The average amount of time day people will spend consuming online video each day will increase by 23.3% in 2015 and by a further 19.8% in 2016, predicts Online Video Forecasts report, compiled by ZenithOptimedia and Newcast, ZenithOptimedia (ZO) Group’s global branded content network. In the report, the figures for video consumption and number of viewers refer to the 40 key markets covered in this report; the figures for online video adspend are global.
ZO expects mobile to become the main platform for viewing online video next year. Three years ago (in 2012), mobile devices accounted for 22.9% of time spend watching online video worldwide and, by 2014, this proportion rose to 40.1%. ZO expects it to reach 52.7% in 2016 and 58.1% in 2017.
According to ZO’s predictions, the number of people regularly watching traditional, linear TV will peak this year, and will start to decline for the first time in 2016. ZO forecasts the number of regular linear TV viewers will rise 3.1% in 2015 and will shrink by 1.9% in 2016 and 0.9% in 2017.
The number of regular linear TV viewers has been in decline in France and Russia since 2013, in the UK and the US since 2014, and is expected to start to decline in China this year. The decline of linear TV viewing is in direct correlation with the increasing quantity and quality of content available online, both from short-form platforms like YouTube and long-form platforms like Netflix. ZenithOptimedia forecasts that the number of regular online video viewers will increase by 5.8% in 2015, 5.1% in 2016 and 5.3% in 2017. The number of regular online video viewers is increasing at double-digit rates in 12 of the markets included in this report, including in major markets like China (27.2%), France (50.0%), Germany (27.5%) and the US (12.3%).
Online video’s share of global digital adspend is rising rapidly: it was 8.8% in 2012 and 10.2% in 2014; by 2017, ZO expects it to rise to 12.8%, an eighth of all internet adspend. Online video is the fastest-growing category of internet advertising and is forecasted it to grow by 28.9% to $16.1BN worldwide in 2015, followed by 22.5% growth in 2016 and 19.7% growth in 2017, when it will total $23.7BN.
The US online video market is by far the largest: $8.5BN in 2015, 52.9% of the global total, although we expect its share to drop to just below half of the global total – 49.9% – in 2017. The US also tops – jointly, with Italy – the list of markets with the highest proportion of total internet spend going to online video (16.5% each in 2015), followed by Taiwan (15.8%) and Latvia (13.0%).
Mark Waugh, Global Managing Director Newcast:
Consumers all around the world are rapidly embracing online video, because it offers them a near limitless array of engrossing content. Some of the keenest users are the young, affluent viewers who are hardest to reach on television. Brands are finding online video a particularly effective way to reach these valuable audiences, not just with advertising, but also with branded content; content that can inform or entertain consumers in a deeper and richer way than is possible with short, interruptive ads.
ZO’s Online Video Forecasts surveys online video expenditure and consumption in 40 countries around the world. It offers demographic data for the markets included and tracks the development of online video from 2012 to 2014, with forecasts to 2017. For most of the 40 markets covered we provide figures for advertising expenditure on online video v. total digital and traditional TV, as well as consumption data (number of users/average time spent consuming online video, including on mobile). Accompanying commentaries for all markets explain who the main players in online video are, give a quick overview of the demographic split of each market, and explore such issues as the effectiveness of different formats of advertising used in online video and to what extent it is beginning to complement or supplant traditional linear TV as an ad medium. We also take a look at what type of content is being viewed, and how it is being viewed.
This growth in video consumption is being driven by the rapid rise of smartphone and tablet penetration across the globe, together with the resulting changes in consumer behaviour. Video consumption on mobile devices (such as smartphones and tablets) is forecast to grow by 43.9% in 2015 and 34.8% in 2016. Meanwhile, video consumption on non-mobile devices will continue to grow, though at more moderate rates, increasing by 9.5% in 2015 and 6.5% in 2016.