State Of The Online Nation 2 - VOD


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A perspective on the Video On Demand Market. Created by Mat Riches

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  • I’d like to set things up with a couple of classic quotations The first from Danish sage and former Aberdeen FC boss, Ebbe Skovdahl… Click And also one from that famous Media researcher, Donald Rumsfeld. Click The point I would like to get across at this early stage is that Statistics are brilliant and I hope to be able to offer you lots, but they don’t tell you everything And as that famous hawk put it. There are lots of things we know we know, lots we know we don’t know, and there are things we don’t know that we know and things we don’t know that we don’t know. There is still a lot to uncover, but here is a summary of what we think we know.. It’s still early days
  • Back in the early 1980s when work began on the Large hadron collider, the search began for the GOD particle, now that it has been switched on the search has moved. Now we are seeking The VOD particle. I think VOD formulates two things, although it means lots to lots of people. The SAG defines VOD as “… an umbrella term for a wide range of technologies that enable consumers to select videos for viewing on a television or computer screen at the time they want to view them.” - Screen Actors Guild – Glossary of terms Video On Demand (VOD) – “Allows users to watch what they want, when they want. This can be either ‘pay per view’ or a free service usually funded by advertising. “ - IAB Jargonbusters The word VOD connotes quite a lot to a lot of people, but I think it can loosely be boiled down to these two things…
  • The Vod market has been a busy and hectic one… I am going to concentrate on the Broadcast market, but I am aware that press sites in all their glory have started carrying VOD. However, they can come and talk about how that works for them, and to me it is merely them attempting to harvest the glamour of TV.. If we talk about the B/C market only it has grown and changed massively in the last few years from the launch of Youtube back in 2005 to the launch of See Saw in Jan this year. I suspect I have missed some out of this list. I think it illustrates that no one has stood still and got it right at the first attempt. It’s evolving all the time, And there can only be more changes…
  • So VOD – the final frontier…as part of an as part of an ongoing attempt to catalogue and define VOD, I have tried to break it down into constituent parts. I think at the moment it kind of looks like this, although we mustn’t ignore illegal VOD … .like Bit Torrent or Iso hunt…obviously I don’t know anything about this though… A recent NMA Study shows that 31% of kids 6-14 have downloaded illegal content…the little shits…But these are the viewers/consumers of the future We don’t have UK figures, but in the US Heroes is the most illegally downloaded TV-show, with over 6 million downloads for a single episode, according to a Top 10 published by website Torrentfreak . Heroes (NBC) was downloaded 6.58 million times in 2009, meaning more fans tune in illegally than watch the show legally on television. Commenting on the piracy of US TV-shows Torrentfreak observed: “The rise of unauthorised downloading of TV-shows is a signal that customers want something that is not available through other channels. Availability seems to be the key issue why people turn to BitTorrent, and this is also reflected in the fact that most downloads occur from countries where the show has yet to air on TV.” The blog continues: “Despite massive piracy of TV-shows, there are plenty of opportunities for distributors and broadcasters to win viewers back. The piracy figures simply show that TV viewing habits are changing. There is a huge interest in on-demand TV and there are millions of viewers that can potentially bring in millions of dollars in revenue.”
  • Well lots of people have used the internet to view video (C.36 million) but by our definitions the figure is more like roughly a quarter of people. (c. 15 million) There is still a long way to go…
  • TV viewing habits are hard to budge. It is still the national habit to watch much TV as it is broadcast. And a sizeable proportion watch TV only this way. 95% of people still watch linear & live TV most of the time. However 58% are doing a bit of both
  • If we look a little closer we can see that the traditional TV market players look a bit like this I have tried to show the split between BBC radio & TV usage of iPlayer, as I think this inflates the VOD market I have taken the BBC’s own monthly stats and broken down the % of requests and then applied them to UU stats from Nielsen. Over time we hope to build in a more complete picture, using BARB and online stats together…
  • These are the profiles of the PSB stations in the UK and their catch up services Usage of the individual players appears to be broadly in line with that of the UK internet population
  • I think quotation at the top of the page is a relevant one. I believe VOD will become much more ubiquitous the more it becomes the norm, and for it to become the norm adoption needs to grow amongst the likes of my mum, and the older generation. It’s all well and good us mere slip of a things using this wonderful technology, but once I see my mum catching up on ITVplayer (and other online services are available) then it will truly have arrived. And we can see this happening In two years the 55+ category has grown 450 % In 1 year it has grown 120 15-34 grew 111/54 35-54 – 267/47 This pretty much matches the figures put out by Ofcom in their 2009 converging technologies report Total = 23% - nearly ¼ using internet to watch catch- up TV Source: Ofcom, CMR 09 – Converging Technologies – Ofcom Research Q1 2009
  • This research is from Yahoo looking at the online video market, and it looks at when people are watching streaming video, so may not be wholly representative of the VOD market, but what I think it does show The peaks of when they are consuming VOD look very similar to those of TV, which begs the cannibalisation question…
  • Think box, from their ME TV research would argue that VOD is not cannibalising, it is adding to people’s viewing.
  • The questions are asking about VOD taking away from TV, well there is evidence that that’s not the case. What we can see is that while we are looking at two different scales we can see that visits to for Catch up views fall outside of the ITV1 viewing peak, and that there are peaks in visits to outside of traditional hours for Peak TV viewing. The BBC have a similar chart to this…I know because I copied it for this one, but they tell the same story
  • At ITV we have started looking at a way of seeing how VOD works incrementally, and while this is not a perfect science We can see that What is does show is the growth in use of Online vod between the series’s’s’s’s’ This chart totals and profiles viewing outside of live viewing to premiere episodes. It may include any or all of the following: - Omnibus episodes Repeats between first tx and next episode on any channel - Total playback (within 7 days) - catch up views Virgin data is not added in as most (but not all) of it is included in BARB
  • Predictions are there that the schedule will be dead, but we say long live the schedule… It’s interesting that it is a Tiscali survey that predicts the end of the linear schedule, someone who is not a content creator… At ITV we think there is absolutely still going to be a schedule…for a while to come… On-demand consumption is, of course, growing steadily, though not at a rocket pace. We expect growth rates to be dampened over the next five years by the continuing rapid mass-market adoption of devices with personal video recorder functionality. Most VOD consumption is of recent and popular programmes aired on linear TV, with little evidence of significant appetite for archive and other long-tail content." Toby Syfret @ Enders Deloitte in their 2010 media predictions say that linear, broadcast TV "is likely to remain dominant not just in 2010 but for many years to come".
  • The bulk of research is suggesting it’s about watching programmes people would otherwise miss
  • Source: Kantar Media futurePROOF. Base: 1900, 997, 1018 Ever viewed Recorded TV, Online VOD, TV VOD Online, Catch up is nearly twice as important as a motivator than anything else. For TV VOD, it’s more balanced. Catch-up is the most important motivator, but it’s not so much head and shoulders above the others. PC The other interesting thing to note here is that It’s much more about ME TIME than communal… Looking at this last bar – TV VOD as a way of watching programmes you perhaps haven’t built up an attachment to, but have an interest in is more pop than online VOD. I think the split between TV Vod and online VOD at the opposite ends of the spectrum is about trust in the content and time management. I think people are more likely to use PC VOD for Catch up of things they have missed, but have seen before And will record/Demand/PVR things they have yet to see/experience via the TV. It’s an experiential thing.
  • Now it’s lovely that people are watching it , and it’s growing, but where’s the cash…THE VNOD bit of the presentation Aside from the naysayers that don’t want to pay or see ads, the majority would be happy to get the content for free… From a B/C POV it would appear that the ad-funded model is one that appears to be working so far, the general public are getting used to getting this content free. People are getting used to Free The UK is one of the few countries where willingness to pay for content has remained relatively static…a growth of just 3% in a year Source: Accenture Global Broadcast Survey 2009 2008 2009 Growth US 28 35 25% Uk 36 37 3% France 42 44 5% Germany 26 39 50% Italy 50 49 -2% Spain 42 41 -2% Brazil 46 63 37% Mexico 37 69 86%
  • Please bear in mind that this is only for PC VOD, TV Vod may make this a lot easier in the future…but I still only see it growing There is no real visibility here for DTO or PPV VOD
  • And while acceptance varies depending on the content, people are more likely to agree that Ads around full length content is just dandy with them…Although the length of the ad will have some bearing on this acceptability
  • There are several schools of thought on this: But as a rule of thumb 30 seconds seems to be acceptable IN 2007-8 The OPA had a study called Frames of Reference: Online Video Advertising, Content and Consumer Behaviour.” that suggests 30 second ads are the clear winners for relevance, Brand consideration, Ad likeablity, ad and Ad awareness In 2009 MTV ran a study that ranked the 30-second pre-roll second, performing well in overall effectiveness and likeability and demonstrating ongoing consumer acceptance of pre-rolls even for short-form content. It was behind The Lower 1/3 Product Suite as the most effective ad product across all advertiser categories. Consumers also ranked the Lower 1/3 experience to be the most likeable of the ad experiences. However, the second place still shows that it is popular. DL & Milward Brown 5 Seconds Weakest level of breakthrough + Most difficult to understand (3) 15 Seconds Highest brand association(1) + Easiest to understand(1) + Most efficient (cost vs. creative results) with highest level of engagement(2) + Great for simple, rational messages; challenged for striking an emotional chord. + Optimum length (in this case) for pre-roll 30 Seconds Highest likelihood of being shared online (1) + Most persuasive of the three lengths (2) + Allows communication of emotional benefits and more complex messages + Works well in user initiated placements + (1)Above all other lengths and significantly above norm. (2)Above all other lengths and norm. (3)Significantly above all other lengths and significantly above norm. (4)Above all other lengths but below norm. An Atlas study suggests pushing for 30’s over 15s and 60’s over 30’s…basically the longer the better, but this was in 2006
  • At ITV we have only just started to scratch the surface of this…we looked at one particular advertiser and tested 30 second versus 20 second creative. Here you could argue that the shorter the ad the more people agreed they liked it’s style, and yet the longer the ad more people found it plausible…Intriguing, no? There is more work to be done on this clearly…remember what Ebbe and Rummy had to say at the start?
  • One final thing to remember about the customer experience is that we need to be aware that if it goes horribly wrong then we will lose them… So It’s lovely that people like to watch it, but hang on, does it actually work CLICK
  • It wouldn’t be a TV company presentation if I didn’t touch on some of Thinkboxes’ wonderful work…
  • If we look at a couple of the CPM studies we have run, and please do see me after if you want to hear more we can see that VOD can work well on it’s own, but is even more powerful when run in conjunction with TV It boosts ad recognition… Web only versus the Unexposed groups saw uplifts of 80% and 42% per audience TV only versus unexposed – 90 + 88 TV & web versus unexposed – 112 or 107 TV & Web versus TV only = 11 or 11 Not bad, n’est pas… VOD working in contingent with TV increases the awareness of the ad campaign
  • But they would say that, so at least we can see that they are spending more money as a result as well..…
  • TV & Web together are counteracting ideas that Waitrose are too expensive…no mean feat I can tell you….
  • It’s interesting to see where VOD is divided up in the agency world, and that it would appear to find itself equally at home in either the TV or the Online buying world
  • Research – There is still a limited understanding of the effectiveness of online video advertising. Advertisers need a greater understanding of the branding impact of VOD, how engaged audiences are compared to TV; are they hitting light TV viewers and how do they quantify the incremental coverage a VOD campaign is delivering against their TV activity? And we are working on it…the gold standard is to find out about incremental reach. Our own X platform study showed that we were reaching light TV viewers with our online activity. However, we need to put this against VOD and see if it’s the same situation. Remind me to mention our CPM studies at the end…Again. We, along with everyone else are chasing the golden path that is incremental viewing… CLICK Measurement – There are many arguments that the measurement online can deliver is far more accurate and accountable compared to TV, but the fact remains there is no audience measurement system in place for the web. Until this is in place, measuring audiences against the BARB (Broadcasters Audience Research Board) TV panel is always going to be a challenge for media planners and buyers. Definitive proof of Incremental reach is still the holy grail for VOD, and the WEB TV survey of the buying industry suggests that there’s a fairly equal split in opinion about who can do this. Comscore – 31 UKOM 23 BARB 23 15% neither of these.
  • There’s a poem by Simon Armitage that says …don’t go inventing the acid that will eat through everything without giving some thought to a jar to keep it in” I think the web and VOD are kind of in that position, it’s the most measureable medium there is to a certain degree, and yet we still can’t truly prove how it works as incremental to other media. There are a number of ways of measuring it though. UKOM The UK Online Measurement Company is the authoritative voice for UK online audience measurement, run in response to the needs of advertisers, media agencies and online media owners.  Powered by The Nielsen Company, the UKOM Audience Planning System will allow advertisers and their agencies to plan online campaigns that target specific audiences, using an industry-approved system just as they do with TV (BARB), radio (RAJAR) and print media (NRS). To my mind it will be ace, but not for a few months yet… Adam Pace from Opera at a recent Mediatel event suggested that agencies and owners alike will probably have to buy into it as some clients will want to use it. A senior big wig at My Space (Simon Daglish) suggested it will only really get interesting when the planning side of it meets the buying side to allow often separate agencies to integrate. Because until they do, planning will be done on UU etc, and Buying will be done on impressions and CTR’s IAB’s Video Council – the group dedicated to the promotion of online video advertising – Launches VAST 2.0 is a global initiative created by IAB in the US, originally launched to bring greater consistency to online video planning and buying, and make the format more comparable with other media such as TV. Comparison with other media: Greater reach and frequency: Unified data reporting: VAST 2.0 will complement the video component of the UK Online Measurement Company’s (UKOM) Audience Planning System, due for launch in mid 2010. Advertisers and agencies can plan campaigns using UKOM, with VAST 2.0 then making it easier to reach those audiences. Companies so far committed to incorporating VAST 2.0 before the end of 2010 are listed below, some are already compliant: P ublishers - SkyB , Bauer CBS Channel 4 IDS / Virgin Media ITV LoveFilm Microsoft Telegraph TV Times Online Turner Ad servers - DoubleClick EyeBlaster Eyewonder .FOX Tremor Videoplaza WebTVEnterprise
  • INTEL suggest that the future of TV is going to require a lot of computing power BY 2015 more than 12 billion devices will be capable of connecting to 500 billion hours of TV and video content. Justin Rattner, INtels chief Tech office said
  • It’s tin foil hat time…. Broadband will be in everything..>Everything will be connected…
  • Now is probably not the time to dwell on Social, but it would be remiss of me to not mention Social. JWT in there predictins of 100 things for 2010 suggest we look out for greater web and Tv integration…Although Eyeblaster have research that suggests Video doesn’t work well in Social media, but it’s an area that needs further investigation. A known unknown if you will.
  • So where are we…it wouldn’t be a media type presentation without using the Gartner Hype Cycle somewhere… Is VOD in the trough of dillusionment? Will Tyrone & Mollie get back together. I don’t know the answer to that, but I suspect the future is going to be a lot better for VOD than it is for Tyrone? Thankfully geek and Poke simplified the GHC for us, I have edited it slightly as I suspect “your Mum” should be further down the line, but I suspect other than that it is about right… I can tick of Clay Shirkey, the Gartner Hype Cycle, Social media, I did have a slide about NUDGE as well, but I have left that out today I think my work here is done. Slope of enlightenment
  • State Of The Online Nation 2 - VOD

    1. 1. Prepared & presented by ITV Commercial Research & Insight VOD
    2. 2. Firstly… “ There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we know we don't know. But there are also unknown unknowns. There are things we don't know we don't know. ” – Donald Rumsfeld “ Statistics are just like mini-skirts, they give you good ideas but hide the most important thing . ” – Ebbe Skovdahl
    3. 3. Defining the parameters Video On Demand (VOD) Content that people are going online and offline to find, to catch up with Video (Not) On Demand (VNOD) Advertising placed around this content
    4. 4. Flux me, there’s a lot been happening Sky BB launches Q1 Five D/L Launches Q3 4OD Launches Q4 BT Vision Launches Q4 YouTube launches Q1 Virgin media launches AppleTV launches Q1 iPlayer Launches Q4 Iplayer Beta Q3 SkyAnytime launches Q1 revamp Q1 5D/L = Demand Five Q3 =ITVplayer Q4 SKY BB = SkyPlayer Q2 C4 Catch Up launch Q2 C4 Consolidates CU & Stream Q1 Youtube launches Shows Q3 ITVplayer refresh Q4 MSN Video Q3 C4 Catch Up consolidates Q2 SeeSaw in Beta & Live Q1 iPlayer onto PS3 Q4 2005 2006 2007 2008 2009 2010 Canvas Q4???? MS VP goes Live Q1
    5. 5. The VOD nebula Picture Source: - The Eagle nebula – Pillars of Creation TV VOD PC VOD PVRs Mobile
    6. 6. Who watches Video On Demand? 60% of the adult population have used the internet to view video But… 25% have used the internet to watch Television programmes Source: enders analysis – UK Quarterly Internet trends Q4, 2009
    7. 7. Solus use of VOD is small, but it is growing 22524: nVision Snapshot: Media Use Source: nVision Research Base: 1,200 respondents aged 15+, GB, 2008 5% 37% 58% Do Both
    8. 8. The iPlayer is the largest player Source: Netview Jan 2009- Dec 2009 – Entertainment – Video category/BBC internal Statistics – Jan 2010
    9. 9. Profile of the UK Catch up services Source: Nielsen Online, home and work, May 2009
    10. 10. VOD use growing fastest amongst the 55+ Source: "Communications tools don't get socially interesting until they get technologically boring" Clay Shirkey, Here Comes Everybody “ Which of the following, if any, have you done on the internet in the last 6 months…? Watched television programme / film (e.g. BBC iPlayer)*” Source: nVision Research Base: 1,200 respondents aged 15+, GB
    11. 11. When are they watching? Source: Yahoo – Understanding the Drivers to Video Consumption
    12. 12. Online viewing is incremental to broadcast Online TV builds on, rather than replaces broadcast viewing. It is a different experience, used for different things. In our study, online TV added up to 3 hours of viewing per week to linear television.
    13. 13. Catch up viewing is outside of peak Can you come back when I have watched Loose Women? Oh no, it’s ok, I’ll go to the ITV player later Source: TV Figures – BARB/Ofcom December 2009 - Individuals/Internal figures
    14. 14. V iewing A cross M ultiple P latforms - THE X FACTOR CATCH UP VIEWING TREND
    15. 15. Some people are predicting the death of the schedule British viewers predict end of traditional TV “ More than three quarters (79%) of British consumers predict that there will be no TV schedules by 2018 and we will instead be able to always watch what we want, when we want to… ”
    16. 16. Web TV seen as an extension to broadcast…
    17. 17. … and Catch up is still the main reason for using VOD Source: Kantar Media futurePROOF,2009
    18. 18. The public don’t want to pay for it…? No, I haven’t and I would not pay 67% No, I haven’t been asked to pay 27% Yes 4% Don’t know 2% Q: have you ever paid to watch Television online? Source: Deloitte State of the media democracy report, July 2009
    19. 19. So, where’s the money in all of this? Source: Wiggins Entertainment Media Research 2009 Thinking again about content from the internet that may be available in the future through your TV, if you had to choose which of the following ways of paying for content would most appeal to you?
    20. 20. The predictions are that this won’t be changing soon Source: Screen Digest
    21. 21. 9 out of 10 will accept ads around quality content Source: Ipsos MediaCT’s MOTION study – Base Digital Video Users (n=939) Acceptance of Free, Advertising-supported video (April 09) 86% 78% 65% 51%
    22. 22. While we are on the subject of time lengths…
    23. 23. We say it’s a mixed bag… And we have a few more statements about this ad for Duck Fresh Discs. Please highlight the extent to which you agree with each statement I liked the style of the ad I didn’t really believe it* * Figures are based on Disagree/Strongly Disagree
    24. 24. Please be aware that people can be very unforgiving 4 Out of 5 viewers leave if a stream buffers once Source:
    25. 25. The benefits from the horses’ mouths
    26. 26. Web alone works well, but together with TV we can rule the world For which brand of toilet care product, if any, have you seen or heard any advertising in the last month? Duck Fresh Discs Source: Survey interactive Consumer Survey – October 2009 Increases in ad awareness
    27. 27. Increases in actual pounds, shillings and pence Source: Survey interactive Consumer Survey – Oct 2009 essential Waitrose - Please indicate when you most recently bought something from each of the following own label ranges. (Base: All respondents) Cumulative for Bought in last week or last month 90% significant for bought in last month 133% uplift 44% uplift
    28. 28. Changing perceptions…we got that too Source: Survey interactive Consumer Survey – Oct 2009 essential Waitrose - Which of the following supermarkets’ own label product ranges do you think are described by each of the statements on the left? (Base: All respondents)
    29. 29. Who is buying & Why?`deo_Advertising_Buyers_Guide_-_March_2010.pdf
    30. 30. Key barriers to growth
    31. 31. It’s still horses for courses….
    32. 32. The future is TV shaped Source: Enders – VOD edges forward 2009 “ TV will remain at the centre of our lives and you will be able to watch what you want where you want” – Justin Rattner, Intel
    33. 33. It’s tinfoil hat time
    34. 34. And of course it will become more social
    35. 35. Obligatory usage of the Gartner Hype Cycle Source: Gartner/Geek&Poke
    36. 36. To Summarise Hard to define Small, but perfectly formed It’s getting older as we speak Catch up is king, but not eating into linear People are getting used to it
    37. 37. Any questions? [email_address] or @matriches Cartoon (@) from Gaping Void
    38. 38. Prepared & presented by ITV Commercial Research & Insight VOD