ABI Research, a market research firm, recently noted that the number of people watching online video by way of a Web browser nearly doubled from last year's figure.
According to ABI, 32 percent of U.S. consumers viewed online video through their browsers last year, compared to 63 percent this year. This rapid growth is mainly attributed to the wider range of ad-supported rich content made available online (especially on portals and social networks), as well as the increasing adoption of broadband connections.
“Broadband speeds have continued to increase at the same time that Hollywood has decided online distribution is a legitimate monetization opportunity that will increase total return on their video assets, and expand audiences,” said research director at ABI, Michael Wolf. “At the same time, easy to use content creation tools are being put into the hands of consumers and this has effectively created new forms of communication and entertainment.”
While short videos are the focus of big sites like YouTube, full television episodes and movies are attracting bigger attention from viewers, advertisers and content owners alike. Hulu.com is a prime example of this trend. The video aggregator offers current, full episodes of many popular TV shows, while also offering full-length feature films. These are made available to users at no cost, thanks to its ad-supported business model.
Nearly half of the consumers 25 and younger said they watched TV episodes or movies online at least once a month, while 53 percent of those between the ages of 25 and 29 said the same.
A viable business model for the online video realm is beginning to take shape, and that’s great news for advertisers and content owners alike.
However, online video ads have been known to cost much more than their display- or text-based counterparts. eMarketer, referring to research conducted by Bain and Company for the Interactive Advertising Bureau (IAB), points to the average CPM rate for online video ads at seven publishers as $43, which is almost three times as much as the average display CPM of $15.
CPM rates for online video ads range wildly from anywhere as low as $10 to as high as $100.
There are reasons to expect CPM rates to drop, as the initial charm and glow of online video wanes and as advertisers observe that online video viewers are less likely to watch video ads than traditional TV viewers.
Sources:
http://www.webpronews.com/topnews/2008/09/29/online-video-viewing-doubles
http://news.cnet.com/8301-1023_3-10052220-93.html
http://www.marketwatch.com/news/story/number-us-online-households-watching/story.aspx?guid={B917352B-C257-4FB3-AE79-85227553EE4C}&dist=hppr
http://www.clickz.com/showPage.html?page=3631009
Jason Hahn
e: jhahn221@gmail.com
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