Media companies looking to catch online video wave need to start paddling

By Jim O'Neill on Dec 09 2014 at 7:15 AM
Media companies looking to catch online video wave need to start paddling

It’s becoming commonplace to look at various year-over-year metrics that quantify the way online video and Internet TV is being consumed and to expect growth of 30% or 40% or more.

But, what we may not be seeing or, perhaps, appreciating, is the speed at which the change is occurring, and the change in the magnitude of the growth.

Where 2X and 3X annual growth once could be explained away as “the law of small numbers,” increasingly we’re seeing that kind of growth not just year over year, but from quarter to quarter.

And, the numbers are becoming bigger and, thus, less susceptible to huge change… but it’s still happening.

Ooyala today released its Q3 2014 Global Video Index, an analysis of the billions of data points it collects from anonymized viewers in almost every country in the world, on devices ranging from mobile phones to connected TVs.

For the most part, the numbers show a steady, predictable change in viewing habits, like more long-form video being watched on every screen, an increasing reliance on tablets for consumption of videos 30-60 minutes in length, and a surge in video consumption on tablets and mobile phones.

But what it really is showing is acceleration.

For instance, less than a year ago, Ooyala used its data to forecast that mobile would make up 50% of all video view sometime in 2016.

In this quarter’s report, that forecast has changed to an expectation of that mobile would make up half of all views by the end of 2015… and that may be a moderate view.

In Q3, more than 30% of all video views were on mobile devices, that’s up 20% over Q2, but more than 400% since Q3 2012.

There are a number of reasons mobile is surging.

For one, it’s become an increasingly casual encounter. There’s more mobile video available, from more sources.

And, it’s even becoming less expensive to watch. In the past week, at least one published report has predicted that manufacturers would begin offering smartphones – complete with HD screens and LTE connectivity – for less than $65 by the end of 2015. That’s $65 to own, not multiple payments of $65.

Even the price of data plans continues to fall. Major American wireless operators are offering mobile data plans that include more data for less and free WiFi has become ubiquitous as well.

While much of that mobile growth has been attributed to Millennial’s attraction to all things mobile, it’s an attraction that’s spreading across all ages.

Increasingly, grandparents are just as likely to use a smartphone or a tablet as their children and grandchildren. But, what researchers also say is happening is that it’s becoming nearly as commonplace to see them accessing video on their smartphones and tablets.

That acceptance is also driving more content online. CBS, HBO and Showtime, for example, all announced OTT plans; and, there’s an array of operators planning OTT services, too.

For broadcasters and content owners, that mobile adoption has meant that there’s also more opportunity to monetize content, especially news and sports content that’s a primary component of mobile users’ video diets.

What it boils down to is that companies in the digital media industry are like surfers sitting on their boards waiting to make a decision on how to catch that big wave.

And, just like surfers, it’s all about timing. If they paddle to early the wave crashes down upon them; paddle too late, and the wave will pass them by. You have to paddle, and paddle hard at just the right time.

Start paddling.

You can download the Q3 2014 Global Video Index report.

Follow me on Twitter @JimONeillMedia, and on LinkedIn

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