Scott Monty

Scott Monty

There were a number of stories in our June 27 newsletter that all revolved around video.

After several years of moving money out of TV ad budgets to experiment with new digital outlets and social media, several big advertisers are spending more on television – and the result, according to ad buyers and other executives familiar with the pace of this year’s upfronts, are a series of rate increases that TV has not won since the end of the last U.S. recession.

Still, TV advertising grew for 40 years, unchecked. In the last 20 years, the growth has slowed significantly and has been around a 40% market share. Digital and mobile have a 33% share of advertising.

But when you consider time spent, this is where things get interesting. Digital accounted for 47% of time spent with media in 2015, up from 32% in 2011, while TV has fallen from 41% amount of time spent in 2011 to 35% in 2015.

A look into the future

If you look more closely at this decline in time spent with TV, it's not evenly distributed across age groups. The 65+ age group has seen a 14% increase in TV time from 2010 to 2015, and 50-64 years old saw a 1% increase. However: every other age group has seen a decline in TV viewing. From a 14% decrease in 35-49 year olds to a whopping 41% decrease in 18-24 year olds.

Those figures tell the story of a very different future of television from the way we've come to know it.

So, where's the future of video? Well, the live stream industry is preparing for its own advertising heyday, as they create Live Fronts for advertisers to invest in live video. If it's quality content, people will still stop and watch live video. It's a matter of making it known and making an appointment with your audience — and then delivering on your promise.

Stream away

And more people are turning to online services like Netflix for their entertainment. Amazon video was responsible for just under two percent of downstream traffic on the Internet in 2015. This year, it more than doubled that, with 4.25% of downstream traffic. Suddenly, Amazon streaming video is in the #3 position, after Netflix, which has 35.15% and YouTube, with 17.53%. With more original programming in the works and its massive customer database, you can expect Amazon to be growing this segment — and doing so aggressively.

But YouTube Red, the company's paid subscription model - isn't standing by idly either. It's joining Netflix, Amazon and Hulu by stepping up to spend money to buy content from big media companies. In this case, YouTube Red has acquired Step Up, a drama based on the street dance movie that launched Channing Tatum's career. (Oh, where would 21 Jump Street be without him?)

Overall, the US digital video advertising market is expected to continue grow at a double-digit pace through at least 2020, according to eMarketer. 72% of marketers planned to invest those digital video ad dollars with YouTube in the next 12 months, while 46% of marketers plan to use Facebook. Other platforms including Hulu, ABC and Yahoo garnered less representation.

There continues to be a push from Facebook into live video. I host a Sunday evening show on Facebook Live every week myself. But now Facebook is paying celebrities and influencers to use the Live platform to create more video, thus trying to dominate the other companies out there. They have the scale to do it and they have the tools to continue to evolve the platform — such as creating Live video for more than one party and creating "waiting rooms" that allow enough people to gather before a program starts in earnest.

In reality, what's happening is that we're witnessing a rebirth of television, simply on new platforms. In its earliest days, television was only broadcast live. You had to watch a show when it was on. Over time, we've grown accustomed to recording our favorite shows — first on VCRs and more recently on DVRs. So live is a novelty. 

What's old is new again.

Only now, we have hopes for better ads. Or at least the ability to provide a live comment back to our hosts about them.


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