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FreeWheel Report: Digital Video Consumption Rises

On demand viewing of video continues to increase, as do the number of on demand ad views, according to the latest report from FreeWheel.

FreeWheel’s Fourth-Quarter Video Monetization report said that content views grew 20% in the quarter and ad views were up 17%.

Video views were up 26% in all of 2016 versus 2015. Ad views were up 24% for the full year.

“2016 signaled great things for the future of premium video. The importance of video as a compelling tool to engage audiences was highlighted as companies across the media ecosystem made it a top priority,” the report said.

“At the same time, there was increased acknowledgment that the ad experience is equally as important to consumers as the content, especially as video consumption shifts from desktop/laptop back to the TV," the report said. “Large events boosted viewership and pointed us to the future of video consumption where we’re seeing more live viewing occur over an internet connection across all genres. And automation of the sales process continued to grow, even as there was greater scrutiny of where ads ran due to high profile exposés of fraudulent activity in the ecosystem.”

FreeWheel, a division of Comcast, said that in the premium video it tracks, the number of commercials is going down amid concerns about the quality of the viewer experience. FreeWheel said the average number of mid-roll ads during live streamed ad breaks declined to 4.6 in the fourth quarter of 2016 from 6.2 in the fourth quarter of 2015.

Live viewing via streaming was up 36% full year, with big events including the Super Bowl, the Olympics, Presidential debates, political conventions and election night coverage being streamed by consumers. Short-form and long-form were both up 22%.

“Live digital content will continue to grow, as many traditional distributors and digital aggregators have announced plans for live TV skinny bundles,” the report said.

The device of choice for premium streaming video is increasingly the television set.

“In a three-year trend of device consumption in the U.S., our data shows that STB VOD and OTT devices have been the largest disruptors in the market, evolving from just 9% combined share in the fourth quarter of 2014 to 41% in the fourth quarter of 2016,” the report said.

While the year-over-year percentage growth remains consistent, the cumulative effect of these increases indicates just how much growth opportunity there is in premium video,” the report said. “As viewing continues to increase, structural changes are needed to keep up with that change. Technology, user experience, and monetization strategies all must evolve to support this continued growth.”

Sports volume on OTT grew 161% in 4Q of 2016 compared to a year ago and accounted for nearly one-third of all OTT ad views.

“News and sports drove the consumption of short form programming. In fact, for this quarter, short-form saw the largest growth in ad views at 33%, the highest growth rate seen in any quarter this year. In comparison, live grew at 27% and long-form at 5% in the fourth quarter,” the report said. “The confluence of the four major sports leagues’ seasons during the quarter, along with the U.S. Election, contributed to higher clip consumption.”

The report said that compared to the fourth quarter of 2015, sports was up 60% and news increased 58%. While short-form has traditionally been more of a focus for Digital Pure-Plays, programmers are increasingly utilizing clips as a way to build audience scale and affinity for their longer-form content, the report said.

Premium publishers are more selective about their use of programmatic technology to sell advertising. FreeWheel says that in the fourth quarter automated sales channels represented 7% of total ad views for programmers, compared to 27% for digital pure plays. According to an eMarketer study, 50% of all video advertising will have been sold programmatically in 2016.

Fraud is not a problem with the kind of premium video FreeWheel delivers. A FreeWheel investigation found that 99.99999% of traffic sent by the FreeWheel ad server did not match any of the IP addresses flagged by the WhiteOps report on video fraud.