TV and video delivered over the Internet has a huge and growing audience, but the lack of a simple, all-in-one solution may be limiting growth. The gap in the market paves the way for a vendor–perhaps Apple–to introduce a simpler solution that will spur a new growth cycle.
That’s the upshot of Adobe Digital Index’s (ADI) latest “U.S. Digital Video Benchmark” report (PDF). The report, based on 159 billion online video starts and 1.49 billion TV Everywhere authentications spanning from the second quarter of 2014 to the second quarter of 2015, also noted that TV Everywhere viewing is growing quickly. Marketers would be wise to take advantage by placing more buys for TV over the Internet, especially if they’re trying to reach so-called Generation Z consumers who were born after 1997, the report stated.
Share Of Viewing On Devices
While online video viewing is growing on PCs, smartphones, and tablets, not all of the growth is occurring at the same rate. In particular, tablets are lagging. When looking specifically at unauthenticated video (for which consumers don’t have to offer their identities to view the content), ADI found the share of viewing on tablets fell 21% year over year (YoY). Comparatively, the share of viewing on smartphones rose 20% YoY.
“In terms of overall online video viewing, tablets are taking a little bit of a breather,” said Matthew Roberts, ADI senior marketing analyst. Part of the reason is that tablet sales have slowed as more consumers use their smartphones for many things they did on their tablets, he said. “The screens are getting a little bit bigger, and your smartphone has a little bit more functionality that it didn’t have before, so we’re seeing it cannibalize some tablet viewing,” Roberts explained.
Tablets Still Strong In Terms of TV Viewing
For online viewing of TV-over-the-Internet sites, which do not require authentication, mobile accounted for 21% of viewing--a rise of 35% for smartphones and tablets combined, the report found.
The primary vehicle for watching TV sites is the PC. The frequency with which consumers watched video during their visits to these sites was an average of 1.68 starts a month on their desktops versus 0.44 for smartphones and 0.94 for tablets. That’s a 29% rise for tablets.
Content Of Choice
What are consumers watching on their various devices? When tuning in to TV sites, movies and TV shows ruled. Sites that offer such content had a 7X higher viewing frequency rate than those that offer a mix of news and sports.
Sites that specialize in news and sports “really need to make sure they have a rich library of video content in order to keep their viewers more engaged,” Roberts said.
Meanwhile, if you want to put ads in front of TV-over-the-Internet viewers, consider reality TV. Viewers of the genre see an average of 3.9 ads per episode, the highest of any genre. The lowest is comedy, in which viewers only see 2.1 ads. Drama experienced the largest YoY growth, at 83%.
Ad viewing is up across the board, however. “They’re sticking around and watching more of the content, so they’re being exposed to more ads. In certain cases, marketers are also inserting more ads into the content,” Roberts said. “Both of those factors are driving the increase in the ratio of ad viewing.”
The study also found that Generation Z—a.k.a. the “plural/post generation”—is swapping their iPads for connected devices, such as Apple TV and Roku. The amount of teens- and toons-themed TV Everywhere content viewed on such devices grew 153% YoY.
Generation Z also appears to be consuming a significantly higher amount of content. Overall, the viewing frequency of teens and toons content via TV Everywhere was up 81% YoY, and is now 6X higher than the average viewing frequency of other popular types of content.
Growth For TV Everywhere
Regardless of what type of TV show they’re watching, consumers were consuming more on their various devices. TV Everywhere viewing was up 63% YoY, according to the study. Some 12.7% of pay TV viewers were watching content on their devices in Q2 2015, a 19% jump over Q4 2014, though down slightly from Q1 2015.
Consumers were also watching content on TV-connected devices, such as Apple TV and Roku. Authenticated viewing via such TV-connected devices grew 110% YoY. Still, growth is slowing.
“What we’re starting to see is that potentially some of the friction in the process of setting up TV Everywhere or figuring out which device you want to use might be starting to cause a slowdown,” said Tamara Gaffney, principal analyst for ADI. “We think generally the demand is there, but we may have reached a tipping point where to get to the next level it needs to be simpler to sign in.”
Gaffney said since each TV-connected device offers a different array of content (you can’t get Amazon Prime service on Apple TV or Apple content on Roku, for instance), many consumers find the process too complicated.
“Everyone has a painful story of how they tried to watch something and they couldn’t and they gave up,” Roberts said. “It really needs to be a simpler process.”
Apple As Savior?
Drilling down, the report found that the iPad was the No. 1 device that consumers used to view TV Everywhere content, with some 22.3% of users employing Apples’ tablet device. Second on the list were PCs with 18.3%, followed by iPhones (18.2%) and Apple TV (12.8%)
Considering the popularity of Apple’s various devices, Apple accounted for up to 61% of TV Everywhere viewing, though there’s some overlap, Gaffney said. “You look at this, and you do see that, in general, Apple is quite dominant,” she said.
That installed base paves the way for an all-in-one solution from Apple. Rumor has it that Apple will make some sort of announcement in September about a streaming TV service, which could spur a major growth cycle for TV Everywhere, though Gaffney cautioned that such rumors have made the rounds before.
“It doesn’t take much for something to come along that makes everything so much easier to use that adoption goes into a hockey-stick pattern,” she said. “That could very well happen. That’s what happened with the iPhone.”
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Adobe Digital Insights publishes research on digital marketing and other topics of interest to senior marketing and e-commerce executives across industries. Research is based on the analysis of select, anonymous, and aggregated data from more than 5,000 companies worldwide that use the Adobe Digital Marketing Cloud to obtain real-time data and analysis of activity on websites, social media, and advertising.
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