1、 #FreeWheelVMR Q3 2017 FREEWHEEL VMR REPORT 1 THE QUARTERLY BAROMETER OF THE INDUSTRY DRIVING VALUE THROUGH PREMIUM VIDEO 2 Q3 2017 FREEWHEEL VMR REPORT #FreeWheelVMR Q3 2017 #FreeWheelVMR Q3 2017 FREEWHEEL VMR REPORT 3 FROM THE AUTHORS When it comes to video, viewers have more choice than ever in t

2、erms of what, where, when, and how they consume content. At the same time, advertisers have a wider array of channels through which they communicate with their intended audience. Premium publishers have responded to the increasingly competitive landscape by improving the value they deliver to both c

3、onsumers and advertisers. They have made content available on a menagerie of devices, both on-demand and live, and through both traditional and new-to-market distribution partners. For advertisers, they continue to offer a brand-safe environment alongside high-quality, engaging, professionally produ

4、ced content. Publishers also continue to refine their ad models by experimenting with ultra-short six second spots, optimizing ad loads to drive higher engagement, using advanced data sets to make their sales packages1 more sophisticated, and developing standards through initiatives like OpenAP2 to

5、streamline audience- buying for brands. This quarter, we explore the positive outlook for premium video publishers, as they aim to provide differentiated solutions and increasingly work together to rebuff the “pretenders to televisions video advertising crown”3: Premium video ad views grew 24% year-

6、over-year, driven by increased viewership and monetization on live and full-episode content Set-top box video on demand (STB VOD) took the #1 growth spot in Q3 2017, growing by 54% to claim 20% share of premium video ad views Programmatic solidified its position in the publisher toolkit, comprising

7、a 13% share of monetization in Q3 2017 and growing at a rate of 19% year-over-year Syndication through Multichannel Video Programming Distributor (MVPD) channels increased by 67% year- over-year as publishers increase investment in platforms that offer the greatest transparency and control Premium v

8、ideo solidified its value proposition as an engaging destination for both brands and consumers, achieving a mid-roll ad completion rate of 98% in full-episode content Though desktop still reigns in Europe with 35% of ad views, increasingly popular over-the-top (OTT) and STB VOD devices are poised fo

9、r a coup with a combined share of 34% Premium video continues to grow at a double-digit pace, even in the face of mounting competition. Read on as we cover the latest our industry has to offer. Ying Wang Director, Advisory Services Miruna Dogaru Lead, Advisory Services (EU) Kimberly Goughnour Associ

10、ate, Advisory Services Jeremy Scher Associate, Advisory Services 1. “NBC Commits to $1 Billion in Ad Deals that Move Beyond Nielsen Guarantees,” (March 2017). Retrieved at report-tv-upfront/nbcu-commits-1-billion-ad-deals-move-nielsen-guarantees/308142/ 2. “Turner, Viacom and Fox Debut OpenAP Ad Tar

11、geting Plan to Broader View,” (April 2017). Retrieved at viacom-fox-open-ap-advertising-digital-targeting-1202026262/ 3. “The State of Video 2017,” (November 2017). Retrieved at 4 Q3 2017 FREEWHEEL VMR REPORT #FreeWheelVMR #FreeWheelVMR Q3 2017 FREEWHEEL VMR REPORT 5 Q3 2017 CORE OBSERVATIONS THE MO

12、ST DEFINITIVE DATA AVAILABLE ON PREMIUM VIDEO UNITED STATES 6 Q3 2017 FREEWHEEL VMR REPORT #FreeWheelVMR CORE OBSERVATIONS / U.S. CHART 1 TOTAL VIDEO START AND AD VIEW GROWTH, U.S. Q3 2016 VS Q3 2017 24% YEAR-OVER-YEAR AD VIEW GROWTH 30% YEAR-OVER-YEAR VIDEO START GROWTH NEW DISTRIBUTION PARTNERSHIP

13、S AND DIFFERENTIATION DRIVE GROWTH P remium video advertising grew across content types, devices, and sales channels in Q3 2017. Video ad views grew 24% and video starts increased 30% compared to Q3 2016. The higher growth of video starts relative to ad views indicates that premium publishers still

14、have more opportunity to convert viewership gains into advertising impressions. As publishers invest in making their content available across more platforms and build compelling viewing experiences for consumers, advertisers consistently turn to premium video to reach those engaged audiences. During

15、 this quarter, which marked the start of the new fall season of TV programming, clips, full episodes, and live streamed video all generated more ad views compared to the same period last year. Full episodes produced the largest share of ad views as well as the highest growth of any content format, p

16、ropelled by the continued ascendance of OTT devices and an increased monetization of STB VOD inventory through dynamic ad insertion. Both those platforms are dominated by long-form, full-episode viewing that provides the immersive, lean-back experience that viewers seek when switching on their telev

17、ision set. #FreeWheelVMR Q3 2017 FREEWHEEL VMR REPORT 7 4. “Why Now? Turner Stresses To Industry: Change Now Or Get Left Behind,” (October 2017). Retrieved at Increased ad monetization of STB VOD content, which grew 54% year-over-year in Q3 2017, highlights the importance distribution partners have

18、in reaching new audiences and opening up new revenue opportunities. Premium publishers are building on their television carriage agreements with MVPDs by making content available for on-demand consumption and dynamic ad insertion across set- top boxes and TV Everywhere platforms. By working together

19、 to make content accessible in more places, premium video publishers and distributors create increased value for consumers and are more likely to keep them within the television ecosystem. In addition to delivering better experiences to viewers, premium publishers have become more sophisticated in t

20、erms of how they drive value for advertisers. More publishers now offer their inventory to advertisers through both direct and programmatic sales channels, which allows buyers to apply their data and execute campaigns with greater automation. In Q3, programmatic ad views grew 19% year-over-year, the

21、 strongest growth rate of any quarter in 2017. Publishers are also investing in new ways to allow advertisers to directly target audience segments. As the consumers needs and advertisers goals continue to evolve in frequently opposing ways, premium video publishers must increasingly work to compete

22、with mass market digital platforms. “We cant revolutionize advertising if we are all working in silos,” said Donna Speciale, President of Ad Sales at Turner, which is one of three programmers behind the OpenAP initiative. “We needed partners like Fox and Viacom to raise their hands and understand th

23、at when this is successful, we and our partners win. Television is a platformwe all own just a piece of it”4. PUBLISHERS AND DISTRIBUTORS COLLABORATE TO RETAIN VIEWERS IN AN INCREASINGLY COMPETITIVE MEDIA INDUSTRY, GROWING OVERALL MONETIZATION BY 24% 8 Q3 2017 FREEWHEEL VMR REPORT #FreeWheelVMR CORE

24、 OBSERVATIONS / U.S. FULL EPISODES AND SIMULCASTS POWER PREMIUM VIDEO F ull episodes and live streams, which together drove 80% of premium video ad views, experienced double-digit growth in Q3 2017. Full-episode ad views increased by 29% year-over-year, further solidifying its place as the content f

25、ormat with the highest market share of ad views. Live monetization, which consists of digital simulcasts of linear TV broadcasts as well as digital- only events, grew by 26% to claim just under a quarter of total ad views. Despite only accounting for 25% of total live ad views, live news and enterta

26、inment simulcasts doubled their share of ad views this quarter. News and entertainment publishers are increasingly taking advantage of IP-based streaming TV services that provide new platforms for distributing their content live. In Q3 2017 ad views for short-form clips grew by 10%. Entertainment, s

27、ports and news content all made a relatively even share of these short-form ad views. Many publishers are also using clips as trailers or recaps to attract viewers to full episodes and live content. In the attention economy, short videos offer snackable viewing that delivers high reward for relative

28、ly small investment. CONTENT + DISTRIBUTION NEWS AND ENTERTAINMENT DRIVE GROWTH IN LIVE STREAM MONETIZATION, INCREASING AT 113% AND 99% RESPECTIVELY #FreeWheelVMR Q3 2017 FREEWHEEL VMR REPORT 9 CHART 2 CONTENT COMPOSITION AND GROWTH BY FORMAT AND VERTICAL, AD VIEWS, U.S. Q3 2016 VS Q3 2017 Clips (0-

29、5min.) Full-Episodes (5+ min.) Live Entertainment Sports News FULL- EPISODES 93% 4% Entertainment Sports News 8% 74% 18% 3% Entertainment Sports News 23% 39% 38% Q3 2016Q3 2017 CONTENT FORMAT COMPOSITIONCONTENT FORMAT BY VERTICAL (Q3 2017 ONLY) CLIPS LIVE 24% 54% 22% 57% +29% YOY 20% +10% YOY 23% +2

30、6% YOY 10 Q3 2017 FREEWHEEL VMR REPORT #FreeWheelVMR CORE OBSERVATIONS / U.S. A s viewers have more choice in not only what to watch but where to watch it, premium publishers invest to keep viewers in the television ecosystem by expanding what is considered “TV.” Over the last four years, the landsc

31、ape of premium video rapidly evolved from one centered around smaller devices to one anchored to the big screen. In Q3 2017, OTT devices and STB VOD accounted for half of dynamically delivered premium video ad views. These devices, which provide an alternative route for viewers to access on-demand a

32、nd live content on their television screens, fuel the growth of streaming services, which in turn drive even more consumption and monetization opportunities within their ecosystems. Between 2013 and 2016, the ad view share of OTT in Q3 doubled every year. In Q3 2017, OTT was again the device platfor

33、m with the largest number of ad views with 29% share and 47% growth year- over-year. According to forecasts by eMarketer, 168 million U.S. consumersabout two-thirds of the adult populationwill watch video through a connected television device this year, an increase of 10% over 20165. As a sign of th

34、e continued strength of these platforms, OTT device manufacturer and platform operator Roku went public in late September. Roku increased its reach by not only producing its own hardware but also striking deals with other device manufacturers to build its operating system into their devices. Over th

35、e last year, Roku went from 0% to 8% of the U.S. smart TV market and is capitalizing on their growing user base to drive revenue through advertising and partner revenue shares6. STB VOD took the #1 growth spot in Q3 2017 growing by 54% to claim 20% share of premium video ad views. In the last year,

36、many premium publishers increased dynamic monetization of ad inventory on set-top boxes as a way to capture revenue from viewing beyond the C3 and C7 windows. Smartphones and tablets continued to maintain their stable shares, together accounting for 23% of ad views in Q3 2017. While desktop has the

37、second highest share of ad views at 28%, it has steadily declined in share each year since 2013 as other platforms enter the television ecosystem to deliver additional content and value to consumers. As viewing options continue to expand and diversify, no single platform will dominate the way that d

38、esktop once did as viewers are able to customize their consumption to fit their environment. VIDEO BELONGS ON THE BIG SCREEN CONTENT + DISTRIBUTION 5. “168 Million Will Watch Connected TV in the US This Year,” (July 2017). Retrieved at Connected-TV-US-This-Year/1016233 6. “How Advertising Could Be R

39、okus Growth Engine,” (September 2017). Retrieved at rokus-growth-engine/ #FreeWheelVMR Q3 2017 FREEWHEEL VMR REPORT 11 CHART 3 AD VIEW COMPOSITION AND GROWTH BY DEVICE, U.S. Q3 2013 Q3 2017 86% 2% 8% 4% 73% 6% 14% 7% 52% 6% 13% 19% 10% 36% 16% 22% 17% 9% 28% 20% 29% 15% 8% COMPOSITION SHARES BY QUAR

40、TER OTT DEVICE STB VOD* TABLET SMARTPHONE DESKTOP Q3 13Q3 14Q3 15Q3 17Q3 16 0% YOY +54% YOY +28% YOY +7% YOY +47% YOY * FourFronts STB VOD and Canoe Phase III integrations 12 Q3 2017 FREEWHEEL VMR REPORT #FreeWheelVMR J ust as no single device platform dominates viewing, no single content type dispr

41、oportionately dominates any particular device platform, with the exception of STB VOD. Clips, full episodes and live streams all contribute to each device platforms unique value proposition. In Q3 2017, OTT had the highest share of live ad views (37%) of any platform. Live contributed to 30% of desk

42、top ad views and 17% of smartphone and tablet ad views. The fact that live streams account for nearly one-fifth of all monetization on smartphones indicates that quality content will draw users to even the smallest of screens. Setting aside STB VOD, which is entirely long-form content, full episodes

43、 made up the most ad views on tablet devices (61%). While most of the recent attention around “lean back” viewing has focused on the television, tablets are still an important source of long-form entertainment and are easy to use for consumers of all ages. Full episodes make up 55% of OTT ad views a

44、nd 45% of smartphone ad views, notably higher than the 31% on desktop. This suggests that smartphones arent just used for clips. With improved functionalities and streaming speeds, mobile devices will play an increasingly important role in extending the reach and durability of television content. TH

45、E MAJORITY OF MONETIZATION ON MOBILE DEVICES ORIGINATES FROM LIVE AND FULL EPISODE CONTENT #FreeWheelVMR Q3 2017 FREEWHEEL VMR REPORT 13 CHART 4 CONTENT COMPOSITION BY DEVICE, AD VIEWS, U.S. Q3 2017 Clips (0-5min.) Full-Episodes (5+ min.) Live 37% 17% DESKTOP/LAPTOP 39% 31% 30% TABLET SMARTPHONE OTT

46、 DEVICE STB VOD 100% 8% 55% 38% 45% 22% 61% 17% 14 Q3 2017 FREEWHEEL VMR REPORT #FreeWheelVMR P ublishers syndicate content to off-domain platforms as a way to grow audiences, scale, and earn extra revenue on popular library content. However, premium publishers largely opt for protection and safety,

47、 even if they risk losing some scale in the process. Over time, we have seen publishers shift away from long-tail distributors, decreasing monetization on the platform by 55% year-over-year in favor of syndicating through trusted MVPD partnerships. In Q3 2017, syndication through trusted MVPD channe

48、ls increased by 67% year-over-year. MVPD channels offer the greatest transparency and control, as they are established partners with whom premium publishers have long-standing linear distribution agreements. The rise of virtual MVPD and OTT subscription services offers premium publishers new ways to

49、 collaborate and expand distribution through these partnerships. Many of these services aim to replicate the “one stop shop” offered by traditional MVPD bundles. BRAND SAFETY PARAMOUNT AS PREMIUM REACHES FOR NEW AUDIENCES CONTENT + DISTRIBUTION SYNDICATION ON MVPD PLATFORMS GREW BY 67% YEAR-OVER-YEAR, SHOWCASING THE IMPORTANCE OF HIGH-QUALITY DISTRIBUTION CHANNELS AS NEW