While 2016 has been a tough year in many aspects, the video-on-demand (VOD) services provider space is flourishing like never before. A broad view of the space shows a clear rise in subscription video-on-demand services like Netflix and Hulu, but a more nuanced analysis shows a surprising jump in ad revenue from set-top boxes.
FreeWheel, the Comcast owned advertising-technology company, recently released a study showcasing the rapid growth of set-top advertising views. If you look back, you will start to see trends: desktop to mobile and now mobile to set-top boxes. People are spending more time gathering in the living room to watch their content; as is evidenced by the 38% set-box viewership compared to the 36% reported for desktops. While desktops/laptops still hold the highest share of VOD ad views (36% with an 11% increase this year), set-top boxes are beginning to catch up.
As more people continue to emphasize their desire to watch premium content on larger screens, i.e. living room televisions, we will continue to see the gap between desktop VOD ad views and set-top boxes shrink. This past year alone, set-top box VOD ad views are up 103% year-over-year. While that only puts their total contribution to ad views at 16%, the increase is unprecedented, and shows no signs of slowing down.
While it is important to look at the rise of ad views on set-top boxes in particular, we also need to take the time to look at the overall state of ad views across all platforms. In the same Q3 Video Monetization Report from FreeWheel, we see that total advertising views are up 28% year-over-year. This is due, in a large part, to the popularity of dynamic ad insertion. These dynamic ads allow VOD service providers to choose which ads are shown when viewing content. This targeted approach allows consumers to only see ads that are deemed relevant to them, directly leading to the overall increase of advertising views.
Other interesting numbers stemming from this report include:
- A 37% increase in total video views
- A 60% increase in live-content viewers (due in a large part to the Olympics).
- 18% increase in long-form content viewers
- A 31% increase in short-form content viewers (likely due to US election coverage).
The proliferation of dynamic ads and the knowledge that set-top boxes are quickly becoming one of the more popular places for people to consume their video content, makes this an interesting space to watch moving forward. According to a Huffington Post interview of FreeWheel’s SVP of Client Services Mike Lawlor the living room will be a big focus for FreeWheel in the coming year. We’ll see how it works!