Most consumers are keeping it short and sweet when it comes to their online video viewing habits, but that may be limiting the industry’s ability to monetize its inventory, according to FreeWheel’s Q1 Video Monetization Report. During the first quarter, 86.7% of video views on “Linear + Digital” networks were less than 5 minutes in length, as were 86.2% of video views on “Digital Pure-Play” networks. But ad loads (ads per video viewed) for short-form content averaged out at just 0.9 for the Linear + Digital model and 0.5 for the Digital Pure-Play model.
By contrast, ad loads were a healthy 9.5 in Q1 for long-form content served up by FreeWheel’s Linear + Digital clients, although they were much smaller (1.3) for Digital Pure-Plays. Long-form content (20+ minutes) accounted for 6% of views for Linear + Digital, and only 1.9% for Digital Pure-Plays.
The researchers describe the “Linear + Digital” model as generating the “majority of… revenue from linear TV services and also offering content on IP-based environment,” as well as “being “focused on diverse mix of short, mid, and long-form content, with an emphasis on driving high ad loads.” The “Digital Pure-Play” model, by contrast, is characterized by its exclusive operation in IP-based environments, “either by aggregating third-party premium content and/or developing original premium content.” In this case, the “business models [are] focused on video view growth through syndicated distribution of largely short-form content.”
When all of that is boiled down, the result is that the Linear + Digital model is seeing a slight decline in total video views (down 8% year-over-year), but that its much higher ad loads result in somewhat equal ad views as the Digital Pure-Play model, which has generated scale (+47% year-over-year) in video views, but lacks the ad loads of its counterpart. Those results may not change in the near future: most of the Digital Pure-Play’s growth has been in short-form video (+54% year-over-year), while the Linear + Digital model only managed 4% growth in long-form video views.
The researchers note that a combination of these models is necessary in order to bring online video to TV’s scale and to address the increasing demand from traditional TV ad buyers. That includes optimizing the mix of short, mid, and long-form content, increasing ad loads, and building audience size.
- On a net basis across both business models, total video views increased by 30% year-over-year in Q1.
- The Digital Pure-Play model is heavily dependent on syndication, which accounted for 84% of video views in Q1, compared to 25% for the Linear + Digital model.
- 96% of ad views for Digital Pure-Play networks were pre-rolls in Q1, while for Linear + Digital, mid-rolls accounted for 41% of ad views, up from 36% a year earlier.
About the Data: The data in the report is one of the largest available on the usage and monetization of professional, rights-managed video content, and in 2012 comprised over 53 billion video views.-MarketingCharts