Ooyala's 2012 Global Video Index is Great News for Online Video Publishers

According to Ooyala's Global Video Index, "2012 was another historic year in online television," and by 2016, 1.5 billion people will watch online video. Ooyala released its 2012 Q4 video index report last week, which measures the monthly viewing habits of nearly 200 million unique viewers in 130 countries. The report found several key trends of its video publishers reflects the overall state of online video, such as live video matters, premium content matters on all screens, larger the screen = higher engagement, branded video viewing and conversion rates surged during the holiday season, mobile and tablet share doubles, and iPhone users watch twice as much video than Android users.


via Ooyala

Ooyala CEO Jay Fulcher says that three key themes stood out in the report.

 "First, live streaming is the new norm. Online viewers tuned in to the Tour de France, Wimbledon and the U.S. Presidential debates right as they happened, and the data shows viewers watch live video longer on all devices. Second, Tablet TV is surging. The share of tablet video viewing more than doubled last year, as mobile, social and video converged on a single device. And Smart TVs and Gaming Consoles continue to change the way people watch TV. New findings in this Video Index show how viewing patterns change seasonally."

The Lines are Officially Blurred

"One of the most important takeaway of 2012, is that the lines between traditional media and streaming media are really starting to blur," says Ooyala Co-Founder and President of Products Bismarck Lepe. 

It's not just about media being consumed across all devices, Lepe emphasizes, business models are also starting to blur. For example, Netflix is now going direct to consumers with original streaming content, and also going the traditional route by licensing its content to television companies in markets where it doesn't have a streaming business.

"We're probably going to see that 2013 and 2014 are going to be the tipping point period for this industry," says Lepe. "As technology improves and business models catch up to where consumers are obviously headed."

Video Consumption Trends Shift

Lepe says that for online video, we're in the middle of phase one and phase two. Distribution platforms like iTunes, Amazon and Hulu Plus have expanded their selection and made it easier to find and view premium content, replacing Torrent sites and the need for DVDs and physical media. The majority of streaming content is still consumed on smaller screens, but as more connected TVs make it into the home, people will move into the third phase of wanting to see streaming content on bigger screens, which is more of the traditional living room lean-back experience. 

Ooyala sees a spike in mobile video in places where public transportation is more prevalent, for instance, in Japan video consumption on mobile and tablets is more than double of that of the U.S. Viewers are watching video on the screens that are most convenient to them based on the availability of content and quality of service. 

Lepe also predicts that the smartphones war, between iOS and Android will shift over the next year to favor Android platform by 50%.

There's Still Work to Do

"There’s still a lot of work to do," Lepe says. "The industry has yet to agree on standards for online video ad measurement, making it difficult to demonstrate the efficacy of paid streaming content. Network speeds and data-caps also create institutional barriers between viewers and videos. In order for “online video” to fully transition to “online television,” media and technology companies must work together to find common ground in this new media landscape." 

Lepe's view of the online video industry, and specifically, the online video platform market, is that we'll continue to see the cookie-cutter, templated video platforms trying to compete with YouTube for free.

"We're very focused on the top end of the market," says Lepe, "where half a trillion dollars changes hands every year, either with episodic television content or theatrical content – and these companies have historically worked with large systems integrators and consultants to build the spoke systems. But the problem with the spoke systems is that they solve the immediate problem, because there isn't a roadmap that supports the long-term trajectory of a particular industry."

Lepe says Ooyala remains committed to its primary mission, to provide value to its customers with video analytics and monetization tools to help them personalize the video viewing experience across all screens, maximize audience engagement and increase revenue.

Key findings from Ooyala’s 2012 Global Video Index

Live Matters

• In Q4 2012, viewers watched live video 18X longer than VOD on desktops, 5X longer on tablets and 4X longer on mobile. 

Premium Matters on All Screens

• About one third of the total time spent watching tablet video last quarter was with premium, long form content running more than 60 minutes. 
• The percentage of time spent watching long-form video (over 10 minutes) on tablets increased 37% from Q1 to Q4 in 2012. 
• Publishers are fueling the growth trend by making more premium long form content available to consumers

Branded Video Consumption Surges Between Black Friday and Christmas Day

• Conversion rates for branded videos jumped 91% from the start of the quarter to their peak in mid-December. 
• There’s a huge opportunity for retailers, e-tailers and consumer brands to connect with online audiences between Black Friday and Christmas Day. 

Mobile and Tablet Share Doubles

• Measured together, the share of all hours spent watching streaming video on tablets and mobile hones increased 100% in 2012. 

 Home (and Online) For the Holidays

• Short-form video* viewing spikes on Black Friday and Christmas, presumably because people are unpacking and tinkering with new connected devices.
•  The amount of time people spent watching short-form video on Connected TVs & Gaming Consoles increased 500% in the two days following Christmas. 
• The share of time spent watching online video on tablets jumped 73% on Christmas

Phone Wars: iOS vs. Android

• Although Android phones are outselling iPhones globally, last year Apple users watched twice as much online video on their mobile phones.

Download the Global Video Index: 2012 Year in Review here.

Comparing Online Video Platforms – A Market in Transition

The Online video platform (OVP) market has matured over the last few years distinguishing itself from the free solutions by providing value added features, functionality and control. OVPs have made it easier for customers to buy their hosted video solutions vs. building it themselves. This infographic by Devious Media made the rounds over a month ago, and compares four of the top video management companies in the online video platform category, Brightcove, Kaltura, Ooyala and Longtail Video. While this is a just small sampling of the market and only scratches the surface of each platform's capabilities, it's important to know what to look for when choosing an OVP and what's available from each platform.

Kris Drey, Founder of free online OVP comparison service VidCompare, says we're seeing a market in transition and smart companies are adapting to the changes in the marketplace. Currently, there are 91 companies in the OVP market that he's tracking in his online interactive OVP directory. He says differentiation is key to standing out in the crowded field, and we’re beginning to see new business models arise in small pivots.

An OVP provider is typically a SaaS (software as a service) solution providing end-to-end tools to manage, publish and measure online video content for both on-demand and live delivery. The key components of an OVP include: content management, hosting, encoding, customized video players, analytics, syndication, interactivity and monetization through a variety of 3rd-party online advertising options.

According to a Frost and Sullivan report, World Online Video Platforms Market, six key vendors define the OVP space (and capture over 75 percent of the market), and more than 20 other vendors make more than $1.0 million a year each. The report sees the considerable opportunity for the OVP market which is set to grow 11 percent during 2010-2015 and has the potential to look very different in 3-5 years.

The Brightcove IPO Effect

If you follow the space, you know that the most notable news of late is the Brightcove's recent IPO. Ooyala CEO Jay Fulcher noted the significance of the Brightcove IPO in a blog post on the Ooyala website.

"This IPO is an important milestone in the evolution of online video technology and demonstrates that the category is now maturing," says Fulcher. "Brightcove will be the first of many online media firms to go public in the coming years. There’s tremendous potential for other players to innovate and monetize the online video realm. Accessing the public market is likely critical for Brightcove, and it’s great news for the streaming media universe in general."

So Many Choices, But How to Choose?

The differentiation of video workflows and toolsets are key for OVPs, since the standard features across platforms have become commoditized, with all the choices from current and new OVPs and offerings like Vimeo Pro. Brightcove has expanded its offering with its App Cloud development platform. Ooyala competes directly with Brightcove in the media and entertainment space and is known for its analytics and monetization solutions. Kaltura has a broad educational and open-source platform and offers both a free and hosted solution. Longtail Video is the home of the world-famous JW player and a leader in video management and delivery with Bits on the Run.

vzaar and Wistia are known for their clean user interfaces and affordable platforms for businesses, Twistage and Unicorn Media's extensible workflow management tools work with existing platforms. Sorenson Media has extended its industry-leading encoding software into a CMS for video professionals, RealGravity is focused on video content syndication, DaCast operates a live streaming SaaS platform, Buto.tv targets brands and marketers, Liveclicker has a comprehensive video commerce platform for retailers, Magnify.net is an industry leader in curation solutions, VMIX has both iPhone app and video platform solutions, VPFactory has customized players and affordable plans, KIT digital has a global video platform and has amassed a formidable customer base through its acquisition strategy, and the list goes on and on...

But with all the diverse offerings from the crowded OVP market, Drey says there' hasn't been much change or major points of differentiation among the 91 OVPs in the past 6 to 12 months.

"New OVPs have sprung up like VidCaster, and MediaCore, we saw RealGravity acquired by Scripps Networks and we've witnessed our first OVP IPO" says Drey. "But other than the fact that publishers have plethora of options there really hasn't been any major movement as it relates to technology innovation." 

The key to choosing an OVP, says Jan Ozer is to choose wisely because not all OVPs are alike. So most importantly, make sure it supports your business model. Ozer cites VidCompare as a great launching point for starting your search as well as testing the platforms through their free trials. He also just published a new Buyer's Guide: Online Video Platforms on Streamingmedia.com.

For a unbiased and detailed evaluation of the OVPs from the infographic and more, check out Charlie Davis' blog:
 • Online Video Platform Test Drive – Brightcove
 • OVP Test Drive – Kaltura (SaaS Version)
 • Online Video Platform Test Drive – Ooyala Backlot
 • OVP Test Drive – Longtail Video: Bits On The Run
 • Online Video Platform Test Drive – Limelight Video Platform

Also, check out my pal, Joe B's (@zbutcher) Online Video Provider (OVP) List. He's done a great job tracking and evaluating all the OVPs that have come to market and is curating it on Scoop.it.

To Be an OVP, or Not to Be? That is the Question

While it's easy to categorize all the companies into the same market, some OVPs in the space don't even see themselves as being just a video management company. In an interview with Charlie Davis, Ooyala co-founder and President of Products, Bismarck Lepe said:

"We don’t consider ourselves an OVP. Our video platform, Backlot, is just one of the many products and services we sell. Small to mid-sized companies are fine with a one-size fits all approach to video publishing, monetization and analytics, but the large broadcasters and operators require a lot more flexibility."  - Getting to Know Ooyala – My Interview with Bismarck Lepe — A Product Named Charlie

Bill Sewell of Wiredrive, an online media sharing service for business, thinks that OVPs are still not truly mainstream and well understood. Sewell says that the OVP market has similarities to the Digital Asset Management (DAM) market which he spent years in witnessing the same level of confusion.

"Clients have a painful purchase cycle - vendors promise the moon, the integrations become more complex and expensive and the client often ends up with unwieldy solutions they're stuck with for years... just in time to go through the same process again with a new vendor down the road," says Sewell. "If people don't understand the challenges of today's OVPs, how will they move towards the inevitable world of integrated SaaS technologies." 

The Growing Opportunity for Online Video Platforms

As the layers of the online video stack begin to flatten as Telcos and CDNs start to get into the OVP business we'll see an even greater transition in the market. Drey points out that we'll see some thinning of the OVP market and the innovative OVPs will focus on convergence in 2012.

"Users of online video will no longer have to sign multiple contracts with different vendors looking for CDN, OVP, AdNet, and monetization solutions."

According to Brightcove, there is a large and growing market opportunity for OVPs and it estimates the total addressable market to be approximately $2.3 billion in 2011, growing to approximately $5.8 billion in 2015. But as Dan Rayburn points out, with Brightcove's revenue of $63 million in 2011, it only captured 2.7% of the market, and that leaves a lot of high stakes opportunity for the rest of the OVP providers.

We'll see though, if the numbers play out.


Disclaimer: VidCompare is a sponsor of this blog

The Future of Online Video in Focus – Dan Piech, comScore

2011 was an exciting year for the online video, says Dan Piech, comScore Product Manager for Online Video, and really represented its growth into a mature market. One of the primary reasons was the increasing engagement of online viewers across a variety of measures in 2011. The number of Americans who watched online video content on an average day grew from 73.7 million in 2010 to 105.1 million in 2011, 43-percent increase. Piech shares his insights on the future of online video and highlights key findings from comScore's new report, 2012 U.S. Digital Future in Focus, which examines the trends in social media, search, online video, digital advertising, mobile and e-commerce, what they mean for the year ahead. The report is aimed at digital marketers, to help them understand the key trends shaping the digital media marketplace and bring the future into focus for their businesses.



More Viewers Streamed More Videos More Often

Piech says, the number of videos viewed each month also grew 44-percent from the previous year, such that there were 45.5 billion videos viewed in December 2011, up from 30.1 billion in December 2010. The impressive gains in online video viewing signaled a behavioral shift in how Americans are consuming video content, with increasing adoption of long-form video content as Americans watch TV shows and movies on-demand over the Internet. Also, by the end of 2011, the average number of minutes per video view also  rose from 5.0 minutes to 5.8 minutes with the average viewer watching 239 videos, up 37-percent from 2010.

Piech says, “comScore expects the number of videos viewed to continue to increase in 2012 with one of the primary driving reasons being an increase in quality, original, created- for-the-web content syndicated across platforms."

                               

Note: Long-Form video content is on the rise, reaching 6 minutes on average in January 2012, according to comScore's January 2012 U.S. Online Video Rankings released today.

YouTube Owns Nearly Half of U.S. Online Video Market

YouTube was at the top of the leaderboard with 201 billion video views in 2011, representing half the total video market with all other video sites (VEVO, Hulu, Yahoo! sites, Microsoft sites, Viacom Digital, AOL, Netflix, ESPN, Mevio, and others) totaling 221 billion. Many of YouTube's video views came from its Partner Program, which comScore was able to measure starting in July 2011.

"One of the key findings from that measurement", says Piech, "is that many companies like Machinima, Maker Studios, FullScreen, Big Frame and the Collective, have audiences that rival many television networks in scale, and yet in addition to that, they also have these audiences that are incredibly dedicated to the niche content that these YouTube partners are producing and also these audiences can participate in two-way conversations about the content these YouTube partners are producing. This creates a very effective ecosystem for relaying brand messages."

Video Advertising Continues Growth Trajectory

As the YouTube partner channels continue to demonstrate their ability to deliver millions of highly-engaged and loyal viewers each month, advertisers are starting to take notice because they want their ads adjacent to highly-engaging content. ut with TV ads, there has to be a balance between video content viewers want to watch and commercials for them stay engaged. Piech notes that comScore's data shows that online video ads are approximately 38-percent more memorable than TV ads in an offline environment. While comScore is confident that this growth trajectory to continue through 2012, certain factors like view tolerance for ads and the popularity of paid premium services will determine whether the ratio of video ads consumed across the Internet will grow over time.

Download the 2012 U.S. Digital Future in Focus Report

Many other trends that will impact online video in 2012 are discussed in comScore's free report, which you can download here: http://www.comscore.com/2012USDigitalFutureinFocus

Watch comScore's other videos from the report:
The future of e-commerce featuring Gian Fulgoni, comScore Chairman and Co-Founder
The future of mobile featuring Mark Donovan, comScore SVP for Mobile
The future of social media featuring Andrew Lipsman, comScore VP of Marketing and Industry Analysis

comScore is also hosting a live Webinar on Wednesday February 22nd at 2 PM ET. Eli Goodman, comScore Media Evangelist, will share key insights from the 2012 U.S. Digital Future in Focus in this a one hour webinar that will also include a Q&A session. Register now to attend.

Related: 
 • comScore Releases the “2012 U.S. Digital Future in Focus” Report - comScore, Inc
 • Putting the Digital Future in Focus – 5 Stories that Will Shape the U.S. Digital Industry in 2012
 (comScore Voices)
• comScore Releases January 2012 U.S. Online Video Rankings - comScore, Inc

About comScore
comScore, Inc. (NASDAQ: SCOR) is a global leader in measuring the digital world and preferred source of digital business analytics. For more information, please visit www.comscore.com/companyinfo.

Skytide's 7 Online Video Trends to Watch in 2012

In a recent white paper, 7 Online Video Trends to Watch in 2012, online video management analytics company Skytide outlined the emerging trends in the online video industry and the content delivery supply chain that serves it. If the last few years were any indicator of the hockey stick affect of rapid change within the video sector, 2012 promises to be full of twists and turns and major and disruptions. While predictions are a dime a dozen, they have much more relevance when coming from an industry expert and authority on the subject. I caught up with Patrick Hurley, VP of Marketing of the Oakland, California-based Skytide, and author of the white paper, to get an insider perspective on their online traffic projections, federated CDNs and why Telco CDNs will dramatically change the content delivery market. The white paper has been very well received, as Hurley noted, since it was first posted on Slideshare late last year where it's currently accumulated over 8,000 views to date and was featured among their 12 best presentations with predictions for 2012. It is also the number one search result on Google for video trends.



1. Online video traffic will continue to soar

Skytide says the first trend to watch in 2012 is that online via traffic will continue to soar. Hurley admits that while this is no big surprise, they have data to back that up, including Cisco's Visual Networking Index (VNI) that forecasts online video will account for 90% of all consumer IP traffic by 2013 and a compound annual growth of 32% from 2010-2015. Skytide's own large Tier 1 customers are very bullish on this and have seen growth rates exceed all industry expectations. Skytide is even more bullish and believes that it's possible for the coming years that online video traffic will grow 50% or more annually.

"The implications for that are really significant, for the Telcos and Communications Service Providers (CSPs)," explains Hurley. "Because that could compound an already serious problem that they have. They're caught in a vicious cycle."

The cycle starts with the fact that their legacy businesses (landline, telephony, etc.) which used to be their cash cows are really declining quickly and they can't count on them anymore. At the same time, consumers continue to have this insatiable appetite for online video, but that demand requires that the big Telcos, ISPs and CDNs invest heavily in capital expenditures to support their infrastructure. That would be great, if they could recoup those costs, but the problem is, the only thing their getting from online video consumers is a very modest monthly fee, which is your ISP bill, so they aren't able to monetize their capital expenditures.

Hurley says that CSPs need to extricate themselves from this vicious cycle and pursue new strategies. One of the trends we saw in 2011 will continue into 2012, says Hurley, and that is that the Telcos and cable companies are going to get into the content delivery business, which is an inherent strengths they can leverage as owners of the network infrastructure with direct relationships with end users and content owners. That helps them on both sides of the ledger and create new revenue streams.

2. Telco CDNs will make big waves

Owning the network is the biggest advantage that the Telcos have because they control the Quality of Service (QoS) over the last mile, and more importantly, there's a cost savings component there as well. In particular, CDNs like Akamai and Limelight have to lease the bandwidth from the network operator, and network operators don't have that issue.

Based on those advantages, we'll be seeing more of that in the next year, which leads to Skytide's next prediction, that Telco CDNs will make big waves in 2012. Over the last several years the Telcos have waded in the CDN waters slowly, but now they're diving in head first. Some of the world’s largest telcos have now deployed their own CDNs, which is diminishing the dominance of pure-play CDNs. Companies from outside the space (Amazon, Google) are getting into the CDN business and the trend by major content providers (Yahoo, Microsoft, Google) to operate their own in-house CDNs. Dan Rayburn lists many of them on his blog here: Updated List Of Carriers, Telcos and Pure-Play Companies In The CDN Business | StreamingMediaBlog.com.

3. Federated CDNs will finally shift from  
    concept to reality

The third prediction is that Federated CDNs will finally shift from concept to reality in 2012. This has been a hot topic of discussion at content delivery conferences over the last year, and Hurley says that's for good reason. As Federated CDNs move from concept to reality, it will cause a seismic shift in the CDN market.

"CDN Federation stands to be very disruptive, giving service providers an unprecedented opportunity to compete directly with market leaders like Akamai and Limelight in the global CDN arena."

In June of 2011, Dan Rayburn announced on his blog that a group of telcos had founded an Operator Carrier Exchange (OCX) to formalize the process and standards of interconnecting their content delivery networks. Just a few months later, Cisco announced at the CDN World Summit that it had completed a CDN interconnection pilot with several tier 1 telco providers (BT, KDDI, Orange, SFR and Telecom Italia).

In my conversation with Hurley, he skipped over the following three trends, but encouraged people to download the white paper to read more about how they'll be taking greater shape in 2012:

4. Adoption of Adaptive Bitrate protocols will grow 
5. IPTV providers & MSOs will extend reach into OTT models 
6. Multi-screen viewing will become the norm 


7. Online video advertising budgets will soar

And, finally the last trend is that online video advertising budgets will soar. Hurley says that it's created a virtuous cycle based on a confluence of factors that plays in its favor. First, technology is finally at a point where online video resolution and reliability is to the advertisers liking.

"Advertisers buy an audience," says Hurley. "They also buy adjacency to content and they have to have that in a quality experience, and that's what they're able to get now."

They're also able to to tap into new technologies like adaptive bitrate streaming which holds the promise of ad insertion into a live stream, and that mirrors the model of traditional TV advertising. But most importantly, advertisers go where the audience and the audience is increasingly going to tablets, mobile phones and laptops to watch online video. So that confluence of virtuous events is really poised make online video advertising budgets grow 27% in 2012.

To download the white paper, go to: Skytide website
Slideshare: 7 Online Video Trends to Watch in 2012

About Skytide
Skytide, the leader in Online Video Management Analytics, provides content delivery providers and digital media companies with the most complete operational view of their streaming video businesses, delivering the information necessary to make better-informed business decisions. Only Skytide's out-of-the-box analytics and reporting solutions can process massive amounts of disparate data sources and turn it into detailed reports in near real-time. Skytide is venture-backed and works with leading digital media and technology companies including: British Telecom, Broadpeak, Cisco, Clear Channel Communications, HP, Juniper Networks, Telecom Argentina, Telecom Italia, Telefonica and Telstra.

Update  2/21/2012: Revised copy, added numbers 1-7.