• by Jack Loechner , Staff Writer @mp_research, November 13, 2013

According to a joint study by Ovum and Avid, 71.5% of broadcast and studio executives believe that over 11% of average audience viewing time will be delivered by web services by 2017. More than a quarter of all respondents (consumers) predict that over 30% of audience viewing time will be delivered by web services in 2017, an increase of almost 10 times in just four years on rates seen in the US and Western Europe today. Broadcast and studio executives see these new web-delivered services as revenue drivers, with 91% of respondents citing multi-screen delivery as a key source of growth.

A second study surveyed consumers directly to identify patterns of consumer activity and their impact on monetization models for premium video content. The web based survey of 3,011 consumers across the US, UK, Germany, and Brazil, seeks to better understand issues such as:

• How are consumers discovering new shows, and is there any difference in viewing platform between discovery, engagement, and loyal viewing?
• With multi-platform delivery options, is media viewing becoming more personal, more social, or a combination?
• What motivates consumers to purchase content?
• How are consumers using VoD and digital video recorder (DVR) technologies, and what is the impact on ad viewership and attitudes toward advertising?

The paper reports on the results of this second phase of research and provides five key insights for media professionals into viewing behavior and monetization in a world of digitization and consumer control.

Research highlights:

1. In a rapidly evolving market where significant time and effort goes into developing new ways to approach audiences, the strongest driver of audience engagement is still high-quality content with outstanding image and audio rendering.

• Of respondents, 65% identified the visual and audio experience as a key driver of enjoyment.
• 66% watch ads if both the editorial content and the advertising content are high quality.

2. High-quality content is also the key to ad engagement: The quality of ad content is vital to driving ad recall. Of respondents:

• 47% recall ads because they are funny
• 32% recall an ad because they found the story engaging
• 31% recall ads that have well-developed characters

3. Delivering shows via online, social, and mobile platforms not only allows consumers to personalize their viewing experience, but also lets broadcasters move audiences to the platform that maximizes the value of media assets.

• Of consumers in this research, 14% are already testing out new shows on laptops, tablets or smartphones, while 30% are returning to appointment-based viewing once they have become fans.

4. Consumers will pay for archive content, but this demands that producers create effective metadata strategies.

• Of consumers, 37% are prepared to pay for old episodes of their favorite shows when offered in context, which is more than are prepared to pay a premium for news or scheduled entertainment content such as scripted or non-scripted reality.
• However, thought phase 1 of the research showed that while media producers could monetize as much as 33% of their archives to take advantage of those opportunities, most of that archived material is currently inaccessible.

5. Mass media events are increasingly experienced on the second screen. This emergence of the "digital water cooler" requires high-level, end-to-end workflows with an integrated capability to publish to second-screen web services.

• While watching the Olympics on TV, 63% of consumers with a PC, tablet, or smartphone were simultaneously looking at other scores or match information.

The study asked why audiences continue to watch TV ads, when there are so many opportunities to skip ads, change channel, or simply do something else on the second screen. Split by genre, high levels of engagement with sports and movies keeps audiences watching throughout the ad break. For kids and reality/entertainment, passive viewing habits are relatively more important. Across all genres, the quality of both the editorial content and the ad content is vital in driving engagement.

Audience Reasons For Watching TV Ads
	Watch Reason
Genre	Enjoying show and want to watch through ad break	Doesn’t seem worth changing channel	Find the advertising entertaining
Movies	29.8%	18.7%	7.2%
Sports	24.4	13.0	7.2
Drama	23.4	18.9	7.7
Entertainment/Reality	18.9	18.1	8.7
Kids	13.6	9.4	8.9
Source: Ovum/Avid, November 2013

Broadcasters, ad producers, and creative agencies will all play a symbiotic role in maintaining and growing audience engagement with TV ads. They must deliver high-quality inspirational content that delivers an appealing visual and audio experience, as well as great characters, a great narrative, and – importantly for ads – delivering comedy.

What audiences enjoyed about the last ad they thought was memorable. Responses in order of importance ranging from about 48% of the respondents almost linearly down to just under 10% of respondents considered most memorable:

• Ad was funny… about 48% of respondents
• Like story in ad
• Liked characters in ad
• Liked music in ad
• Amazing visuals
• Ad was informative
• Liked product
• Liked celebrity
• Thought ad was moving… about 9% of respondents

In order to understand the patterns of content discovery, experimentation, and fan engagement in the context of the growing use of social media, on-demand services, and the DVR, the data shows that across all respondents, TV-based promotion is still the best way to market TV shows. 39% of all respondents say that their most common way to discover new shows is from trailers, and 21% from channel surfing.

How Audiences Are Discovering New TV Shows (all age groups)
Discovery	Approximate % of Respondents
Trailers for new shows on TV	39%
Channel surfing	21
Friends recommendations	17
Reviews in magazines/newspapers	9
Recommendations on social networks	6
Recommendations from video sites	4
Billboards/Outdoor advertising	2
Source: Ovum/Avid, November 2013

It is a logical, but under-examined behavioral assumption, says the report, that if audiences become fans of a new show they discover online, they will then want to view future episodes as soon as they become available, leading to a rise in appointment-based viewing. The study finds that the percentage of respondents making sure they are in front of the TV increases for a show for which they have become a fan. It may seem counter-intuitive, but in the new TV market, driving users to DVR content is an important content marketing strategy to drive growth as well.

• Try to make sure I’m home               29.8%
• Record episodes ‘til I can watch   29.2%

The report concludes by noting that quality content reigns supreme among other conditions:

• High quality, inspiring content will drive audiences to view, engage, and purchase. It is also vital for advertisers to grasp the critical importance of delivering similarly high quality, inspiring advertising content. Of consumers, 66% will watch advertising, regardless of the technology they have to ad skip or alternative screens they have to look at, if both the editorial content and the advertising content is engaging and delivers a great audio visual experience
• It may seem a paradox, says the report, but giving audiences the opportunity to catch up on and discover new shows on-demand can drive appointment-based viewing. Multi-platform web video services, whether delivered via subscription VoD or catch-up models, create the opportunity for audiences to experiment with new shows at their own convenience
• How audiences are discovering content is also changing, with social media becoming an increasingly important discovery channel for new shows, particularly for youth audience segments
• More than one-third of consumers said they would pay for archive episodes of their favorite shows. However, their willingness to both view and pay is highly dependent not just on the personal preference and profile, but also on context
• Broadcast audiences continue to value major mass media events such as the Olympics or Soccer World Cup, but the way audiences are experiencing these events is ever more personal and socially connected. While watching the Olympics on TV, 63% of consumers with a PC, tablet, or smartphone were simultaneously looking at other scores or match information

It is becoming vital for live broadcasters to deliver content to the second screen that can exploit the additional engagement potential of these devices, though this creates additional production and publishing complexity. It is also important, concludes the report, that publishers can quickly respond to the unpredictable ways that socially connected audiences engage with live content.

For additional information and access to the PDF file, please visit here.