in between, with Obama pulling in nearly 900 million views compared to McCain’s 550 million.

That’s according to divinity Metrics, a video analytics startup that measures the spread of videos for marketers and content producers. CEO Rajeev Kadam noted that Obama’s video view lead was built up, in part, by the long Democratic primary race, where he was fighting Hillary Clinton in person and on the web while McCain sat pretty as his party’s chosen candidate. (Sorry, but you’ll have to click on the graphs above to see them in full size; they’re too wide for our column.)

The firm measured views across more than 200 video sites dating to July 2007, finding 64,092 total videos related to McCain and 104,456 total videos related to Obama. McCain’s campaign posted 376 videos and Obama posted 1,982 videos. The biggest viewership peaks for both appear to be around the time the Dow plummeted, in the thick of the election.

The popularity of online video services has grown significantly with women and adults over age 35 in the past six months, and is helping close the age and gender gap in the online video audience in the US. Since late 2007, the percentage of female internet users ages 12+ who have streamed a video online in the past 30 days has grown from 45% to 54% – an all-time high for this demographic that is nearly equal to the percentage of men (58%) who have recently streamed video content. The percentage of adults age 35-54 who have recently streamed video online has also risen from 49% to 60% since December 2007, according to recent research from Ipsos.

A recent study by The Nielsen Company, showing US video and TV usage across three screens, Television, Internet and Mobile devices, reports that screen time of the average American continues to increase, with TV users watching more TV than ever before, while also spending 9% more time using the Internet from last year.

At the same time, a small but growing number of Internet and mobile phone users are watching video online, as well as using their cell phones to watch video.
As of May 2008, more than 65% of U.S. homes receive digital cable and satellite combined. These digital TV homes receive nearly 160 channels. In addition, 25% and 35% of U.S. homes have DVR and Video on Demand respectively.

divinity Metrics has launched a weekly chart that tracks not only the views of online video from 20 top US brands but also the ‘health’ of them. By using VMI – Video Marketing Index, dM ranks the validity of each video for its marketing value by analyzing the video’s views, comments, ratings and other consumer reactive data points.

You can check out the latest chart here – divinity Metrics Brand20 Index

By Mark Levy CEO of MaxxoMedia

About 10 years ago, I was running a small Internet development firm in Santa Monica, CA. We produced a number of the early movie and TV show websites for the studios. We could tell then viewing of video online would be huge as soon as bandwidth opened up. Back then, people would download a 30 megabyte QT video file that portrayed a postage stamp sized, two-minute long video through their 14.4 baud dial-up modem. For some it would take hours to download; people left their computers on overnight. Well, times have certainly changed.

Today bandwidth runs like water through the tap, and watching TV and user-generated video online is getting bigger and bigger each month. A recently released Digital Life America study says that nearly 80 million Americans (43% of the online population) have watched one of their favorite TV shows on the Internet. That number is up significantly from 12 months ago when that figure was just 25%.

According to the Pew Internet & American Life Project, 48% of internet users have been to video-sharing sites such as YouTube, and the daily traffic to such sites on a typical day has doubled in the past year. The basic findings in a national phone survey show:

• In December 2006, 33% of internet users said they had ever visited such sites. That represents growth of more than 45% year-to-year.
• 15% of respondents said they had used a video-sharing site the day before they were contacted for the survey. A year ago, only 8% had visited such a site the previous day.

Though YouTube usage generally increased in 2007, according to Harris Interactive, reports eMarketer, a solid majority of YouTube users surveyed said they had visited only once or a few times.David Hallerman, senior analyst at eMarketer, concluded “The fact that younger Internet users are far more likely to be regular visitors to video-sharing sites points to a fork in the road… marketers looking to target the under-30 demographic can more reliably find them on these video sites… (while) TV broadcast and cable networks… (can) bulk up their online offerings…”

View PDF of report here.

From Kenradio.com

61% high speed Internet users watch/download online video content at least once a week and 86% do so on a monthly basis, compared to 45% and 71%, respectively, in the 2006 study, according to a new study by Horowitz Associates. News and user-generated, non-professional content are the most often viewed genres, followed by movie previews/trailers, music videos, and previews/segments of TV shows. Weekly viewing of full episodes of television shows doubled from last year, with 16% of high speed Internet users watching TV online on a weekly basis.

NBC and ABC are the networks Internet users mention the most frequently for online TV content, with Grey’s Anatomy being the most often mentioned TV program viewed online. While consumption of broadband video has grown, the study shows that television is still the preferred platform for traditional TV content. The vast majority (70%) of Internet users who watch TV online say do so because they missed the episode on TV. 18% of these respondents say they watch TV shows online to watch them a second time (after having watched them on TV), or that they watch TV shows online just when they happen to find them or when someone else tells them about them (20%). Conversely, 13% Internet users who watch TV shows online say they watch them directly online, and not on regular TV.

Penetration of video-enabled handheld devices is on the rise; concomitantly, so is viewing of video content on these devices. 27% of Internet users have a cell, iPod/MP3 player, or PDA with video capability, and an additional 23% do not have this capability but are interested in getting it. Among those with video-enabled handheld devices, 35% watch video on their devices at least weekly and 62% do so at least monthly, translating to 18% of Internet users overall who watch video content on a handheld device at least monthly. This figure is up from 8% just one year ago.

There is a dynamic relationship between broadband access, broadband content and broadband consumption. More and better broadband content, particularly entertainment content in video form is bringing more consumers to the platform, either on their computers or on their handheld devices. This, in turn, creates an even greater demand for and expectations regarding broadband video. Importantly, the data suggest that broadband video is not cannibalistic to linear video, but rather, an enhancement to the consumers traditional TV experience”.

According to the latest Horowitz Associates report, Broadband Content and Services 2007, six out of ten high speed Internet users watch/download online video content at least once a week and 86% do so on a monthly basis, compared to 45% and 71%, respectively, in the 2006 study. News and user-generated, non-professional content are the most often viewed genres, followed by movie previews/trailers, music videos, and previews/segments of TV shows.

Weekly viewing of full episodes of television shows doubled from last year, with 16% of high speed Internet users watching TV online on a weekly basis.

NBC and ABC are the networks Internet users mention the most frequently for online TV content, with Grey’s Anatomy being the most often mentioned TV program viewed online.

While consumption of broadband video has grown, the study shows that television is still the preferred platform for traditional TV content:

• 70% of Internet users who watch TV online say do so because they missed the episode on TV
• 18% of these respondents say they watch TV shows online to watch them again after having watched them on TV
• 20%watch TV shows online just when they happen to find them or when someone else tells them about them
• 13% of Internet users who watch TV shows online say they watch them directly online, and not on regular TV.

Penetration of video-enabled handheld (portable) devices is on the rise as is viewing of video content on these devices. 27% of Internet users have a cell, iPod/MP3 player, or PDA with video capability, and an additional 23% do not have this capability but are interested in getting it. Among those with video-enabled handheld devices, 35% watch video on their devices at least weekly and 62% do so at least monthly, translating to 18% of Internet users overall who watch video content on a handheld device at least monthly. This figure is up from 8% just one year ago.

Howard Horowitz, President of Horowitz Associates, Inc, concludes that “There is a dynamic relationship between broadband access, broadband content and broadband consumption… bringing more consumers to the platform… (which) creates an even greater demand (and expectation) for broadband video… the data suggest that broadband video is not cannibalistic to linear video, but rather, an enhancement to the consumers’ ‘traditional’ TV experience.”

For more about this study conducted Sept.-Oct 2007 by Horowitz Associates, please visit here.

NEW YORK: Findings from State of the Media Democracy, a new-media survey by Deloitte & Touche, were leaked late last week to The Hollywood Reporter. The data, which will not become officially available until next month, underscore the rise and rise of online media platforms.

Based on an online sample of 2,081 people during the last week of October, the study shows that 38% of respondents watch TV online; 36% use their cellphones as an entertainment source; and 45% create online content such as websites, music, videos and blogs.

But it is the pace of growth that astonishes. In a similar survey conducted only eight months earlier, usage of cellphones as entertainment devices was just 24% – a leap of fifty percentage points.

And there are marked variances by age group.

The current figure rose to 62% among millennials [those in the 13-24 age group] compared to 46% in the earlier study. While among Generation X consumers [age group 25-41], the number grew to from 29% to 47%.

Viewers of TV online rose in similarly spectacular fashion – from 23% in the previous study to 38% – of whom a majority (69%) said they watched or listened to consumer-generated content.

Other key findings reveal that . . .

• 54% of consumers said they socialize via networking sites, chat rooms or message boards, and 45% said they maintain a profile on a social network.
• 85% of consumers still find TV advertising to have the most impact on their buying habits, although online ads come second best with 65% saying they have the most impact, ahead of magazines at 63%.
• On the web, search engine result ads are the most effective, gaining 78% of the vote, followed by interactive ads (62%), banners (60%), pre-rolls (31%), post-rolls (19%) and embedded ads (17%).
• 67% of consumers said they would willingly be exposed to more online ads if they could receive free content they found valuable; but 65% opined that any type of internet ad was more intrusive than ads in newspapers and magazines. 37% said they would rather pay for online content than be exposed to advertisements.
• 59% said they pay greater attention to magazine ads than any type of internet advertising, and 55% said they pay greater attention to newspaper ads.

Advises Ken August, vice chairman of Deloitte’s media and entertainment practice: “For advertisers one of the conclusions is you don’t make decisions to advertise either on television or the internet when you want to hit all the demographics, but rather you need to have a multiplatform strategy.

“It shouldn’t be an ‘either/or’ proposition.”

Data sourced from AdWeek (USA); additional content by WARC staff, 31 December 2007

The Nielsen Company reported that television tuning during the 2006-2007 television year (9/18/06-9/23/07) remained at the record levels set the previous year, while the number of homes with Digital Video Recorders (DVRs) more than doubled.

According to the Nielsen report:

• The total average time a household had a TV set tuned during the 2006-2007 television year was 8 hours and 14 minutes per day
• The average amount of television watched by individual viewers during the 2006-07 television year dipped by 1 minute per day to 4 hours and 34 minutes
• The number of households with Digital Video Recorders today stands at 20.5% of Nielsen’s National People Meter sample, up from 17.2% in May 2007. When Nielsen began including households with DVRs in its samples in January 2006, DVR penetration was estimated to be approximately 8% of households

Patricia McDonough, Senior Vice President of Planning Policy & Analysis at Nielsen Media Research, said “…(though)… there are numerous screens competing for time and attention, as well as consumer devices providing new ways for viewers to watch their favorite shows… (the results of this study) demonstrate that tuning to traditional television remains strong.”

Though the viewing time of television sets continues to grow, About 16% of US Internet households watch TV broadcasts online, according to The Conference Board and TNS. Respondents said that TV on the Internet had replaced news programs as their most widely viewed online content, reports eMarketer.

According to eMarketer projections, by 2011 there will be 200 million broadband Internet users. Of them, 183 million, or 91%, will watch online videos.

And, entertainment on the Web has replaced news as respondents most widely viewed Online content.

Paul Verna, senior analyst at eMarketer, suggests that “Rather than a wholesale shift in viewership from TV to the new-media channels, both media will actually grow in the next several years. Internet video will entrench itself in the content mainstream, right alongside TV, albeit not in such pervasive numbers.”

For more information on the Nielsen Study, please visit here.