Ooyala Q1 2016 Video Index Compares AVOD vs. SVOD Business Models For More Lucrative OTT Strategies
16 June 2016
The global report highlights the causes, effects and solutions for drop-off rates; how time-of-day and devices impact engagement; new programmatic and ad-reinsertion trends
SANTA CLARA, Calif. (June 16, 2016) -- Ooyala, a Telstra subsidiary and a leading innovator in premium video publishing, analytics and monetization, today published its Q1 2016 Global Video Index drawing insights from more than 3.5 billion video analytic events per day from 220 million viewers across the world. The report this quarter compares engagement trends between subscription video services (SVOD) and advertising video services (AVOD), helping premium content providers understand how viewership differs between the two business models to better inform monetization strategies.
The report analyzes the correlations between content length and drop-off rates as well as the impact of content recommendations to keep viewers watching longer. Further, the report shows the continued growth of premium, programmatic trading, the success of ad-reinsertion technology, the continued growth of mobile consumption, as well as time-of-day viewing patterns.
SVOD vs. AVOD:
The findings show a strong correlation between content length and engagement in each model, revealing opportunities for publishers to tailor their monetization strategies accordingly. For SVOD services, which are almost exclusively comprised of long-form content like episodic series and full-length feature films, nearly 100 percent of viewing across all devices is with long-form video, content 20 minutes or longer. However, consumption on AVOD differs significantly.
Smartphone and PC viewers prefer short-form content the most, at 66 and 55 percent, respectively. Tablets viewers spend little time with mid-form video, instead viewing is evenly split between long-form (43 percent) and short-form content (44 percent). Connected TV viewers watch long-form content 92 percent of the time with AVOD services.
The report also analyzes how consumption of AVOD and SVOD assets differ by device and content length. The findings show a near split in engagement between small and large screen devices. AVOD viewers spend 55 percent of their time on PCs, while SVOD viewers do the opposite, spending 55 percent of their time on mobile devices. This suggests SVOD services are more personal experiences and, therefore, favor more personal devices.
Opportunity with Programmatic & Ad Reinsertion:
Between Q4 2015 and Q1 2016, there was a 22 percent increase of premium content made available across the global user base of Ooyala Pulse SSP, Ooyala's programmatic trading platform for premium video. Combined with continued growth in programmatic activity from premium buyers, this led to a 74 percent increase in paid impressions. As a result, average CPMs in private marketplaces increased by 13 percent, notable as CPMs typically decrease in Q1.
The report also focuses on ad-blocking, its continued rise of global adoption across devices and the success of broadcasters and publishers using Ooyala's ad-reinsertion technology, Ooyala Unlock. Broadcasters impacted by ad blockers increased ad impressions by as much as 15 percent with Ooyala Unlock. Publishers in similar circumstances saw ad impressions increase by as much as 23 percent.
Engagement Trends:
The new Index takes a unique look at the trends, causes and solutions of video drop-off rates. The data shows across short-, mid- and long-form video viewers tend to drop off anywhere between 70 to 95 percent of completion depending upon device and content length. Short-form video sees the highest completion rate of 90 to 95 percent and PC viewers drop off sooner than on mobile devices regardless of content length. Quality-of-experience (QoE) is a cause as well as a solution for drop-off rates. The report finds a 0.2 percent or less buffer ratio, or the amount of time spent buffering versus watching, proves to be the most successful in keeping viewers engaged. Half of viewers drop from video when the buffer ratio is one percent, and 43 percent drop when it's 0.4 percent.
Content recommendations make a significant impact on viewer retention. Pulling data from Ooyala Discovery, the company's content recommendation technology, the report finds viewers will on average watch 40 percent of all content recommended to them, driving more views.
The TV revolution has reached an inflection point as already-complex issues now compound upon one another causing even more perplexing challenges for premium content providers. Everything from the quality-of-experience to buffer ratios, business model strategies and how to keep viewers engaged, success in today's TV landscape requires big solutions to big questions, said Ooyala Principal Analyst, Jim O'Neill. Having a data-driven and analytics-informed business is key in reducing the complexities and building a healthy, and lucrative video business.
More Q1 2016 Video Index highlights include:
-- Mobile viewing now represents 48% of all online view starts, up 14% from a year ago and up 129% from 2014.
-- Nearly one in five (18%) of all mobile views are now on tablets, marking the third consecutive quarter of growth for tablet viewership.
-- After being served recommended content, viewers will average a 10% organic lift in video viewing thereafter, leading to a 6-23% uptick of time spent on site.
-- During weekdays all devices ramp up in viewership synchronously in the morning, PCs outpace tablet and smartphones combined, but at night tablets and smartphones increase as PCs decrease.
-- During the weekends, interestingly, all devices share similar cycles: ramp up in the morning, maintain steady usage throughout the day and dip in the evening.
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Ooyala Q1 2016 Video Index Compares AVOD vs. SVOD Business Models For More Lucrative OTT Strategies 
