Digital Revs Hit $8B In 2013, Shadows TV's $150B Gain

by , Jan 21, 2014, 4:18 PM
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Last year, how did digital video dollars compare to TV dollars? TV revenue rose $7 billion to $150 billion, while digital revenue rose $2 billion to $8 billion.
 
Half -- or $4 billion -- of that digital money came from advertisers, while the other half came from subscription, according to a new report from Needham & Co.
 
As for getting a bigger share of TV dollars in 2014, Laura Martin, senior analyst at Needham & Co., suggests: “All video must think of itself as omnichannel, and therefore the nomenclature of TV content vs. digital videos should merge.”
 
Last year, U.S. video revenue growth -- both offline and online -- reached approximately $158 billion, which represented a 6% increase over 2012. This year, U.S. video revenue growth -- both offline and online -- should accelerate to 8%, implying revenue of $170 billion, driven in particular by the economic recovery.
 
Faring especially well, Martin and her colleagues expect YouTube’s U.S. video gross ad revenue to be approximately $2.6 billion in 2014 -- up from $1.6 billion in 2013 -- driven largely by new brand advertisers that require a Nielsen rating.
 
Needham expects the continued rollout of TV Everywhere and video-on-demand services to result in about $10 billion of incremental ad revenue -- $2 billion of which will be seen in 2014 -- if DVR views can be shifted to new platforms over time, because commercials generally cannot be skipped.
 
Needham’s research suggests that video and mobile advertising revenue will be the fastest-growing segments in 2014. As such, the investment bank is particularly bullish about Facebook.
 
“We believe that FB’s and Instagram’s video products will drive faster revenue growth than expected, implying upward earnings revisions, because FB can create video products which achieve better targeting combined with social, community and a positive user experience,” Martin writes in the new reports. “In addition, their closed ecosystem lowers the risk of downward pricing pressure owing to commoditization (a key sector risk).”
 
Other companies that Needham expects to benefit from the digital video boom include Netflix and CBS, the latter because 2014 is a political year. The bank sees the media as particularly well positioned to capture political ad dollars.

2 comments on "Digital Revs Hit $8B In 2013, Shadows TV's $150B Gain".

  1. Walter Sabo from SABO media
    commented on: January 21, 2014 at 5:37 p.m.
    HITVIEWS was the first company to deliver brand messages inside web star content.
  2. Bobby Campbell from Adkarma
    commented on: January 22, 2014 at 10:56 a.m.
    150 Billion dollars to be disrupted by streaming content and digital ads thats a huge opportunity.

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