NewFronts: Is Online Video Ready for Its Closeup?on May 1, 2013 at 7:54 pm
The NewFronts, previews of professionally produced online content, are being hosted this week in New York by content producers, including some a number of broadcast networks, eager to sell time to major buyers of commercial time. This is where advertising time (i.e. commercials) are bought by advertisers. The NewFronts are intended to complement the UpFronts, the broadcast and cable networks’ annual showcase of programming before the nation’s major advertising.
The NewFronts are an indication that there is just too much to show during the short May UpFront week and that there is enough advertising money out there to warrant the expense of a separate event (about $4.1 billion by some accounts). If true, that’s good news for professional video producers who produce online content. The real question is not whether there is enough quality content, which there most definitely is, but whether people are really watching it.
The Interactive Advertising Bureau (IAB) estimates that 45 million people view professionally produced video on the Internet each month. The emphasis is on professionally produced – cat and baby videos aren’t included. That’s impressive until you consider that the figure represents only 19 percent of American adults, and that Nielsen estimates that more than 95 percent of the population watches television. By the way, the study revealed that about as many people dislike commercials online (about 65 percent) as they do on air (about 63 percent).
There is good news for online video. The video skews toward a young male audience 31 percent of men ages 18-34 watch in monthly (24 percent of men overall). Social media engagement is also much higher for those watching original video online. 41 percent of those watching original content online use it as the basis of social media exchanges, compared with the 35 percent who watch network television content online.
There is no question that originally produced online video is a rapidly maturing media format. It has moved from niche to mainstream media. It’s just not quite yet fully mature. Broadcasters also are not sure quite yet how to use it most effectively. Broadcast and online properties are not yet fully integrated by those media companies that offer both. The presence of separate events to sell online and broadcast advertising indicates that they are sold separately and that those sales efforts are not necessarily integrated. The area that shows the earliest promise is sports where there is plenty of material that can be shown on second and third screens to supplement what’s on the primary broadcast.
The takeaway from all of this is that professionally produced online video is a rapidly growing format and that there will be terrific opportunities out there. Sponsors are buying it. They’re just not buying as much of it as we would like, but that also should change soon. The pace of change will depend, in part, on how quickly content distributors figure out how to integrate their online and broadcast properties. By some estimates the ad market for online video will spike from its current $4 billion level to $8 billion in the next three years.