State Of MVPD's Video-On-Demand - Video Advertising Bureau

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Television VOD systems can either stream content through a set-top-box, a computer or other device ..... Like us:faceboo
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

Contents

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

WHAT IS VOD?

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

STATE OF MVPD’S VIDEO-ON-DEMAND



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PROVIDER OF CHOICE FOR VIEWING VOD

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 Self-reported Paid Services Used To Watch Broadcast and/or VOD Programming

54%

Cable

Online Service

35% 30%

Satellite

Other

2%

Source: Nielsen Global VOD Survey 3Q15,North America, *respondents could select multiple service providers

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PROVIDER OF CHOICE FOR VIEWING VOD

High Cable / Satellite VOD Usage Among Gen Z And Millennials Self-reported Paid Services Used To Watch Broadcast and/or VOD Programming

Cable and/or Satellite

Gen Z (A15-20)

Online Service

Other

70%

Millennials (A21-34)

31%

73%

Gen X (A35-49)

31%

77%

Baby Boomers (A50-64)

64%

Silent Generations (A65+)

63%

5%

24% 15% 6%

5% 4%

4%

2%

Source: Nielsen Global VOD Survey 3Q15,North America, *respondents could select multiple service providers

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REASONS FOR VIEWING VOD

Convenience & Catching Up Are Primary Drivers Of VOD Viewing % of VOD Viewers Who Somewhat/Strongly Agree With…

I can view at a time that is convenient for me

81%

I like to catch up on multiple episodes at one time

73%

I wish there were more VOD programming choices available

68%

Watching VOD programming on an online or mobile device is not as good as watching on a bigger screen

67%

Each person in my household can watch different programming at the same time

67% Prefer to View on a Big Screen

64%

Source: Nielsen Global VOD Survey 3Q15, Total Audience; North America

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REASONS FOR VIEWING VOD

Regardless Of Age, Convenience Is A Top Motivator; Younger Generations Want More VOD Content % Of VOD Viewers Who Somewhat/Strongly Agree With…

Generation Z (15-20)

Millennials (21-34)

Baby Boomers (50-64)

Silent Generation (65+)

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

70%

59%

77%

68%

68%

75%

Generation X (35-49)

79%

67%

61%

74%

Watching VOD programming on an online or mobile device is not as good as watching on a bigger screen

62%

67%

67%

Each person in my household can watch different programming at the same time

60%

70%

66%

82%

83%

48%

66%

39%

66%

67%

57%

73%

44%

Source: Nielsen Video On Demand Report, March 2016,; Nielsen Global VOD Survey 3Q15; North America

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MVPD Video-On-Demand Growth

TITLE’S GROWTH

MVPD’s VOD Growth Is Driven By The Continuous Accumulation Of Recently Aired Programming Content 2015 Average U.S. Operator VOD Titles Per Month

Some Examples of Programs On VOD (varies by cable provider)

37,750

30,200 25,344

18,961 15,667 9,803 8,100 5,950

2008

2009

2010

2011

2012

2013

2014

2015

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

40000

STATE OF MVPD’S VIDEO-ON-DEMAND

35000



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VOD V. SVOD

In Fact, MVPD VOD Libraries Exceed Those Of The Most Popular Subscription VOD (SVOD) Services SVOD vs. MVPD VOD Titles Comparison # of Titles Per Month 750 37, 0 ,20 30

218 17,

1 24 17, 35 9,6

03 8,8

60 7,1

14-Jan

Netflix

45 8,9

15-Jan

Hulu

Amazon

MVPD VOD

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

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NAVIGATION

…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?

Yes, I Feel It Is Easy To Find A Title

5% 67.

5% 47.

Q2 2014

.4% 48

Q2 2015

Q2 2016

Source: Digitalsmiths Q2 2016 Video Trends Report

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Video-On-Demand Usage

VOD PENETRATION

Over 70 Million Consumers Have Access to MVPD VOD VOD Penetration By Year 73,607,000

6% 41.

2009

.4% 46

2010

.7% 52

2011

.9% 56

2012

.5% 59

.0% 60

.9% 61

.2% 63

2013

2014

2015

2016

Source: Nielsen VOD penetration; June of each year, MVPD VOD

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USAGE

8 Out Of 10 Report Using MVPD VOD Video On Demand

79% Of Comcast Subscribers Have Watched VOD Content Through Their Provider

Source: Comcast

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USAGE

Those Who Utilize It, Do So Frequently; 70% Use Either Every Day Or A Few Times A Week How Often Use VOD/PPV Service (among Cable HHs)

19.8%

Every day

19.8%

Every day A few times a week

50.4%

A few times a week

50.4% 16.5%

Once a week

16.5%

Once a week

7 16.

7.4%

A few times a month

5.0%

Once a month Less than once a month

Monthly MVPD VOD Transactions Per TV

7.4%

A few times a month

Once a month

…Increase In Usage Is Evident As Monthly MVPD VOD Transactions Are Up +5%

9 15.

5.0%

7 16.

9 15.

0.8%

Less than once a month

0.8%

2015

2016 2015

2016

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

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TIME SPENT

Time Spent With MVPD VOD Is Up 10% In Just Two Years - Reaching 10 Hours Per Month Hours Spent With MVPD VOD Per TV Per Month

hrs 1 . 10

hrs 1 . 9

2014

hrs 9.3

2015

2016

Source: comScore State of VOD Report 2016; mvpd VOD; monthly averages; 2014 & 2015 are yearly and 2016 is through 2Q16

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MVPD VOD VIEWING BY DEMO

MVPD VOD Viewing Is Highest Among Millennials TV Viewing Distribution In Total Day Avg Mins Per Person with Viewing, Total Day

TV Viewing Distribution In Primetime Avg Mins Per Person with Viewing, Primetime

P2-11

95%

5%

91%

9%

P12-17

94%

6%

91%

9%

P18-34

94%

6%

91%

9%

P35-49

96%

4%

93%

7%

P50-64

97%

3%

95%

5%

P65+

98%

2%

96%

4%

Recently Telecast VOD Viewing

Live + Timeshifted Viewing

May 2016, Nielsen National People Meter Data, All Originators

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VOD PROFILE

VOD Users Tend To Be Young, Educated And Affluent Watched Movies or TV Shows on VOD A65+ 9%

$200K+ 11%

A18-24 14%

A55-64 14%

Less Than $30K 11%

34% $30K-$50K 12%

43% $100K-$200K 32%

Age

HHI

A25-34 20% A45-54 21%

$50K-$75K 18% A35-44 22%

Post-Graduate Degree 14%

Didn't Graduate High School 7%

$75K+$100K 16%

High School Graduate 25%

49%

Bachelor's Degree 25%

Education

Black 14.3%

Hispanic 10.4% Asian 2.4% Native American 0.5%

Associate Degree 10%

Some College 19%

Ethnicity

White, Non-Hispanic 72.6%

Source: 2016 GfK MRI Spring, “Video-On-Demand # of Times Watched Past 30 days-TV/Shows/Movies (Any)”

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VOD PROFILE

…And Consumers Who View Only TV Content On VOD Are Even More Affluent Watched TV Shows On VOD A65+ 11%

$200K+ 10%

A18-24 14%

Less Than $30K 11%

A55-64 14%

$30K-$50K 13%

44% $100K-$200K 34%

Age

HHI

A25-34 20% A45-54 20%

$50K-$75K 17% A35-44 21%

Post-Graduate Degree 14%

Didn't Graduate High School 6%

$75K+$100K 15%

High School Graduate 25% Bachelor's Degree 25%

Black 14%

Hispanic 10%

Education

Asian 2% Native American 1%

Associate Degree 11%

Some College 19%

Ethnicity

White, Non-Hispanic 73%

Source: 2016 GfK MRI Spring, “Video-On-Demand # of Times Watched Past 30 days-TV/Shows (Any)”

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FREE-ON-DEMAND

Free On Demand, Where Typically The TV Content is Housed, Is The Most Popular MVPD VOD Share Of Transactions: 2Q16

MVPD VOD Share Of Time Spent: 2Q16

7.1% 7.1% Transactional-On-Demand Transactional-On-Demand

2.6% 2.6% Transactional-On-Demand Transactional-On-Demand

29.6% 29.6% StreamingStreaming Video-On-Demand Video-On-Demand

21.8% 21.8% StreamingStreaming Video-On-Demand Video-On-Demand

75.6% 75.6% Free-On-Demand Free-On-Demand

63.4% 63.4% Free-On-Demand Free-On-Demand

Source: comScore State of VOD: Trend Report 2016; A VOD transaction is defined as any On Demand streaming order or view

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CATEGORY GROWTH

TV Entertainment And Kids Programming Represent The Most Popular Free Content Free On Demand Share Of Transactions* By Category 10.0%

9.3%

5.1%

5.5% 10.2%

13.9%

25.6%

23.3%

47.8%

49.4%

2014

2015

TV Entertainment

Kids

Music

Movies

Other

Source: comScore OnDemand Essentials, *A VOD transaction is defined as any On Demand streaming order or view.

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CATEGORY GROWTH

TV Entertainment Content Has Been Rapidly Gaining Share Of Total VOD Transactions And Time Spent Year After Year MVPD VOD Share Of Transactions* & Time Spent In TV Entertainment Category

Share Of Transactions Share Of Time Spent

32% 23%

16%

36%

37%

40%

25%

16%

2009

2011

2013

2015

Source: comScore OnDemand Essentials, *A VOD transaction is defined as any On Demand streaming order or view.

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High Definition VOD

HIGH DEFINITION VOD

More HD VOD Content Is Being Viewed Than Ever Before – 68% Of Overall VOD’s Time Is Spent With High Definition VOD High Definition Average Monthly Share Of Overall VOD

HD % Of Transactions

HD % Of Time Spent

1990’s

% 68

% 63

% 57

% 50 % 44

37%

2014

2015

2016

2014

2015

2016

Source: comScore State of VOD Report 2016; MVPD VOD; HD=High Definition

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HIGH DEFINITION VOD

Across All Content Types, High Definition Transactions Have Continued To Rise Substantially High Definition Share Of All Transactions By Content Type

71%

71% % 65

61% % 48

% 58

% 56

% 45

2015

% 34

Free-On-Demand

2014

2016

Streaming VOD

Transactional VOD

Source: comScore State of VOD: Trend Report 2016

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HIGH DEFINITION VOD

High Definition Entertainment Has Propelled VOD’s Growth As Time Spent Is Up 18% Hours Spent With High Definition MVPD VOD Per TV/Month

8.7

2016

+18% v. YAG 7.4

2015

6.4

2014

Source: comScore State of VOD Report 2016; MVPD HD VOD

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VOD Viewership In-Depth

VOD ENGAGEMENT

Consumers Are More Engaged With MVPD VOD Programming, Spending More Time With An Average Program Average Minutes Viewed Per Telecast Tuned P2+, 5/16, 30 Min Primetime Programs

Live TV 16 min

Timeshifted 18 min

VOD 24 min

More Commercials Are Viewed Since Fast-forward is Most Likely Disabled Source: Nielsen People Meter Data, including only networks who encode RTVOD; 5/16; primetime

STATE OF MVPD’S VIDEO-ON-DEMAND



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VOD ENGAGEMENT

This Is True Among Key Advertiser Targets, As Engagement Is Higher With MVPD VOD Programming Average Minutes Viewed Per Telecast Tuned May 2016, 30Min Primetime Programs

0 24.

2 18.

1 17.

8 23.

4 16.

7 23.

0 18.

0 18. 0 16.

Live Viewing Time-Shifted Viewing Recently Telecast VOD Viewing

P18-24

P18-49

P25-54

May 2016, Nielsen National People Meter Data, Including only networks who encode Recently Telecast VOD Programming

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RATINGS GROWTH

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 Growth Varies Greatly By Program

Program Ratings In Non-DVR Households

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%

Source: Nielsen Update on Time-shifted Viewing report 5/16; Npower, P18-49 prime programming on ABC, CBS, CW, Fox, NBC, Tel and UNI

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VIEWING BY DAY

6 Out Of 10 People View VOD After The First Three Days A Program Airs % Of VOD Viewing By Day

Day 1

Day 2

Day 3

Day 4

Day 5

Day 6

Day 7

& Beyond…

60% View In Days 4 And Beyond

40% Of VOD Viewing Occurs In The C3 Window.

Source: Rentrak Custom report, June 2015; www.comcastwholesale.com – vod monetizing content across its entire lifecycle

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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

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Reaching The Consumer Using Dynamic Ad Insertion (DAI) On Cable Video On Demand (VOD)

CANOE’S DAI

Cable VOD DAI Via 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

Source: Canoe

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CANOE’S DAI

Where Cable VOD DAI Is Today

Coverage in 130 DMAs; 49 of the top 50; 35M Households

= No Canoe homes in DMA = Canoe homes in DMA

Source: Canoe

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CANOE’S DAI

Ad Impressions Are On The Rise 2014 To 2016 YTD 1.8

1.6

1.4

BILLIONS

1.2

2016 YTD: 9B Ad Impressions

1

0.8

2015: 11.8B Ad Impressions 0.6

0.4

2014: 6.3B Ad Impressions

0.2

0 Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Source: Canoe, Jan. 2014 - Jun. 2016

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CANOE’S DAI

Multiple Ad Opportunities Available For campaigns that utilize { Frequency Capping } the average campaign caps at

Q2 2016 4 Avg Ad Opportunities per Break

4

1

2 2

1

1 Pre-Roll

Pre-Roll

Impressions per episode.

1 Mid-Roll

Mid-Roll

Post-Roll

Post-Roll

Source: Canoe, Jun. 2016

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CANOE’S DAI

Benefits Of VOD DAI 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 Source: Canoe

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CONTACT US

For More Information Visit Us Online TheVAB.com Follow us: @VideoAdBureau Like us: facebook.com/VideoAdvertisingBureau Sean Cunningham

Danielle DeLauro

President & CEO

SVP Strategic Sales Insights

212-508-1223

212-508-1239

Jason Wiese

Evelyn Skurkovich

[email protected]

VP Strategic Insights

212-508-1219

[email protected]

[email protected]

VP Strategic Research & Insights

212-508-1220

[email protected]