August 2009

Video Content:
A Premium Opportunity
Paul Verna, Senior Analyst

Executive Summary: Online video content is on a clear upward trajectory. Audience levels and stream counts are rising, the demographic range of the viewing population is expanding and the content mix is evolving from short, snack-type clips to long-form content such as TV shows and feature films.

US Online Video Viewers and Penetration, 2008-2013
2008 2009 2010 2011 2012 2013 Online video viewers (millions) % of Internet users % of population 135 70% 44% 144 72% 47% 154 75% 50% 165 78% 53% 177 82% 56% 188 85% 59%

Note: individuals who download or stream video at least once per month Source: eMarketer, July 2009

As the medium matures, monetization models are coming into clearer focus. Most video inventory is funded through ad support. This includes user-generated content, news clips, humor videos, TV shows and special events such as the Olympics. On the other side of the coin, feature films and mainstream sports content continue to be monetized through subscriptions and download fees. In the next several years, mobile distribution through smartphones will expand the reach of Web video. Improvements in streaming quality, including HD, will also go a long way toward making the online video experience more attractive to users.As these trends unfold, technology innovations will close the gap between the PC, the TV and the digital cable box.The result will be a smoother flow of content from platform to platform, ultimately enabling consumers to enjoy video wherever and however they choose. Key Questions ■ How many people in the US are watching online video, and how will this number change?
■ Which forms of content are getting the most traction? ■ How is online video being monetized? ■ Which sites dominate the online video landscape? ■ What are some of the trends that will fuel the growth of online

For additional information on the above chart, see Endnote 105369 | 105370 in the Endnotes section.

The eMarketer View Audience Size Audience Makeup Online Video Content Landscape Monetizing Online Video Top Video Sites Future Trends Conclusions Endnotes Related Information and Links

2 3 6 9 12 13 14 16 16 17

video in the next few years?


Digital Intelligence

Copyright ©2009 eMarketer, Inc. All rights reserved.

Several studies have shown that recent growth has been driven primarily by older viewers. July 2009 105369 The result has been a climate in which the Web is an increasingly important part of the media mix for US consumers. Propelled by YouTube. News Corp. ® Video Content 2 . people are upgrading their players and we’re seeing more HD content. As online video matures. and it will take more time for older adults—including boomers and seniors—to catch up. The rule of thumb with ad-supported online video is that premium content is where the ad dollars are going. viewers now tune in to a growing array of online video destinations. CEO. and Disney—is the fastest-growing video property on the Web and is now ranked among the top three or four sites in terms of stream count and unique visitors. As recently as four years ago. July 2009 With the exception of Hulu. from teenage sports buffs to news junkies to retirees who enjoy classic movies. In general. The idea of embedding a clip within a browser and having it play instantly seemed like the Holy Grail. the top US online video destinations have not changed dramatically over the past year. news and event programming is ad-supported. 4-by-4. Now. up from 47% in 2009 Note: individuals who download or stream video at least once per month Source: eMarketer. up from 144 million in 2009 % of US Internet users who will be online video viewers in 2013. Entertainment content has proliferated on venues such as Hulu and YouTube. Best of all. audiences are growing commensurately in size and demographic diversity. The long tail notwithstanding. microblogs. marketers like to attach their brands to predictable. This capability makes every video a potential viral hit and opens opportunities for content distributors and marketers to monetize the medium. Accordingly. news programs and mass-media events that have played out online. For additional information on the above chart. indicating that online video is still far from a level playing field. up from 72% in 2009 % of US population who will be online video viewers in 2013. the Web has exploded with video content—most of it available for free to the consumer in browser-friendly interfaces. pixelated images. Online video is no longer grainy. humor and user-generated clips—the genres that make up most of the inventory on popular sites such as YouTube—have proven more difficult to monetize because of the unpredictable nature of the content. By contrast. in an interview with eMarketer. Much of the growth in the Web video space over the past year has come from premium content—TV shows. younger viewers are more comfortable with the video experience. The other way video is monetized is through direct transactions. “Publishers are focusing on quality content. most episodic television. see Endnote 105369 | 105370 in the Endnotes section.The eMarketer View Key eMarketer Numbers — Video Content 188 million 85% 59% US online video viewers in 2013. Today. there is a market for long-form content in the form of 30-minute or hour-long TV episodes. blogs. Whether they want to catch up on a TV episode they missed or follow a breaking news story. President Obama’s inauguration and Michael Jackson’s funeral epitomized a landscape where tens of millions of people experience events through live video streams. Gone are the days when the space was dominated by short user-generated clips aimed primarily at a collegiate crowd. movies. YuMe. while the Websites of major media outlets such as The New York Times and CNN have also ramped up their video offerings. Still. e-mail and other social platforms. the online video experience is light-years away from its humble origins. premium sites and other sharing destinations. the few sites that featured video content forced viewers to download clips or launch dedicated streaming players. Web portals. Trying to view video on a computer used to be an exercise in frustration. The bulk of feature film and premium sports programming is funded through subscriptions and download fees. video offerings cater to all age groups and interests. viewing levels tend to be highest among 18-to-24-year-olds. As Hulu proves. Hulu—which is a joint venture of NBC Universal.” —Michael Mathieu. the bulk of the current video inventory is sharable through social networks. hit properties. Movie studios and sports leagues seem comfortable with this model despite the constant threat of digital piracy—and fans have been willing to pay.

in an interview with eMarketer. including stream count and unique viewers. and interactivity features that work better online than on TV. smartphones and netbooks—and traditional viewing platforms such as TVs and digital cable boxes The number of US online video viewers will grow to 188 million in 2013. Internet service providers are also experimenting with metered bandwidth schemes. up from 47% in 2009. live sports and feature films ■ A movement toward clear monetization models for online video. These figures represent individuals who download or stream video content at least once per month. Hulu is proving that the audience will stick around.eMarketer. the most likely scenario is that Hulu and YouTube might charge a fee for ultrapremium content such as movies and sports. This will put online video within range of Web activities such as search and e-mail. Open Box Technologies. as well as older classics. Online video viewers will make up 85% of Internet users in 2013. but the Google-owned company has been trying to broaden its offerings to include premium content.The mass-market tipping point will occur in 2010. Note: individuals who download or stream video at least once per month Source: eMarketer. These include mobile distribution through smartphones and next-generation networks. July 2009 For all of Hulu’s success in the premium sphere. CEO. “In the US. digital cable boxes and TVs.” —Keith Richman. Relative to the US population as a whole. Web browsers ■ A broadening content mix that ranges from short-form user-generated clips to episodic TV. US Online Video Viewers and Penetration. Break Media. YouTube remains the clear leader among video sites by most relevant metrics. the heaviest users of Web video would presumably have to pay for their consumption. YouTube and Hulu have both publicly floated the notion of charging consumers for some content. ® Video Content 3 . Its strategy has been to sign content deals with film studios and TV program owners that are not affiliated with Hulu. and leave the rest of their inventory—TV shows. when online video will be viewed by 50% of US consumers. with episodic TV and mass-media news clips leading the way in the ad-supported realm. It is difficult to imagine the public tolerating a return to paid content for video genres that are currently ad-funded. availability of HD content online ■ Direct access to Web content through smartphone “I think the audience might watch longer video content. online. ad-supported content.” —Cameron Brain. news. July 2009 New monetization experiments will also shape the future of online video. better integration among PCs. see Endnote 105369 | 105370 in the Endnotes section.The eMarketer View Audience Size Behind the Numbers: US Online Video Viewers The growth of the US online video audience will be fueled by a confluence of factors that include: ■ Improvements in streaming quality and increasing Hulu’s success is largely the result of filling a void in the market for a one-stop destination for premium. humor. user-generated clips—in ad-supported formats. up from 72% in 2009. in an interview with eMarketer. Accordingly. and media companies are also considering paid subscriptions after migrating most of their content to ad-supported models. particularly TV shows. A broadcast TV ad blitz that started during the Super Bowl probably helped cement the idea in people’s minds that they could enjoy a growing selection of first-run shows. we’ve finally got a critical mass of smartphones that can stream Web video in a way that’s commensurate with people’s expectations. YouTube is still the go-to destination for user-generated clips. from 144 million in 2009. which are nearly at saturation points among US Internet users. 2008-2013 2008 2009 2010 2011 2012 2013 Online video viewers (millions) % of Internet users % of population 135 70% 44% 144 72% 47% 154 75% 50% 165 78% 53% 177 82% 56% 188 85% 59% A number of trends will keep online video on an aggressive growth trajectory in the coming years. July 2009 105370 105370 For additional information on the above chart. YouTube has a long way to go to shake its association with homespun videos. CEO. Despite its efforts at reshaping its brand. so if these take off. online video will achieve a 59% penetration rate in 2013. HD streaming and other quality enhancements. and feature films and sports capturing transactional revenues ■ Better integration between Web-enabled devices— such as personal computers.

2009 103616 103616 Note: *households with a networked online video device. 27% of US consumers ages 12 and older had viewed an online clip in the past week. December 2007 & September 2008 (% of respondents) 3% 7% 8% 12% 15% 18% 27% Streamed movie 5% 17% Streamed TV show 12% 25% Total streamed (all video content) 50% 57% December 2007 (n=862) September 2008 (n=935) www. Comparative Estimates: US Online Video Viewers. work and university locations. 2009 & 2012 (millions) 2009 15 39 Note: *home. "Q-Series: Global Media Themes. In 2009.Assuming that the average US household size is 2. June 2009 eMarketer. various. 2009 (millions) comScore Inc. July 2009. media extenders (e. data for April 2009. standalone media boxes or DVRs Source: UBS. the UBS figures equate to roughly 101 million people in the US with access to dedicated online video devices (other than computers) by 2012. from 50% in December Ipsos MediaCT tracked video streaming and downloading among US Internet users from December 2007 to September 2008 and found increased usage across the board. The proportion of Internet users who streamed free or paid video rose to 57% in September 2008.7 144. see Endnote 105642 in the Endnotes section.6 people (using the US Census Bureau’s 2005–2007 estimate).com ® Video Content 4 .eMarketer. Apple TV) Note: ages 12+. US Internet Users Who Have Streamed Video*.0 133. 2008 100503 100503 www..*. The survey also noted increases in the number of people who streamed movies and TV shows during that period.8% increase over the prior-year figure—while comScore estimated 152 million viewers in April 2009. July 2009 Nielsen Online**.Audience Size Nielsen Online put the number of US unique viewers of online video at 134 million in May 2009—a 12. up from 3% in 2003. such as gaming consoles. June 2009 151. as noted.8 A UBS study projected that the number of US online-video-connected households would increase to 39 million by 2012 from 15 million in 2009. *free or paid in the past 30 days Source: Ipsos MediaCT. US Online Video Viewers.eMarketer. "The Infinite Dial 2009" sponsored by TargetSpot. June 2009 105642 105642 2012 www. "Motion" as cited in press release.g. December 18. A survey by Arbitron and Edison Media Research noted rising penetration of online video viewing over a six-year span. **data for May 2009 Source: For additional information on the above chart. April 16. US Online-Video-Connected Households*. 2003-2009 (% of respondents) 2003 2004 2005 2006 2007 2008 2009 Note: ages 12+ who have viewed an online video in the past week Source: Arbitron and Edison Media Research. 2009 104941 104941 www.eMarketer." June 22.

**such as feature films or complete TV programs Source: Office of Communications (Ofcom) .eMarketer. 2006 & 2008 (% of each group) 18-54 10% 21% 13-17 11% 28% 18-34 12% 26% 35-49 8% 16% 50-54 1% 9% 2006 2008 An Office of Communications (Ofcom) and Synovate study found that 47% of US Internet users watched or downloaded short clips—more than double the number who reported watching or downloading longer content.003) Japan (n=1. September-October 2008 (% of respondents) Brazil User-generated % who watch of which: % who regularly watch a complete video Professionally generated % who watch of which: % who regularly watch a complete video 88% 87% 59% 60% 78% 42% 64% 71% 71% 79% 85% 80% 58% 59% 62% 42% 63% 71% 70% 80% Germany Japan UK US Source: ® Video Content 5 . US Internet Users Who Have Downloaded a Digital Video* File." provided to eMarketer. February www. Ipsos noted an uptick in the number downloading video content.000) France (n=1. these were modest compared with the more dramatic increases in streaming activity—a barometer of the success of streaming sites such as Hulu..UK.Audience Size Similarly.000 US Internet users found that 70% viewed user-generated clips. as well as corresponding increases in the downloading of movies and TV shows. *free or paid in the past 30 days Source: Ipsos Source: Knowledge Networks Inc. 2008 100522 100522 www.eMarketer.002) Italy (n=1. 2009 100936 100936 Note: ages 12+. January 12. "State of the Media Democracy Third Edition. November 20. the percentages of US Internet users who accessed full-length TV shows grew by large margins across every age category. "The International Communications Market 2008” conducted by Synovate. by Type.000) Germany (n=1.eMarketer.eMarketer. such as TV shows or films. by Age. Online Video Consumption of Internet Users in Select Countries.010) 50% 43% 47% 45% 39% 47% 47% Watch or download longer video content** 22% 21% 14% 27% 18% 23% 23% Note: ages 18-64. October 2008 (% of respondents) Watch or download short video clips* Canada (n=1. and 80% of those viewers regularly watched full clips to completion. "How People Use TV's Web Connections" as cited in press release. "Motion" as cited in press release. From 2006 to Another indication of the growth in TV show viewing came from a Knowledge Networks study. *including those made by other people. US Internet Users Who Access Full-Length TV Programs Online. Internet Users in Select Countries Who Watch Userand Professionally Generated Video. 2009 101753 101753 www.003) UK (n=1. December 2007 & September 2008 (% of respondents) Downloaded movie 8% 11% Downloaded TV show 7% 11% Total downloaded (all video content) 19% 22% December 2007 (n=862) September 2008 (n=935) A Deloitte survey of more than 2.001) US (n=1. December 18. However. These percentages were nearly identical to those for professional clips. 2008 100507 100507 www.

In November–December 101751 68% 67% 26% 36% Source: Accenture. compared with 26% in December 2007. An Accenture study of Generation Y (ages 18 to 24) and baby boomer/senior (ages 45 and up) Internet users found that only the latter group showed growth in online video activity. "How People Use TV's Web Connections" as cited in press release. others showing slight decreases and others essentially flat. by Knowledge Networks. By contrast.eMarketer. February 12. March 2009 103117 103117 www. the 13-to-17 group saw a slight decline in the use of third-party sites. ® Video Content 6 . by Generation. 36% of boomer/senior respondents said they watched or posted videos online. "Consumer Electronics Products and Services Usage Report" conducted by Survey. The survey noted relatively small changes in the percentages of respondents who said they used network sites. Select Digital Media Activities of US Internet Users.Audience Makeup With so many studies showing increases in online video viewing. it is worth a look at the demographics to discern patterns in the growth trends. provided to eMarketer. quadrupling in the 50-to-54 group and more than doubling in the 35-to-49 group. the use of third-party sites grew dramatically among older respondents. 2006 & 2008 (% of respondents*) 13-54 2006 Use TV network Websites to view video Use third-party video sites to view network video 2008 Use TV network Websites to view video Use third-party video sites to view network video 63% 51% 68% 64% 53% 61% 56% 61% 65% 53% 13-17 18-34 35-49 50-54 16% 27% 15% 12% 8% December Another age-based when younger viewers were watching videos in far greater proportions than their older counterparts. Methods Used by US Internet Users to Stream TV Network Content. 2009 101751 www.eMarketer. The resulting responses in 2008 were relatively close from one age group to another. the responses in the 18-to-24 group were virtually unchanged—albeit still higher than among the older segment. with some age groups showing slight gains. in contrast to 2006. At the other end of the scale. December 2007 & November-December 2008 (% change) Generation Y (18-24) Baby boomers (45+) However. by Age. tracked the use of TV network and third-party video sites from 2006 to 2008.December November2007 December 2007 December 2008 2008 Reading blogs or listening to podcasts Connecting on social networking sites Playing video games on the go (via mobile device) Listening to music on iPod or other portable player Watching/posting videos on the Internet 45% 80% 44% 45% 82% 45% 15% 18% 9% 26% 28% 13% 28% 26% 30% 26% 32% 68% 76% 21% 31% Note: *among those who access full TV programs online Source: Knowledge Networks Inc.

2 4.4 116.2 2. camera.1 20. "Video Consumer Mapping" conducted by Ball State University's Center for Media Design and Sequent Partners.9 74.0 3. the medium still represents a small fraction of time spent viewing.7 369.4 1.0 24.eMarketer.1 0.5 498.3 0.1 0. by Age and Gender.1 11.1 11. November 2008 & April 2009 (minutes per viewer and % change) November 2008 Gender Male Female Age 2-11 12-17 18-24 25-34 35-49 50-64 65+ Total 113 178 303 253 187 122 67 178 116 190 349 296 243 139 81 206 3% 7% 15% 17% 29% 14% 21% 16% 209 151 249 170 19% 12% April 2009 % change For all the gains that online video has made.1 0. A study by conducted by Ball State University and Sequent Partners for Nielsen’s Council for Research Excellence reached the same conclusion.9 67.2 0.6 0. 2009 104094 104094 www. May 14.9 6.4 15.1 573.5 46.6 2.8 1.0 4.8 0.0 Note: numbers may not add up to total due to rounding Source: Council for Research Excellence.3 5.0 20. March 26.4 minutes per day watching computer video during the survey period.5 Note: home and work locations Source: Nielsen Online.6 0.3 0.9 50.4 335.6 3.6 61.Audience Makeup Nielsen also noted greater percentage gains among older viewers in a study spanning from November 2008 to April 2009. Average Time Spent per Day with Select Media Among US Consumers.3 0.0 46.8 5.2 34.2 27. Spring & Fall 2008 (minutes) 18-24 25-34 35-44 45-54 55-64 Live TV Playback TV via DVR or TiVo DVD or VCR Console games TV total Any Web E-mail IM Any software Computer video Computer total Mobile talk Mobile text/multimedia messaging Mobile Web Mobile other (video.5 14. 2009 102749 102749 www.4 15.5 48.9 46.8 1.7 439.1 7.1 2.Younger adults and teenagers registered smaller increases in viewing minutes.8 9.1 420.5 0.8 2.0 51.0 17. by Age.1 2.2 279.6 2. games.6 24.6 2.1 Even with these gains.5 0.1 0.2 3.7 2.2 0.4 0.6 0.4 7.1 52.6 511.4 287.4 1.4 13.8 0. followed by the 25-to-34 group.9 256.0 321.9 1. which was less than 1% of the 309 minutes they spent watching live TV.0 4.6 2.1 513.7 346.2 0.0 2.1 2.0 10.3 166. US consumers spent 2. older viewers have some catching up to do to close the viewing gap.9 0.6 17.5 29.2 209.6 3.2 7.1 46.8 9.9 55.0 8.0 3.1 3.0 8.1 0.3 199.4 16.6 0.eMarketer. 509. 18-to-24-year-olds spent the most time viewing video.7 0.6 22.3 14.5 309. On average.5 142.3 15.2 4.2 41.5 4. etc.0 1.2 12.4 20.9 378.0 25.3 19.0 2.6 1.6 8. The correlation between age and time spent viewing continued through the 65-and-up group in the study.2 3.) Mobile video Mobile total Environmental/other video In-cinema movie GPS navigation Other total Total 65+ Total 18+ 14. followed by the 65-and-over group.2 11. Nielsen’s data showed that. followed by 25-to-34-year-olds.1 ® Video Content 7 .8 37.5 158.7 511.0 35.8 61.8 1.5 524. Average Time Spent Viewing Online Video Among US Internet Users. "VideoCensus" as cited in press release.6 0.4 353.4 4. 18-to-24-year-olds spent the most time watching online video. relative to TV.0 0.1 20.2 1.7 45.1 17.3 0.2 11.0 14.9 19.3 19.1 42.1 28.9 35.7 37.The 35-to-49 group showed the biggest gain in average time spent viewing during this period.5 14. on average.1 0. In spring and fall 2008.0 230.3 4.

" April 2009 103514 103514 www. at 54% compared with 46%. by Time Spent Watching Online Video on Their Computer. January 2009 (% of respondents in each group) 16-17 Watched a video clip Shared a video clip Uploaded a video clip 82% 52% 46% 18-24 82% 47% 41% 25-34 73% 48% 35% 35-44 67% 35% 32% 45-54 71% 31% 26% 55-64 65% 29% 21% Note: in the past month Source: "Global Web Index" conducted by Lightspeed Research. "A2/M2 Three Screen Report . 2008 101860 101860 www.3 1. By contrast. "Emerging Video Services III" as cited in press release. by Age. "2009 Social Media Study. iVillage and Compass Partners LLC. "Cisco Video Project Report" commissioned by Cisco. a study done by USC Annenberg for Cisco found that men spent an average of 1. December 17. December 2008-January 2009 (% of respondents in each group) 12-17 18-24 25-44 45-64 65+ 2% Source: Leichtman Research Group.2 1. 2009 104538 104538 A Nielsen study of the gender split of the US online video audience showed that women outnumbered men by 8 percentage points. Online Video and Mobile Video Viewers. when it came to time spent viewing.7 1.eMarketer. US Internet Users Who View Recent TV Episodes Online Weekly.eMarketer.4 1.3 1. compared with 1. May 28. However. (LRG). iVillage and Compass Partners studied female Internet users and found that 74% of 18-to-26-year-olds watched online video.6 1. October-November 2008 (hours per day) Gender Female Male Age 18-24 25-34 35-44 45-54 55-65 Education High school or less Some college or an associates degree Four-year college degree or more Location Urban Suburban Rural Online experience Experienced users* Newer users** Average time spent 1.5 1.3 1." February BlogHer. March 2009 (% of respondents) 18-26 27-43 44-62 63-77 Total 18-77 20% 45% 34% 53% 74% However.eMarketer.281 Source: BlogHer. Q4 2008 (% of total) On the Internet 46% On TV 47% On mobile phones 63% Male Female 37% 53% 54% 26% 28% 13% 6% Source: The Nielsen Company.eMarketer. USC Annenberg and Cisco noted similar gender patterns when it surveyed Internet users who watched professional and user-generated content. by Age. only 20% of 63-to-77-year-old women reported watching online video.4th Quarter 2008.At the other end of the www.6 hours per day watching video on their computers.7 1. 2009 102837 102837 ® Video Content 8 . Online Video Activities of US Internet Users.3 1.5 1. only 6% of boomers and 2% of seniors reported watching TV episodes weekly. 2009 104077 104077 www. by Gender. by Note: *10+ years.6 1. at 28%.Audience Makeup Leichtman Research Group analyzed weekly viewing of TV episodes online and found that 18-to-24-year-olds were the most likely to be viewers.6 Note: n=2.8 1. Inc. US TV. **<3 years Source: USC Annenberg School Center for the Digital Future. there was little variation among cohorts. TV and/or Movies Online. Demographic Profile of US Internet Users. US Female Internet Users Who Watch Video. and the 45-to-54 group had a greater representation of viewers than the 35-to-44 group—a slight deviation from the tight age correlations noted in other studies.4 1.3 hours per day for women.7 Lightspeed Research also noted higher levels of video viewing among younger Internet users. February 23.

June 2008 & April 2009 (millions and % change) June 2008 Entertainment -Multimedia* -TV -Kids -Entertainment--music -Entertainment--movies -Humor -Entertainment--news -Radio Portals News/information -General news -Weather Conversational media -Social networking Community -Family and parenting Sports Retail 2. the clear winner was “multimedia”—comScore’s shorthand for videos on popular sites such as YouTube and MTV.3 billion. US Online Video Streams and Streamers.545 361 324 191 55 31 23 106 1. July 2009 A comparison between comScore’s 2008 and 2009 figures showed that the number of multimedia streams grew by 412%. reach. when comScore published a similar list.” —Suzie Reider. leading the entertainment category to 282% growth as a whole. the entertainment category accounted for the largest number of online streams. www.Online Video Content Landscape A comScore study of US online video streams and streamers showed that in April 2009.348 7. and many of them are making enough money from advertising to run their small media companies as a full-time job. July 2009 105644 105644 www. September 2008 and July 2009. April 2009 Streamers Streamer Streams Streams Minutes (millions) reach (millions) per per streamer streamer Entertainment -Multimedia* -TV -Kids -Entertainment– movies -Entertainment–music -Humor -Entertainment–news -Radio Portals News/information -General news -Weather -Newspapers Conversational media -Social networking Community -Family and parenting Retail Sports 134 124 57 26 23 22 14 10 7 79 68 59 8 8 60 58 43 17 33 22 89% 82% 37% 17% 15% 14% 9% 7% 5% 52% 45% 39% 6% 5% 40% 38% 29% 11% 22% 15% 9. in an interview with eMarketer. head of advertising sales. US Online Video Streams. movie and entertainment news content each grew on the order of 50%. they also experienced the most growth since June 2008. reflecting an increase in the number of TV shows and films available online through sites such as Hulu—as well as the public’s seemingly insatiable obsession with celebrity news.123 300 221 24 538 534 303 256 155 125 April 2009 9. Entertainment also led by every other metric tracked by comScore—number of streamers. July 14. with a total of 9.eMarketer. YouTube. streams per viewer and minutes per stream.445 1. provided to eMarketer. The comScore comparison offers a glimpse into the evolution of online video over the past year. ® Video Content 9 .914 536 424 140 84 86 35 31 784 513 449 17 469 452 355 240 170 122 % change 282% 412% 49% 31% -27% 52% 179% 51% -71% -30% 71% 103% -28% -13% -15% 71% -6% 9% -2% Note: *includes sites like YouTube and MTV Source: comScore Video Metrix.914 536 424 84 140 86 35 31 784 513 449 17 21 469 452 355 240 122 170 70 64 10 16 4 6 6 4 4 10 8 8 2 3 8 8 8 14 4 8 189 175 36 22 4 16 9 3 14 16 13 14 2 3 14 13 11 17 11 13 “Some of our most successful partners are users who upload lots of short sketches and other clips. by Content Category. eMarketer calculations. 2009 105643 105643 Note: *includes sites like YouTube and MTV Source: comScore Video Metrix.348 Within the entertainment category.eMarketer. Not only were the entertainment category and its multimedia subset the leading entries in comScore’s April 2009 ranking. by Content Category.

OVGuide.138 13. 2009 101267 www. according to Nielsen. but is open to anybody who wants to participate in it. and this realm of online video is just the perfect offering. Given the important role that online video played in recent media events—such as Michael Jackson’s death and memorial—it is logical that the news category would see a big bump. Underscoring that Source: comScore Video Metrix as cited in press release.5 minutes in June 2009. fell by a sizable "VideoCensus" as cited in press release. CollegeHumor and Comedy Central are resonating with viewers. “People want to stay connected with what’s going on while they’re at work.9% Note: includes progressive downloads and excludes video the number of unique viewers of online video across the Web surged by 45% compared with the previous week.g.7% 33. US Unique Viewers on the Top Three Cable News Sites* on Inauguration Day. presidential inauguration accounted for a huge spike in online video traffic and streams. *vs. one can extrapolate that the average stream duration was 2. People are spending that half an hour to catch up on the news or their favorite show. home. in an interview with eMarketer.0% 36.eMarketer. likely a casualty of recent battles between some music labels and YouTube over availability of Nielsen also reported that the number of total minutes spent watching online video increased by 129% during the inauguration— surely an indication of viewers tuning in to long portions of the program. CNN. The music category.004 % change 1.And the numbers of viewers who witnessed the inauguration on the top three cable news sites—MSNBC. the 71% growth in this genre was driven entirely by “general news. CEO. up from 2 minutes in Nielsen’s April 2008 and FoxNews.945 January and FoxNews.9% 19. product manager. Unique viewers.. July 14. This type of scheduling has also driven online viewing traffic for sporting events such as the NCAA March Madness basketball games. Note: between 12pm-1pm EST. showing that the online video efforts of venues such as The Onion. 2009—rose by a staggering 1. 2009. Metacafe.” —Thomas Dodson. weather). in an interview with ® Video Content 10 . 101267 June 2009 Unique viewers (thousands) Total streams (thousands) Average streams per viewer Average time spent per viewer (minutes) 134.310 10. June 2009 For more information on how online video played a role in media coverage of Michael Jackson’s memorial. *MSNBC. The January 20.Online Video Content Landscape Humor grew by an even larger factor. click here. average streams per viewer and average time spent per viewer also grew substantially. July 2009 Another category that showed steep growth was news/information. Between noon and 1pm on the day of the event.390% 45% “On the Internet nobody controls distribution. January 27.824 75. 2009 Top three cable news sites* Total US Internet 277 8.8 % change* 12. US Online Video Viewer Metrics. We definitely see a lunchtime bump in visitors.” not by the “other” subcategory (e. 2009 105562 105562 www. July 2009 A Nielsen study of viewing trends showed that the number of video streams increased by 34% in June 2009 over the previous year.390%. It probably helped the inauguration’s online video stats that the ceremony took place in the middle of a workday.eMarketer.081. prior week) January 13. however. January 2009 (thousands and % change Combine that with the fact that the cost of content creation has dropped dramatically and you have a medium that is no longer controlled by a select few. CNN. prior year Source: Nielsen Online.1 188. work and university locations. From these figures.” —Erick Hachenburg.

illustrating the importance of multiple metrics when evaluating a program’s appeal to audiences and advertisers. The Young and the Restless (CBS) 10. like ‘Saturday Night Live.6 111. The Office (NBC) 214. 2009 ® Video Content 11 .0 138. Gossip Girl (CW) 5.” the show was off the air in December. “Lost” was followed by NBC’s “Saturday Night Live” and ABC’s “Grey’s Anatomy. FOX Broadcasting and NBC.” Top 10 US Broadcast TV Network Entertainment Programs Viewed Online.’ indicates that there is a Web audience that might otherwise not watch these programs at all. FOX and NBC networks. not a single TV show appeared on both the top-unique-viewer list above and the top 10 list for time spent.425 While a ranking of shows by unique online viewers is a strong barometer of the reach of those programs. “While the online popularity of some shows. Ugly Betty (ABC) 723 685 631 879 1.Online Video Content Landscape Nielsen tracked viewing of network TV shows online and found that ABC’s “Lost” led in unique viewers in December 2008—a validation of how the Internet can supplement broadcast TV. 2009 101708 101708 www. It should also be noted that Nielsen’s TV show rankings were limited to viewing on the Websites of the ABC. including their respective embedded video players. Samantha Who? (ABC) 560 8. 2009 101710 101710 www. Life (NBC) 7. programs are client-defined Source: Nielsen Online. FOX Broadcasting and Note: reflects video content on ABC. Desperate Housewives (ABC) 5.6 162.4 124. In the case of “ VP of media analytics.’ suggests that some people are using the Internet to catch up on programs they usually watch on television. followed by NBC’s “Chuck” and “Lipstick Jungle. in a press release. By that yardstick.5 153. The Simpsons (FOX) 6.9 These viewers are driven by a morning-after water cooler effect. February 12. Heroes (NBC) 6. Saturday Night Live (NBC) 3. Kitchen Nightmares (FOX) 8.” Notably.8 137.1 115. February 12. like ‘Grey’s Anatomy. CWTV.111 1. Chuck (NBC) 3. Grey's Anatomy (ABC) 4.eMarketer.2 140. Privileged (CW) 2. Ranked by Time Spent. Survivor (CBS) 519 496 10. December 2008 (thousands) 1. programs are client-defined Source: Nielsen Online. True Beauty (ABC) 462 Note: reflects video content on ABC. CWTV. February 12. Private Practice (ABC) 9. Lipstick Jungle (NBC) 4. and counted unique viewers as those who viewed full or partial episodes. Scrubs (ABC) 9. CBS Television. Lost (ABC) 2. Top 10 US Broadcast TV Network Entertainment Programs Viewed Online. Ranked by Unique Viewers. Nielsen Online. "VideoCensus" as cited in press release.8 Unique viewers (thousands) 29 226 152 165 41 133 40 350 323 374 7. The rankings did not include Hulu. advertisers are also interested in how much time people spend viewing shows. the CW’s “Privileged” was the top show in December 2008. "VideoCensus" as cited in press release. but the new season launched in January 2009. CBS so the spike was most likely viewers catching up on past episodes. the online popularity of other programs. including their respective embedded video December 2008 Average minutes per viewer 1.” —Jon Gibs.

senior VP of advertising. in an interview with eMarketer.eMarketer. supported by ® Video Content 12 . *from retail stores. premium programming. by Format. paid content will make up only 16. Entities such as MLB.1% 28. A lot of what drives businesses is: ‘Where are the advertising dollars going?’ They’re going to the longer-form On the whole. the online video industry is expected to tilt toward ad-supported funding. media companies charged a fee for accessing video content on their Websites. "eMerging Video Markets: The Third Wave of Media. The NPD Group reported that only 3% of consumer spending on home video consisted of digital downloads and online streaming in 2009. On the transactional side. It estimated that in 2009. June 2008 100103 and Apple’s iTunes derive significant revenues from subscription and download fees for premium content. Elsewhere in the online video spectrum.7% Note: includes a la carte and subscription models. 2009 103799 103799 “As high-speed broadband penetration increases and more and more people watch videos online. US Consumer Spending on Home Video. Hulu. May 12. *includes ad spending and paid content Source: BMO Capital Markets. Today. Up until a few years ago. "Entertainment Trends in America" as cited in press release. according to a BMO Capital Markets study.Monetizing Online Video Perhaps the most frequently asked question about online video is: “How is it being monetized?” The answer depends on the type of video.” —Thomas Dodson. banners. virtually all broadcast. subscriptions or kiosks Source: The NPD Group. OVGuide. Some genres—such as live sports and feature films—are monetized mostly through direct transactions with consumers. Following a period in which TV program owners experimented with transactional approaches for episodic content. cable and print news outlets offer free video online." provided to eMarketer. the dollars spent on online video make up a small fraction of the total. overlays and other types of ads. Hulu has effectively imposed a new ad-supported model on this type of long-form.” —Jean-Paul Colaco. June 2009 www.1% of the total. US paid online video content revenues make up 23. Consumers in those industries seem willing to pay for this content. US Paid Online Video Content Revenues. ad-based monetization is the norm. 2008-2011 (% of total online video spending*) 2008 2009 2010 2011 17. so the model seems to be working well for all parties. increasing scale will give advertisers the impetus to put more of their budget against online video.4% 23.7% of total online video spending (the total includes advertising revenues).com 100103 “Things have gone beyond the horse-kickingthe-beaver-in-the-teeth clips that started YouTube and other viral content sites. By 2011. July 2009 The same occurred with online video content on news and media outlets. in an interview with eMarketer. 2009 (% of total) DVD purchases DVD/Blu-ray rentals* Video-on-demand (VOD) Blu-ray purchases 7% 3% 9% 18% 63% Digital downloads and online streaming Note: average spending per month.4% 16. which gives people added motivation to put out that type of content. product manager.

Top Video Sites One of the most significant developments in online video over the past year has been the success of Hulu. excludes video server networks Source: comScore Video Metrix as cited in press release. Ranked by Unique Viewers.5 9.0 512.7% -15. However. Note: home. That put Hulu in the No. Viacom Digital 7. Yahoo! sites 5. Hulu 4.1% 1.9% 8.6% 1.1% 8. Ranked by Videos ® Video Content 13 .6 201.6 34. The site has become synonymous with TV viewing online. Yahoo! sites 4. Yahoo! 4.0 5. Turner Network 8.7% YouTube also leads in unique viewers.9 397.2 288.3% 35. "VideoCensus" as cited in press release. prior of (millions) month year streams 1.4 billion streams in April 2009—a 35.eMarketer.eMarketer. includes progressive downloads but excludes video advertising Source: Nielsen Online.1% 3.1% 1.6 112. YouTube 2. Hulu 3.9% 15.4% -8.5% 490.453.0% 32. Google sites 2. according to Nielsen.0 355.9% 2.0 9.2 121. Microsoft sites 7.2 315.6% 60.9 5. nearly double the total of Fox Interactive Media properties (parent company of MySpace) and nearly triple that of Hulu.3 203.8% 359.7% 3. Top 10 Online Video Properties Among US Internet Users.3 151.1 37. Viacom Digital 6.4 148. comScore calculated Google sites’ stream share at 40.4% 1.7 202. CBS Interactive 6.5% 1. April 2009 (millions and % of total) Videos viewed 1.1 3.7 13. Fox Interactive Media 3. excludes video server networks Source: comScore Video Metrix as cited in press release.5 9. MTV Networks Music 9. work and university locations.1% 2. Hulu 5. thereby affecting the percentage shares. Disney Online 10. as ranked by total streams.2 373.6% 1.2% 7.8% 144.0 23.4 130.2 32.2% 100. Nickelodeon Kids and Family Network 6.1% -38. includes both streaming and progressive download video.3% -2. Top 10 Online Video Properties Among US Internet Users.7% -2. In April 2009.7% -5. It is possible that comScore’s inclusion of university locations added content from college-oriented sites not tracked by Nielsen.8 45. 2009 104092 104092 www.7% 100. Turner Sports and Entertainment Digital 10.3 272.7 Average videos per viewer 63. Turner Network 8.5% increase over the previous year.7%—significantly lower than Nielsen’s estimate.4 % share 40.eMarketer. AOL 10.490.4% 2.7% 24. Google sites—which include YouTube and Google Video—attracted almost 108 million unique viewers.3 110.8 9. Its share of streams stood at nearly 58.2% -3. 2 slot behind YouTube. June 4.3 8. Fox Interactive Media 3. June 4. much as YouTube epitomizes the user-generated space. Top 10 US Web Brands.1 8.0% Note: home.4 175.1 34. AOL Total Internet 6. 2009 104596 104596 www. CBS Interactive 9. prior vs.9% 9. possibly a result of including Google Video as well as YouTube in its ranking. Facebook Total Internet Note: home and work locations.1% -12. Google sites 2.0% comScore showed a higher video count for Google sites in April 2009. 2009 104599 104599 www. April 2009 Total % change % change Share streams vs. according to comScore’s April 2009 figures. Microsoft sites 9. CNN Digital Network Overall online video usage 5.0 0.2% 2.7 7.785. April 2009 (millions and average videos per viewer) Unique viewers 1.2% 0.8 143.8% 0.9 164.1%. work and university locations. Fox Interactive Media 5.4 40.8% 15.8 132. MSN/Windows Live 7.9% 1.7 YouTube remains by far the biggest online video site. May 14.4 16. ABC. and the undisputed leader in the user-generated category.9 58.0% -10. includes both streaming and progressive download video.832. Nielsen estimated that YouTube served more than 5. Hulu’s stream count was up 490% over the previous year.2% 58.7% 1. Ranked by Total Video Streams.

YouTube 2. Note: home and work locations Source: Nielsen Online. and news organizations have also sent signals that they intend to charge customers for some content that is currently free. Megavideo 4. November 2008 & April 2009 (millions of minutes) November 2008 Site 1. feature films and live sports are funded mostly through fee-based systems. those genres are now firmly in the ad-supported camp. Also. 2009 104097 104097 www. increasing its minute count by more than 150% in April 2009 over November 2008.9 billion minutes on YouTube in April 2009. "VideoCensus" as cited in press release. As measured by time spent viewing. YouTube also came out on top in a Nielsen survey of US Internet users ages 35 to 49. Mobile With an installed base of video-capable smartphones in the tens of millions of units. These viewers spent more than 2. YouTube 2. 2009 104095 104095 www. Top Five Online Video Sites Among US Internet Users Ages 35-49. Average Time Spent Viewing Video on Hulu by US Internet Users. Hulu scored highest in the ranking. they could threaten the growth of online video. May 14. One of the key drivers to growth in mobile video is the capability to stream video live in browsers. CNN Digital Network April 2009 Time spent 2. with the largest percentage increase among seniors. Hulu 3. CNN Digital Network 5. However. At the same time. by Age. This feature allows people to use their smartphones the way they might use the Web without relying on a specific relationship between the content owner.983 933 313 215 187 Monetization One of the ripple effects of the emergence of Hulu has been a sense of clarity in the monetization of online video. May 14. Nickelodeon Kids and Family Network Time spent 2. On the other Hulu viewers in every other age category also increased their average viewing time on the site. device manufacturer and mobile 5. Ranked by Time Spent 4. in terms of growth.740 372 225 154 143 Site 1.eMarketer. content availability and consumer behavior.Top Video Sites Future Trends The growth of online video in the US will be fueled by convergent trends in technology development. However. as the iPhone 3GS does. the US seems poised for a surge in mobile video. Internet service providers are testing metered-bandwidth plans that would impose fees on the heaviest users of online video—the most bandwidth-intensive form of digital content. both Hulu and YouTube have publicly stated their desire to experiment with transactional approaches. imposing small fees for only ultrapremium video—they will likely generate new revenue streams without alienating their customers. when content owners experimented with transactional models for news videos and episodic TV content online. The groups with the biggest gains were those over age 35. ABC. Contrary to a few years ago. compared with 933 million minutes on ® Video Content 14 . according to Nielsen.eMarketer. November 2008 & April 2009 (minutes per viewer and % change) November 2008 2-11 12-17 18-24 25-34 35-49 50-64 65+ 50 78 151 237 164 100 27 April 2009 122 129 379 353 416 284 151 % change 143% 65% 151% 49% 154% 184% 232% Note: home and work locations Source: Nielsen Online. If these experiments are deployed without regard to potential consumer backlash. if Web video and news portals are smart about how they monetize their content—for example. NBC. "VideoCensus" as cited in press release. Hulu 3.

Mobile video Internet-enabled TV (i.9% 45.Future Trends Quality A study by MarketingSherpa confirmed the widely held view that picture quality is key to the success of online video. September 2008 (% of respondents) <26 Quality of picture Speed of download/streaming Lack of interruptions Ease of watching downloaded video on your TV screen instead of the computer Ability to watch HDTV 74% 71% 69% 52% 35% 27-38 77% 73% 70% 65% 47% 39-54 72% 69% 65% 54% 43% 55+ 67% 60% 56% 47% 41% A key to this type of technology integration will be cooperation between content owners (which are interested in monetizing their content on as many platforms as possible) and cable systems (which have a vested interest in preserving the status quo of subscription-based viewing on TV sets). senior VP of business development. 100585 100585 www. iStreamPlanet.” —Randy As broadband penetration increases and compression technology improves. in an interview with eMarketer.3% “Now you’re seeing people watching content for longer periods of time." December 2008 103553 103553 www. Across every age group surveyed.TVs and cable systems—and content owners will need to provide a more seamless flow of content. 2009. These quality improvements will help spur the development of online video from a desktop activity to a more immersive experience. US consumers ranked it as the most important factor in the adoption of streaming video. and the reason is that there’s much higher-quality video. As this evolution unfolds.083 Source: MarketingSherpa. "2009 Media Consumption Survey. On July 14. Comcast had announced a similar arrangement with Time Warner called “TV Everywhere. These types of made-for-the-Web features are likely to emerge as a differentiator for online video providers. PC.e.” Essentially. content owners. "Online Video Survey Results." November 2008 as cited in "Marketing With Video Report: Online. TV & Mobile. IPTV) HD-quality delivery online Multiscreen video ( ® Video Content 15 . mobile) Other 4. June 2009 Although HD is not as important to consumers as overall quality.eMarketer. TV. In this regard. more and more content platforms—including YouTube and iTunes—are upgrading their infrastructure to accommodate HD streaming and downloading. Earlier. consumer electronics companies will need to build more connectivity into their devices. Important Factors in Adoption of Streaming Video According to US Consumers. Note: n=1. 2008 (% of respondents) Interactive video experiences 59.2% 38. Comcast and CBS announced a technical trial of a concept they are marketing as “On Demand Online.. 2008 Integration To achieve convergence between online video and traditional platforms.8% 40. Interactivity Another trend that will fuel the growth of online video is interactivity. We have definitely noticed a correlation between the quality of the video and how long someone watches it. Next Trend for Online Video According to US Marketers.. it means that Comcast customers participating in the test will be able to stream CBS content on the Web the same way they access it through their cable boxes.e. alliances between cable provider Comcast and content owners CBS and Time Warner are encouraging. technology providers will need to devise better ways to bridge the gap between computers. and a survey of US marketers by PermissionTV ranked interactive video experiences as the top future trend in online video. site publishers and mobile carriers will be able to deliver better quality to consumers. The major US sports leagues have experimented with streaming interfaces that allow users to choose among different camera angles and view multiple games simultaneously on split screens." December 17. by Age. Consumers have responded well to interactivity.” These arrangements point to a future in which content will carry over to all available platforms.1% Source: PermissionTV.6% 49.eMarketer.

If content owners or site publishers stray too far from these parameters.Conclusions Online video is on a roll.8 Note: *home. however. Endnotes Endnote numbers correspond to the unique six-digit identifier in the lower left-hand corner of each chart. 105369 |105370 Key eMarketer Numbers — Video Content 188 million 85% 59% US online video viewers in 2013. Instead. Companies across the online video spectrum will need to continue seeking ways to leverage each other’s strengths. industry leaders will need to keep the following priorities in the foreground. but they share a common interest in growing their audiences and expanding opportunities for brand marketers. June 2009 151. 2008-2013 2008 2009 2010 2011 2012 2013 Online video viewers (millions) % of Internet users % of population 135 70% 44% 144 72% 47% 154 75% 50% 165 78% 53% 177 82% 56% 188 85% 59% Note: individuals who download or stream video at least once per month Source: eMarketer. as noted. More experimentation is in order.*. cable companies. Continued success is by no means a guarantee. Consumers will expect no less than total availability. "VideoCensus" as cited in press release. Nielsen includes progressive downloads but excludes video advertising. the industry should focus on increasing content availability and nurturing existing revenue streams. Work together to grow audiences and attract marketers. 2009. so to keep the medium on a growth trajectory. The Web has created an environment in which content distribution is as simple as pressing a “forward” button. eMarketer defines online video viewers as individuals who download or stream video at least once per month. work and university locations. ad-supported content on Hulu. as Extended Note: comScore includes both streaming and progressive download video. the Web and mobile networks. site publishers and technology providers have different—often conflicting—priorities. 2009. After a period of experimentation in the early days of Web video. It also means expanded efforts by Hollywood and the major sports leagues to make more of their content available on the transactional models they have so carefully nurtured. cable. Preserve—and extend—current monetization models. with the ultimate goal of delivering a seamless. up from 144 million in 2009 % of US Internet users who will be online video viewers in 2013. July 2009 105369 US Online Video Viewers and Penetration. are in the driver’s seat. Citation: comScore Video Metrix as cited in press release. June 2009 105642 105642 www. July 2009 105370 105370 www. content owners need to reach their audiences on all existing platforms— Extended Note: eMarketer defines an Internet user as a person of any age who uses the Internet from any location at least once per month. they threaten to derail the course of online video. To maximize market opportunities.7 144.eMarketer. That means more premium. 105642 Comparative Estimates: US Online Video Viewers. monetization vehicles have reached a state of equilibrium. compelling online video experience to the consumer. June 2009 eMarketer. Nielsen Online. 2009 (millions) comScore Inc. Population estimates used to calculate penetration rate are based on US Census Bureau data. Time Warner and CBS have begun doing. with the exception of live sports and feature films. various. up from 72% in 2009 % of US population who will be online video viewers in 2013. excludes video server networks.0 133. July 2009 Nielsen Online**. Live by the precept that content is king. and its future looks as bright as its recent past. on the Web or on the go. June 11. not distributors. Content owners. **data for May 2009 Source: eMarketer.eMarketer. July 2009. This means that content owners. data for April 2009. up from 47% in 2009 Note: individuals who download or stream video at least once per month Source: eMarketer. June 4. whether in the home. YouTube and other portals. ® Video Content 16 . Most content is funded through ad-based models. The charts from the report are repeated before their respective endnotes.

and About eMarketer eMarketer is "The First Place to Look" for research and analysis on digital marketing and media. A Trusted Resource eMarketer serves as a trusted. or e-mail sales@emarketer. eMarketer analyzes information from over 3. cutting through the clutter and hype–helping businesses make sense of the numbers and YuMe YouTube Contact eMarketer. eMarketer's products and services help companies make OpenBox Technologies To learn more about subscriptions to Hulu http://www.nielsen.break. third-party resource. articles and the most comprehensive database of online marketing statistics in the http://www. and brings it together in Metacafe iStreamPlanet http://www. NY 10004 Toll-Free: 800-405-0844 Outside the US: 212-763-6010 Fax: 212-763-6020 OVGuide http://www. 75 Broad Street 32nd floor New York.000 sources.Related Information and Links Related Links Nielsen http://www. more informed business decisions by: ■ Streamlining research sources and reducing costs ■ Eliminating critical data gaps ■ Providing an objective.ovguide. Inc.hulu.metacafe. bird’s eye view of the entire landscape ■ Better deploying and sharing information across the company ■ Building solid business cases backed up by hard data ■ Reducing business risk ■ Saving valuable time comScore http://www. Report Contributors Susan Reiter Joanne DiCamillo Amanda Green Dana Hill Jared Jenks Chris Keating James Ku Nicole Perrin Allison Smith Managing Editor Production Artist Staff Writer Production Artist Numbers Editor Senior Researcher Data Entry Associate and Production Artist Copy Editor Senior Editor ® Video Content 17 .yume.istreamplanet. call 800-405-0844 (outside the U. call 001-212-763-6010).

Sign up to vote on this title
UsefulNot useful