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What is VOD? .................................................................................... 3
Provider of Choice For Viewing VOD .......................................... 4
By Demo .........................................................................................5
Reasons for Viewing VOD .............................................................. 6
By Demo ......................................................................................... 7
Title’s Growth ................................................................................... 9
VOD v. SVOD ...............................................................................10
Navigation ........................................................................................11
VOD Penetration ............................................................................ 13
Usage ............................................................................................... 14
Frequency ..................................................................................... 15
Time Spent ...................................................................................... 16
MVPD VOD Viewing by Demo ..................................................... 17
VOD Profile ............................................................................... 18-19
Free-On-Demand ..........................................................................20
Category Growth ..................................................................... 21-22
High Definition VOD ...............................................................23-26
VOD Engagement ....................................................................28-29
Ratings Growth ..............................................................................30
Viewing by Day ............................................................................... 31
Nielsen’s Measurement ................................................................ 32
Canoe’s DAI ...............................................................................33-38
Contents
STATE OF MVPD’S VIDEO-ON-DEMAND 3
What is VOD?
• Video-on-demand (VOD) are systems which allow users to select and watch/listen to video or audio content when they choose to, rather than at a specific broadcast time
• Television VOD systems can either stream content through a set-top-box, a computer or other device, allowing viewing in real time, or download it to a device such as a computer, digital video recorder or portable media player for viewing at any time
• MVPD Video-On-Demand (VOD) is a feature that enables cable or telco video subscribers access to a library of free or pay-per-view content through their set-top-box
This report will concentrate on MVPD VOD
WHAT IS VOD?
STATE OF MVPD’S VIDEO-ON-DEMAND 4
Even With The Rise Of Alternate Viewing Platforms, More Than Half (54%) Of Total Video-On-Demand Viewing Still Takes Place Through A Cable Provider
PROVIDER OF CHOICE FOR VIEWING VOD
Self-reported Paid Services Used To Watch Broadcast and/or VOD Programming
Source: Nielsen Global VOD Survey 3Q15,North America, *respondents could select multiple service providers
Cable
Online Service
Satellite
Other
54%
35%
30%
2%
STATE OF MVPD’S VIDEO-ON-DEMAND 5
High Cable / Satellite VOD Usage Among Gen Z And Millennials
Source: Nielsen Global VOD Survey 3Q15,North America, *respondents could select multiple service providers
Cable and/or Satellite Online Service Other
70% 31% 5%
73% 31%
77% 24%
64% 15%
63% 6%
4%
4%
5%
2%
Gen Z(A15-20)
Millennials(A21-34)
Gen X(A35-49)
Baby Boomers(A50-64)
Silent Generations(A65+)
Self-reported Paid Services Used To Watch Broadcast and/or VOD Programming
PROVIDER OF CHOICE FOR VIEWING VOD
STATE OF MVPD’S VIDEO-ON-DEMAND 6
REASONS FOR VIEWING VOD
Convenience & Catching Up Are Primary Drivers Of VOD Viewing
Source: Nielsen Global VOD Survey 3Q15, Total Audience; North America
% of VOD Viewers Who Somewhat/Strongly Agree With…
67% Prefer to View on
a Big Screen
64%
67%
68%
73%
81%I can view at a time that is convenient for me
I like to catch up on multiple episodes at one time
I wish there were more VOD programming choices available
Watching VOD programming on an online or mobile device is not as
good as watching on a bigger screen
Each person in my household can watch different programming at the same time
STATE OF MVPD’S VIDEO-ON-DEMAND 7
Regardless Of Age, Convenience Is A Top Motivator; Younger Generations Want More VOD Content
Source: Nielsen Video On Demand Report, March 2016,; Nielsen Global VOD Survey 3Q15; North America
% Of VOD Viewers Who Somewhat/Strongly Agree With…
Generation Z (15-20) Millennials (21-34) Generation X (35-49)
Baby Boomers (50-64) Silent Generation (65+)
44%
66%
39%
67%
66%
67%
74%
67%
75%
62%
57%66%70%60%
68%
83%79%77%70%
48%61%67%68%59% 73%
82%I can view at a time that is convenient for me
I like to catch up on multiple episodes at one time
I wish there were more VOD programming choices available
Watching VOD programming on an online or mobile device is not as good as
watching on a bigger screen
Each person in my household can watch different programming at the same time
REASONS FOR VIEWING VOD
STATE OF MVPD’S VIDEO-ON-DEMAND 9
MVPD’s VOD Growth Is Driven By The Continuous Accumulation Of Recently Aired Programming Content
Source: SNL Kagan Multichannel Market Trends; Count represents avg monthly selection, reflecting turnover and refreshed content and are not comparable to average titles available simultaneously. 1/16
TITLE’S GROWTH
2015 Average U.S. Operator VOD Titles Per Month
Some Examples of Programs On VOD(varies by cable provider)
2008 2009 2010 2011 2012 2013 2014 2015
5,950
37,750
30,200
25,344
18,961
15,667
9,8038,100
25000
30000
35000
40000
STATE OF MVPD’S VIDEO-ON-DEMAND 10
In Fact, MVPD VOD Libraries Exceed Those Of The Most Popular Subscription VOD (SVOD) Services
VOD V. SVOD
SVOD vs. MVPD VOD Titles Comparison# of Titles Per Month
Source: VAB analysis of SNL Kagan January 2016 data; mvpd vod= SNL Kagan Multichannel Market Trends; Count represents avg monthly selection, reflecting turnover and refreshed content and are not comparable to average titles available simultaneously. 1/16
50000
Net�ix Hulu Amazon MVPD VOD
14-Jan 15-Jan
9,635
7,160
17,241
30,200
8,8038,945
17,218
37,750
STATE OF MVPD’S VIDEO-ON-DEMAND 11
…And Navigation Has Continued to Improve – Making It Easier To Locate Specific VOD Titles
Do You Feel It Is Easy To Find a Movie You Will Enjoy In The VOD Catalog Provided By Your Cable/Satellite Provider?
Source: Digitalsmiths Q2 2016 Video Trends Report
Q2 2014 Q2 2015 Q2 2016
47.5%48.4%
67.5%
Yes, I Feel It Is Easy To Find A Title
NAVIGATION
STATE OF MVPD’S VIDEO-ON-DEMAND 13
Over 70 Million Consumers Have Access to MVPD VOD
Source: Nielsen VOD penetration; June of each year, MVPD VOD
VOD PENETRATION
VOD Penetration By Year
20102009 2011 2012 2013 2014 2015 2016
60.0%61.9
%63.2%
59.5%
56.9%
52.7%
46.4%
41.6%
73,607,000
STATE OF MVPD’S VIDEO-ON-DEMAND 14
8 Out Of 10 Report Using MVPD VOD
Source: Comcast
Video On Demand
79% Of Comcast Subscribers Have Watched VOD Content Through Their Provider
USAGE
STATE OF MVPD’S VIDEO-ON-DEMAND 15
Those Who Utilize It, Do So Frequently; 70% Use Either Every Day Or A Few Times A Week
Source: Nielsen Home Technology report; Base: HH subscribing to VOD or PPV in past week: transactions= comScore State of VOD Report 2016; mvpd VOD; monthly averages; A VOD transaction is defined as any On Demand streaming order or view; 2014 & 2015 are yearly and 2016 is through 2Q16
USAGE
How Often Use VOD/PPV Service(among Cable HHs)
50000
2015 2016
15.9
16.7
Every day
A few times a week
Once a week
A few times a month
19.8%
50.4%
16.5%
7.4%
5.0%
0.8%
Once a month
Less than once a month
50000
2015 2016
15.9
16.7
Every day
A few times a week
Once a week
A few times a month
19.8%
50.4%
16.5%
7.4%
5.0%
0.8%
Once a month
Less than once a month
…Increase In Usage Is Evident As Monthly MVPD VOD Transactions Are Up +5%
Monthly MVPD VOD Transactions Per TV
STATE OF MVPD’S VIDEO-ON-DEMAND 16
TIME SPENT
Time Spent With MVPD VOD Is Up 10% In Just Two Years - Reaching 10 Hours Per Month
Source: comScore State of VOD Report 2016; mvpd VOD; monthly averages; 2014 & 2015 are yearly and 2016 is through 2Q16
Hours Spent With MVPD VOD Per TV Per Month
2014 2015 2016
9.1 hrs
9.3 hrs
10.1 hrs
STATE OF MVPD’S VIDEO-ON-DEMAND 17
MVPD VOD Viewing Is Highest Among Millennials
MVPD VOD VIEWING BY DEMO
TV Viewing Distribution In Total DayAvg Mins Per Person with Viewing, Total Day
May 2016, Nielsen National People Meter Data, All Originators
TV Viewing Distribution In PrimetimeAvg Mins Per Person with Viewing, Primetime
Live + Timeshifted Viewing Recently Telecast VOD Viewing
95%
94%
94%
96%
97%
98%
5%
6%
6%
4%
3%
2%
9%
9%
9%
7%
5%
4%
91%
91%
91%
93%
95%
96%
P2-11
P12-17
P18-34
P35-49
P50-64
P65+
STATE OF MVPD’S VIDEO-ON-DEMAND 18
VOD Users Tend To Be Young, Educated And Affluent
Source: 2016 GfK MRI Spring, “Video-On-Demand # of Times Watched Past 30 days-TV/Shows/Movies (Any)”
A18-24 14%
A25-3420%
A35-4422%
A45-5421%
A55-6414%
A65+9%
Didn't Graduate High School
7%
Some College19%Associate
Degree10%
Bachelor's Degree
25%
Post-Graduate Degree
14%
High School Graduate
25%
Less Than $30K11%
$30K-$50K 12%
$75K+$100K16%
Native American
0.5%
Asian2.4%
Hispanic10.4%
Black14.3%
$100K-$200K 32%
$200K+11%
$50K-$75K 18%
White, Non-Hispanic
72.6%
Age HHI
Education Ethnicity
34%
49%
43%
Watched Movies or TV Shows on VOD
VOD PROFILE
STATE OF MVPD’S VIDEO-ON-DEMAND 19
…And Consumers Who View Only TV Content On VOD Are Even More Affluent
Source: 2016 GfK MRI Spring, “Video-On-Demand # of Times Watched Past 30 days-TV/Shows (Any)”
VOD PROFILE
A18-24 14%
A25-3420%
A35-4421%
A45-5420%
A55-6414%
A65+11%
Didn't Graduate High School
6%
Some College19%Associate
Degree11%
Bachelor's Degree
25%
Post-Graduate Degree
14%
High School Graduate
25%
Less Than $30K11%
$30K-$50K 13%
$75K+$100K15%
Native American
1%
Asian2%
Hispanic10%
Black14%
$100K-$200K 34%
$200K+10%
$50K-$75K 17%
White, Non-Hispanic
73%
HHIAge
Education Ethnicity
44%
Watched TV Shows On VOD
STATE OF MVPD’S VIDEO-ON-DEMAND 20
FREE-ON-DEMAND
Free On Demand, Where Typically The TV Content is Housed, Is The Most Popular
MVPD VOD Share Of Transactions: 2Q16
Source: comScore State of VOD: Trend Report 2016; A VOD transaction is defined as any On Demand streaming order or view
MVPD VOD Share Of Time Spent: 2Q16
21.8%Streaming
Video-On-Demand
75.6%Free-On-Demand
2.6%Transactional-On-Demand
7.1%Transactional-On-Demand
29.6%Streaming
Video-On-Demand
63.4%Free-On-Demand
21.8%Streaming
Video-On-Demand
75.6%Free-On-Demand
2.6%Transactional-On-Demand
7.1%Transactional-On-Demand
29.6%Streaming
Video-On-Demand
63.4%Free-On-Demand
STATE OF MVPD’S VIDEO-ON-DEMAND 21
TV Entertainment And Kids Programming Represent The Most Popular Free Content
Source: comScore OnDemand Essentials, *A VOD transaction is defined as any On Demand streaming order or view.
Free On Demand Share Of Transactions* By Category
TV Entertainment Kids Music Movies Other
2014 2015
47.8%
23.3%
13.9%
5.1%
10.0%
49.4%
25.6%
10.2%
5.5%
9.3%
CATEGORY GROWTH
STATE OF MVPD’S VIDEO-ON-DEMAND 22
TV Entertainment Content Has Been Rapidly Gaining Share Of Total VOD Transactions And Time Spent Year After Year
Source: comScore OnDemand Essentials, *A VOD transaction is defined as any On Demand streaming order or view.
MVPD VOD Share Of Transactions* & Time Spent In TV Entertainment Category
2009 2011 2013 2015
16% 16%
23% 25%
32%36% 37%
40%Share Of Transactions
Share Of Time Spent
CATEGORY GROWTH
STATE OF MVPD’S VIDEO-ON-DEMAND 24
More HD VOD Content Is Being Viewed Than Ever Before – 68% Of Overall VOD’s Time Is Spent With High Definition VOD
1990’s
Source: comScore State of VOD Report 2016; MVPD VOD; HD=High Definition
High Definition Average Monthly Share Of Overall VOD
HD % Of Transactions HD % Of Time Spent
20152014 2016 2014 2015 2016
57%
68%
44%
63%
50%
37%
0.8
1.0
HIGH DEFINITION VOD
STATE OF MVPD’S VIDEO-ON-DEMAND 25
Across All Content Types, High Definition Transactions Have Continued To Rise Substantially
High Definition Share Of All TransactionsBy Content Type
Source: comScore State of VOD: Trend Report 2016
2014
2015
2016
Free-On-Demand Streaming VOD Transactional VOD
34%
48%
61%
45%
58%
71%
7080
56%
65%71%
HIGH DEFINITION VOD
STATE OF MVPD’S VIDEO-ON-DEMAND 26
High Definition Entertainment Has Propelled VOD’s Growth As Time Spent Is Up 18%
Source: comScore State of VOD Report 2016; MVPD HD VOD
HIGH DEFINITION VOD
Hours Spent With High Definition MVPD VOD Per TV/Month
2016
2015
2014
8.7
+18% v. YAG7.4
6.4
STATE OF MVPD’S VIDEO-ON-DEMAND 28
Consumers Are More Engaged With MVPD VOD Programming, Spending More Time With An Average Program
Source: Nielsen People Meter Data, including only networks who encode RTVOD; 5/16; primetime
Average Minutes Viewed Per Telecast TunedP2+, 5/16, 30 Min Primetime Programs
Live TV16 min
Timeshifted18 min
VOD24 min
More Commercials Are Viewed SinceFast-forward is Most Likely Disabled
VOD ENGAGEMENT
STATE OF MVPD’S VIDEO-ON-DEMAND 29
This Is True Among Key Advertiser Targets, As Engagement Is Higher With MVPD VOD Programming
VOD ENGAGEMENT
May 2016, Nielsen National People Meter Data, Including only networks who encode Recently Telecast VOD Programming
Average Minutes Viewed Per Telecast TunedMay 2016, 30Min Primetime Programs
Live Viewing
Time-Shifted Viewing
Recently Telecast VOD Viewing
P18-24 P18-49 P25-54
18.217.1
24.0
16.418.0
23.8
16.018.0
23.7
STATE OF MVPD’S VIDEO-ON-DEMAND 30
Growth Varies Greatly By Program
Overall, MVPD’s VOD Provides Additional Reach: Within Non-DVR Homes, Ratings Grow 10% With Playback In First 3 Days, Mostly Attributed To VOD Viewing With Fast-Forwarding Disabled
Source: Nielsen Update on Time-shifted Viewing report 5/16; Npower, P18-49 prime programming on ABC, CBS, CW, Fox, NBC, Tel and UNI
RATINGS GROWTH
Program Type Live Live+3 % Lift
Total U.S. 0.87 0.95 10%
White 0.69 0.78 12%
Black 0.83 0.94 12%
Asian 0.36 0.42 16%
Hispanic 1.45 1.52 5%
Program Ratings In Non-DVR Households
STATE OF MVPD’S VIDEO-ON-DEMAND 31
6 Out Of 10 People View VOD After The First Three Days A Program Airs
VIEWING BY DAY
Source: Rentrak Custom report, June 2015; www.comcastwholesale.com – vod monetizing content across its entire lifecycle
% Of VOD Viewing By Day
Day 1 Day 2 Day 3 Day 4 Day 5 Day 6 Day 7 & Beyond…
40% Of VOD Viewing Occurs In The
C3 Window.
60% View In Days 4 And Beyond
STATE OF MVPD’S VIDEO-ON-DEMAND 32
NIELSEN’S MEASUREMENT
Nielsen’s Measurement Of MVPD VOD Allows For Monetization
Playback of encoded VOD viewing will be credited to the linear C3 and C7 rating, as long as program content and National ad load are fed exactly the same to the VOD feed.
In order to get VOD credit, the program and spots must preserve the original Nielsen linear encoding.
How it works: Clients embed a “VOD flag” into the linearly encoded content via software encoder. The VOD flag simply identifies the content as VOD v. DVR.
– There are 2 options:
• C3 flag – used if content will retain the linear commercials for only 3 days. Use of C3 flag eliminates the need to “re-pitch” the VOD content on day 4 when the linear commercials are removed
• C7 flag – used if content will retain the linear commercials for 7 days
Source: Nielsen
STATE OF MVPD’S VIDEO-ON-DEMAND 34
Cable VOD DAI Via Canoe
Source: Canoe
Canoe Enables National TV Network Programmers To Easily Insert Advertising Into Their Video On Demand Programming On Cable Operators’ VOD Platforms
Consumer Picks TV Program From Cable VOD Service
Consumer Watches
TV Program
Consumer Watches Ads Inserted As Ad Breaks Occur Before, During, And After the Program
CANOE’S DAI
STATE OF MVPD’S VIDEO-ON-DEMAND 35
Where Cable VOD DAI Is Today
Source: Canoe
Coverage in 130 DMAs; 49 of the top 50; 35M Households
= No Canoe homes in DMA
= Canoe homes in DMA
CANOE’S DAI
STATE OF MVPD’S VIDEO-ON-DEMAND 36
Ad Impressions Are On The Rise
Source: Canoe, Jan. 2014 - Jun. 2016
1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
BIL
LIO
NS
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2014: 6.3B Ad Impressions
2015: 11.8B Ad Impressions
2016 YTD: 9B Ad Impressions
2014 To 2016 YTD
CANOE’S DAI
STATE OF MVPD’S VIDEO-ON-DEMAND 37
Multiple Ad Opportunities Available
Source: Canoe, Jun. 2016
Q2 2016Avg Ad Opportunities per Break
Pre-Roll Mid-Roll Post-Roll
1 1
4
2
For campaigns that utilize { Frequency Capping }
the average campaign caps at
Pre-Roll Mid-Roll Post-Roll
1 1
4
2Impressions per episode.
CANOE’S DAI
STATE OF MVPD’S VIDEO-ON-DEMAND 38
Benefits Of VOD DAI
CANOE’S DAI
Source: Canoe
New Targeting Capabilities
• Advanced/Data Driven/Addressable TV
• Data sets that influence index % to series on national inventory
• Data sets that influence HH targeting on local inventory
• Programmatic to Supply Side Platforms (SSP) e.g. FreeWheel and Google DPF
• Programmatic to Demand Side Platforms (DSP) e.g. Innovid
Timely & Reliable Measurement
• Pay only on actual ad impressions verified by Canoe
• Stable, accurate, single source measurement
• Complements TV plan’s reach as DAI reporting separate from VOD in Nielsen C3/C7 rating or ComScore
• No Fraud, No Bots, All Viewable
CONTACT US For More Information Visit Us Online TheVAB.com
Sean Cunningham President & CEO
Danielle DeLauro SVP Strategic Sales Insights
Jason WieseVP Strategic Insights
Follow us: @VideoAdBureau
Like us: facebook.com/VideoAdvertisingBureau
Evelyn Skurkovich VP Strategic Research & Insights