Digital TV Video Biz Is Booming

As traditional TV platforms project small gains in their $70 billion business, new digital TV video businesses are looking at major hikes in the coming years to a smaller $4 billion business -- with cost per thousands seeing, at best, modest hikes.

According to eMarketer, digital video platforms will rise to some $4.14 billion by the end of this year, up from $2.93 billion in 2012. In three years, the new report says, the business will double to $8.04 billion.

The report looks at digital video advertising from impressions in in-banner, in stream, pre-roll, overlays, and in-text formats. Video ad formats vary widely, according to eMarketer, with offerings that are rarely uniform.

Digital video cost per thousands -- at least from premium video sites -- will rival those of traditional TV platforms. Traditional broadcast TV networks are around $35 CPMs for key 18-49 viewers, according to industry estimates.

Quoting Credit Suisse, eMarketer says digital video cost per thousands (CPMs) for mid-tier video sites in 2013 will be approximately $26, hitting nearly $33 for premium destinations.

But cost per thousands might not gain much in future years. The same Credit Suisse report notes that premium sites will drop to just around $31 by 2017. In addition, the average CPM for all video will drift a little lower to just under $25.

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