Commentary

Looking Back Through The Numbers

As the year comes to a close, I thought I would have my last article include a variety of statistics and facts regarding online video.  While I have been slightly disappointed in the adaption of video from a business standpoint, there is no denying the fact that users are gravitating towards the format. 

I am sure there are numerous other statistics out there that I missed or simply did not have room to mention.  I hope anyone with some good thoughts will post on the Video Insider blog.

September set a record, with more than 9 billion videos watched for the month, according to comScore.  Of those 9 billion, YouTube accounted for nearly 28%.  That translates to nearly 70 million people watching more than 2.5 billion videos a month. While this is not an article all about predictions, one prediction I will make is that YouTube's percentage will fall closer to 15% by the time 2008 draws to a close.

There was a good article in the Financial Times a few weeks back in which Tracey Scheppach, a senior vice president at Starcom, estimated that the four major networks will drive $120 million in revenue this year from free streaming content.  That is approximately 15% of the total eMarketer forecast of $775 million.  While the broadcasters certainly have a long way to go before TV viewership revenue losses are recovered, the fact users are making ABC, NBC, CBS and Fox one of their stops for video is a very good thing.  And for comparison purposes, YouTube reported revenue of just over $11 million in 2006 (anyone have a 2007 number they can share?). 

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The Pew Institute put out a report highlighting that even with all the buzz and hoopla regarding user-generated content, including videos, 62% of viewers say their favorite videos are the ones that are professional produced  -- with another 11% saying they enjoy both.  The Web will only continue to become more mainstream with preferences, so expect those numbers to increase.

With all of this video content being viewed by millions of consumers, publishers want to monetize it and advertisers want to get in front of this growing audience.  There is a recent blog entry on WebVideoReport.com that outlines the rate card pricing for a wide scope of video content publishers.  As you might expect, professionally generated content is more expensive than user-generated content.  For instance, WSJ.com lists its video ad unit for a $90 CPM, while MySpace lists at a $25 CPM. 

The question for advertisers becomes, with CPMs in this range, is video advertising worth it?  According to research from the Online Publishers Association, it is.  In the group's yearly survey, it reports that 31% of consumers who viewed a video ad checked out the advertiser's Web site, 16% talked about the advertised product to family and friends, and 15% were motivated to check out the product at the store.

In closing, I would like to wish you all a very happy holiday season. I look forward to continuing to explore online video with you in 2008.

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