The lines are blurring between traditional TV content and online video as viewers seeking entertainment turn to whatever screen is at hand, whether it's a tablet or a smartphone.
Tablets last year had a 110% surge in video viewership, while smartphones experienced an 87% increase, according to Ooyala, a Silicon Valley technology company that helps deliver online videos to more than 200 million unique viewers per month on behalf of ESPN, Miramax and other media companies. This trend will only grow, says Ooyala founder Bismarck Lepe, who projects that during the next five years, the number of people accessing videos on their smartphones will expand tenfold.
What's driving this growth? In a word: quality. "In the first wave of online video, people were interested in access, turning to torrent sites if they couldn't find the content elsewhere," Lepe says. "The second wave was about ease of use, with iTunes and other legitimate services making it easy for people to get content. Now we're in the third wave, where people are turning to high-quality content." That includes premium content like Hollywood movies and such live events as professional sports, concerts and award ceremonies-all of which led viewers to spend more time on average with online videos last year.
With eyeballs comes advertising. Video ads were the fastest-growing category of online advertising, with U.S. ad spend increasing 46% to $2.9 billion last year, according to eMarketer estimates. Following is a summary of the trends from Ooyala's 2012 Global Video Index.
1. Go live. Live videos were watched 18 times longer on desktop computers and five times longer on tablets than recorded videos in the fourth quarter. Think awards shows, live concerts and sports games.
2. Go long. Long-form videos (lasting longer than 10 minutes) accounted for 57% of viewing time on PCs, 63% on tablets and 82% on connected TVs (CTV) or gaming consoles (GC) in the fourth quarter. Why? Premium content-movies, TV shows and concerts-is driving this trend.
3. Go big. The bigger the screen, the longer the engagement. About 44.6% of online videos on connected TVs (CTV) were played all the way through, compared with 41.1% of videos on PCs, 38.1% on tablets and 32.9% on smartphones. That said, video consumption on smaller screens is growing rapidly.
4. Go mobile. Video viewing on mobile devices, including tablets, doubled its share from slightly more than 4% of all hours watched online on Jan. 1, 2012, to more than 8% by the end of the year.
5. Go multiple operating systems. Android, which began 2012 with less than 2% of mobile viewing time, ended up capturing 19% for the full year, while iOS devices accounted for 68% of mobile viewing time. Android is expected to continue to gain on iOS for mobile video this year, and Lepe projects that the two operating systems will end up neck and neck by the end of 2013.
6. Go branded. One doesn't have to be Orson Welles to make compelling videos. Product clips are also engaging viewers. This is especially true during the year-end holidays, when shoppers are seeking product information. The percentage of people who click on a brand or product video when presented with one surged from 29% on Oct. 1 to 55% on Dec. 16.