EMarketer Digital Video Trends Q2 2016-Monetization Audience Platforms and Content

DIGITAL VIDEO
TRENDS Q2
2016
Monetization, Audience,
Platforms and Content
JUNE 2016
Paul Verna
Contributor: Amy Rotondo
Read this on
eMarketer for iPad
DIGITAL VIDEO TRENDS Q2 2016: MONETIZATION, AUDIENCE, PLATFORMS

AND CONTENT
This is the latest installment in an ongoing series of quarterly video ecosystem overviews focusing on monetization,
audience, platforms and content. Our goal is to provide a summary of key developments each quarter on a
need-to-know basis.
As US digital video ad spending continues to

grow, increasing ad dollars will come from linear
TV budgets. These are typically allocated toward
premium, long-form original digital content and are
transacted programmatically.
US TV* vs. Digital Video** Ad Spending, 2016-2020

billions
On the subscription side of monetization, Hulu will

launch a live TV streaming service to compete with
so-called skinny bundles aimed at cord-cutters and
cord-nevers.
US time spent watching TV continues to fall as more
people gravitate toward digital platforms. This is a
slow, secular shift rather than a massive and sudden
disruption. TV still commands more time, attention and
ad dollars than digital viewing.
Viewers demand a viewing experience that travels
seamlessly from any screen. Among video platforms,
established leaders like YouTube have a solid place in
the market, but Facebook and other social venues are
a growing presence, as are live streaming services.
As device and content platforms continue to expand,
marketers should consider the full range of possibilities
when planning ad campaigns.
Digital videos breadth and diversity have created
an environment where almost any brand can be a
programmer. Major players like Netflix, YouTube,
Amazon and Hulu are increasing their investments in
original content, as are media brands that are primarily
known as print publishers.
WHATS IN THIS REPORT? This report covers key events

in the digital video industry based on data, trends and
business activity in Q2 2016. It provides a snapshot of the
current state of the industry, focusing on the most timely
and relevant developments.
2016
TV*
$13.39
$11.72
$9.84
2017
$77.17
$75.29
$73.81
$72.01
$70.60
2018
$15.15
2019
$16.69
2020
Digital video**
Note: *includes broadcast TV (network, syndication & spot) & cable TV;
**includes advertising that appears on desktop and laptop computers as
well as mobile phones, tablets and other internet-connected devices;
includes advertising that appears before, during or after digital video
content in a video player
Source: eMarketer, March 2016
211540
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KEY STAT: TV advertising remains the largest single

category of US ad spending, but its growth has stalled.
By comparison, digital video advertising is expected to
grow at annual double-digit rates and gradually narrow the
gap with TV.
CONTENTS
2 Digital Video Trends Q2 2016: Monetization, Audience,
3 Monetization
7 Audience
9 Platforms
14 Content
16 Related eMarketer Reports
16 Related Links
16 Editorial and Production Contributors
DIGITAL VIDEO TRENDS Q2 2016: MONETIZATION, AUDIENCE, PLATFORMS AND CONTENT
2016 EMARKETER INC. ALL RIGHTS RESERVED 2
MONETIZATION
Ways in Which US TV/Video Professionals* Plan to

Generate Revenue from Video Services, Q1 2016
% of respondents
Highlights of Q2 2016:
Ads
US digital video ad spending will continue to grow at a

pace that exceeds TV advertising growth through 2020.
Broadcast and cable TV budgets are a major source of
digital video ad spending, according to recent research.
More and more digital video spending is allocated
toward original content and transacted programmatically.
Hulu announced a live TV subscription service that will
launch in 2017, and YouTube is rumored to be planning
something similar.
What to look for in Q3 2016:
Q2 trends will continue, including more spending on

original video, more programmatic video advertising
and possibly new live TV skinny bundles available from
over-the-top (OTT) subscription services.
73%
Subscriptions
59%
Pay-per-view
37%
Electronic sales
34%
Note: *who have launched or intend to launch direct-to-consumer video

services
Source: NewBay Media, "The State of Direct to Consumer Internet Video
Services: How Media Companies and Enterprises Are Building Out Their
Own OTT Video Ventures" sponsored by Akamai, April 26, 2016
210644
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Research firm Advertiser Perceptions found that 38%

of US marketers it surveyed in December 2015 planned
to draw funds from their broadcast budgets to support
digital video ad spending. This was followed closely by
print (36%) and cable (29%).
Sources from Which US Marketers Plan to Shift Their
Budget to Support Digital Video Ad Spending,
Dec 2015
% of respondents
Broadcast
38%
Print
ADVERTISING
Cable
eMarketer expects US digital video ad spending will see

double-digit growth annually through 2020. By contrast,
TV ad spending will grow much more modestly, at rates
ranging from 2.0% to 2.5%. Still, TV will remain dominant,
with total ad spending reaching $77.17 billion in 2020,
more than quadruple the $16.69 billion for digital video.
Search
2014
2015
2016
2017
2018
2019
2020
$68.54 $68.88 $70.60 $72.01 $73.81 $75.29 $77.17
% change
3.3%
0.5%
Digital video**
$5.24
$7.66
$9.84 $11.72 $13.39 $15.15 $16.69
% change
2.5%
2.0%
40.8%
46.0%
28.5%
19.2%
2.5%
14.2%
2.0%
13.1%
2.5%
10.2%
Note: *includes broadcast TV (network, syndication & spot) & cable TV;
**includes advertising that appears on desktop and laptop computers as
well as mobile phones, tablets and other internet-connected devices;
includes advertising that appears before, during or after digital video
content in a video player
Source: eMarketer, March 2016
205441
29%
Display
US TV* vs. Digital Video** Ad Spending, 2014-2020

billions and % change
TV*
36%
17%
11%
Interactive TV 9%
Social
9%
Source: Advertiser Perceptions, "Video Advertising Report: Wave 4, Winter

2016," April 13, 2016
208914
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The same study found 72% of marketers planned to

invest those digital video ad dollars with YouTube in
the next 12 months. Comparatively, 46% of marketers
intended to use Facebook, while other platforms including
Hulu, ABC and Yahoo garnered less representation. This
shows that even though Facebook and others are strong
contenders in the video space, YouTube remains the
go-to platform for roughly three-quarters of brands that do
digital video advertising.
www.eMarketer.com
A NewBay Media study sponsored by Akamai showed

that 73% of US TV and video professionals polled planned
to monetize their content with ads in Q1 2016, while 59%
planned to use subscriptions. Those two methods beat
out pay-per-view (37%) and electronic sales (34%).
Leading Brands that US Marketers Intend to Use for

Digital Video Advertising, Dec 2015
% of respondents
Google/YouTube
72%
Facebook
46%
Hulu
38%
ABC
32%
Yahoo
29%
ESPN
25%
Twitter
25%
NBC
A&E
An April 2016 study from ad tech firm Videology showed

that viewability continued to be a top campaign objective
for US advertisers in Q1 2016. Viewable rate was a goal
for 52% of campaigns served by Videology, compared
with 48% for viewthrough rate and 38% for clickthrough
rate. Actions and conversions did not register as major
objectives. The data is a reminder that a video ad only
works when its seen, and that video advertising remains
fundamentally a branding pursuit.
Campaign Objectives of US Digital Video Ads, Q1 2016
% of total campaigns served by Videology
24%
21%
Viewable rate
52%
48%
CNN
19%
Viewthrough rate (VTR)
iAd
19%
Clickthrough rate (CTR)
Note: in the next 12 months

Source: Advertiser Perceptions, "Video Advertising Report: Wave 4, Winter
2016," April 13, 2016
208917
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A March 2016 survey of US agency and marketing

professionals conducted by Advertiser Perceptions
for the Interactive Advertising Bureau (IAB) showed
the following:
47% of respondents bought digital video inventory

through programmatic advertising companies, and
41% of digital video ad dollars were transacted
programmatically (33% were transacted
programmatically in 2015).
35% of US ad budgets were spent on cross-platform
TV/video buys in 2016, compared with 29% in 2014 and
32% in 2015.
4%
1%
38%
Cost per action (CPA)
Conversion rate
Note: represents activity on Videology's platform, broader industry metrics

may vary
Source: Videology, "US Video Market At-A-Glance Q1 2016," April 28, 2016
209355
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A Q1 2016 study by ad platform Extreme Reach found the

average viewability rate for digital video ads worldwide
was 47%. This was based on activity on its own platform,
which is predominantly US-based. Predictably, viewability
was significantly higher for premium ads placed directly
(62%) than for ads placed through networks and
exchanges (42%). There was very little variability by
ad length.
Viewability Rate for Digital Video Ads Worldwide*, by
Ad Length and Purchase Method, Q1 2016
among impressions served by Extreme Reach
Purchase method
47% of respondents planned to shift budget from

broadcast TV advertising to fund digital video ad
spending. Other channels from which professionals
planned to shift budget included cable TV advertising
(41%), nonvideo digital ads (30%) and mobile video
(28%). Also, 41% said digital video funds would come
from overall expansion of budgets.
Publisher direct**
62%
Ad networks/exchanges***
42%
The average share of original digital video content

spending committed during the NewFronts (an annual
marketing conference where digital media companies
present their offerings to ad buyers) increased to 38%
in 2016, up from 32% in 2014 and 34% in 2015.
211086
Ad length
0:15
49%
0:30
47%
Total
47%
Note: represents activity on the Extreme Reach platform, broader industry

metrics may vary; *primarily US; **premium media vendors such as CBS,
ESPN, The Huffington Post, Hulu, YouTube, etc.; ***media aggregators such
as BrightRoll, Q1Media, The Trade Desk, Tremor Video, YuMe, etc.
Source: Extreme Reach, "Digital Video Benchmarks," May 24, 2016
www.eMarketer.com
Although the average viewability rate did not change

significantly in Q1 2016 from the full year before, there
was a marked improvement in the rate for publisher-direct
ads. In Q1 2016, these ads had an average viewability rate
of 62%, compared with 55% in 2015.
Viewability Rate for Digital Video Ads Worldwide*, by

Ad Length and Purchase Method, 2015
among impressions served by Extreme Reach
Purchase method
Publisher direct**
55%
Ad networks/exchanges***
43%
Ad length
0:15
45%
0:30
47%
Total
46%
Note: represents activity on the Extreme Reach platform, broader industry

metrics may vary; *primarily US; **premium media vendors such as CBS,
ESPN, The Huffington Post, Hulu, YouTube, etc.; ***media aggregators such
as BrightRoll, Q1Media, The Trade Desk, Tremor Video, YuMe, etc.
Source: Extreme Reach, "Digital Video Benchmarks," May 24, 2016
211087
An April 2016 survey of US internet users from research

firm Zogby Analytics found respondents were willing to
pay an average of $7.83 per month for digital video content
services, and similar amounts for sports sites/apps and
music streaming services. Those price thresholds were
below current rates for established services such as
Netflix, Amazon and Hulu, which are roughly $10 per
month, and significantly below skinny bundle offerings,
which are meant to substitute for pay TV subscriptions.
The Zogby data is a sign that video streaming services,
especially emerging ones, have a big challenge ahead of
them when it comes to attracting paying customers.
www.eMarketer.com
Although the Extreme Reach data shows a distinct

increase in viewability, the digital video ad industry still
has plenty of room for improvement when it comes to
making sure its core product is seen by end-users.
Monthly Amount that US Internet Users Would Expect

to Pay for Select Digital Services, April 2016
Digital video content services*
Sports sites/apps**
$7.75
Music streaming services***
SUBSCRIPTIONS
The second quarter brought a major announcement on
the video subscription front, with confirmation from Hulu
of a long-rumored plan to launch an OTT live TV service.
The company did not release details of pricing or content
availability on the service, which is expected to launch
in 2017.
For its part, YouTube did not confirm widespread
speculation that it, too, would launch a live TV service.
With one or both of these companies joining the fray, the
subscription video space will get increasingly competitive
for Netflix, Amazon and existing skinny bundles from Dish
Network, Comcast, CBS, Sony, Verizon, AOL, Cablevision
and Time Warner.
$7.83
$7.68
Note: n=1,004; if all providers in each category started charging

subscription fees; *e.g., Facebook, Hulu and YouTube; **e.g., Bleacher
Report, CBS Sports, ESPN, Fox Sports, MLB.com and SB Nation; ***e.g.,
Pandora, Soundcloud, Spotify and Tidal
Source: Zogby Analytics and Digital Advertising Alliance, "Public Opinion
Survey on Value of the Ad-Supported Internet," May 11, 2016
210475
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Among the various services available, OTT video led

the field among US paid subscribers polled by payment
service provider Vindicia in January 2016. Nearly
three-quarters of respondents used services such as
Amazon Prime Video, HBO Now, Hulu Plus and Netflix.
Shopping services were second, cited by 62%, followed
by music services (37%). The high incidence of video
subscriptions is a mixed blessing for video-on-demand
(VOD) providers. On one hand, it indicates a healthy
demand for their services. On the other hand, it may
point to near saturation and a likely increase in customer
churn. Again, this is a cue that these service providers will
need to redouble their efforts to differentiate themselves,
mostly through the quality of their original content or by
pursuing niches, such as arthouse films.
Types of Paid Subscription Services to Which US Paid

Service Subscribers Currently Subscribe, Jan 2016
% of respondents
US Internet Users Who Subscribe to Pay TV or

Over-the-Top (OTT) Video Services, by Type, Dec 2015
% of respondents
Over-the-top (OTT)/video-on-demand (VOD) (Amazon Prime Video,

HBO Now, Hulu Plus, Netflix)
74%
Pay TV
77%
Cable (e.g., Time Warner, AT&T U-Verse, Verizon FiOS)
51%
Satellite (e.g., DirecTV, Dish Network)
29%
Shopping (Amazon Now/Prime, Google Express)
Streaming/online (e.g., Hulu, Netflix, Amazon Prime Video)
38%
Premium cable (e.g., HBO, Showtime, ESPN RedZone)
21%
62%
Audio services (Apple Music, Pandora, Spotify)
37%
Other
Print media (Amazon Prime/Kindle Unlimited)

28%
None of these
Any of these
3%
91%
9%
Note: n=2,047 ages 18+

Source: TVfreedom, "A Survey about Pay TV and Local Broadcast Television"
conducted by The Harris Poll, Feb 10, 2016
Professional services (Dropbox, Office 365)

23%
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Lifestyle (Birchbox, Fabletics, Dollar Shave Club)

17%
Financial services (credit scores, The Motley Fool)
15%
Health & wellness (ClassPass, Blue Apron)
12%
Learning services (Craftsy, Rosetta Stone)
9%
Dating services (Match.com, eHarmony, JDate)
2%
Other
2%
Note: ages 18+ who subscribe to at least 1 paid subscription service
Source: Vindicia, "Consumer Demand for Value-Added Subscription
Services" conducted by Widmeyer Communications, March 8, 2016
206431
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A December 2015 survey of US internet users from US

broadcasters coalition TVfreedom found that 77% of
respondents subscribed to conventional pay TV services.
By comparison, 38% subscribed to digital streaming
services and 21% subscribed to premium cable offerings
such as HBO and Showtime. The study highlights the
need for TV networks and content owners to reach
consumers through all available channels, including
traditional pay TV and digital subscription services. In
an increasingly fragmented market, programmers cant
afford to bypass any of the major distribution avenues.
AUDIENCE
US time spent watching TV is trending downward, at

the expense of digital video, but TV still commands by
far the most viewing time.
Among US millennials, time spent streaming will far
surpass time spent viewing traditional TV in 2016a
big change from 2012, when TV accounted for 75% of
viewing time by that demographic.
Share of Average Time Spent per Day with Video by

US Adults, TV* vs. Digital**, 2016
% of total
Digital video**
21.6%
The numbers of broadcast-only and broadband-only

US households are rising, while pay TV households
are declining.
TV*
78.4%
TV will capture 78.4% of average time spent per day with

video by US adults in 2016, compared with 21.6% for
digital video, according to eMarketer. Again, this speaks
to TVs dominance and the encroachment of digital. All
signs point to this gap continuing to narrow over time.
Audiences will continue to migrate from traditional TV

to digital video, drawn by smartphones, connected TVs
and other devices. With mobile viewing approaching
saturation, the focus will shift to the living room.
Confirming research findings and anecdotal evidence,

time spent watching TV in the US is trending downward,
according to eMarketers April 2016 update. Average daily
time for adults will decrease to 4 hours, 11 minutes in
2018, down from 4 hours, 19 minutes in 2016. The change
is slight, and 4 hours is still a massive amount of time
considering the proliferation of alternatives, but the signs
are clear that consumers are slowly gravitating away from
the tube to other screens and activities.
Average Time Spent per Day with TV* Among US Adult
TV Viewers, by Age, 2012-2018
hrs:mins
2012
2013
2014
2015
2016
2017
2018
18-24
3:06
2:56
2:42
2:29
2:22
2:15
2:10
25-34
3:40
3:32
3:19
3:07
3:00
2:54
2:49
35-44
4:24
4:18
4:07
3:56
3:49
3:43
3:39
45-54
4:51
4:45
4:36
4:24
4:20
4:14
4:10
55-64
5:36
5:31
5:30
5:19
5:15
5:11
5:06
65+
6:16
6:17
6:15
6:07
6:03
5:59
5:53
Total
4:44
4:39
4:32
4:23
4:19
4:15
4:11
Note: ages 18+; time spent with each medium includes all time spent with
that medium, regardless of multitasking; for example, 1 hour of
multitasking with digital video while watching TV is counted as 1 hour for
digital video and 1 hour for TV; *excludes digital; **includes time spent
watching digital video via game console, connected TV or OTT device
Source: eMarketer, April 2016
208081
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MILLENNIALS DRIVING CHANGE

The assumption that teens and millennials are driving
the shift toward digital is borne out in data from various
providers. A November 2015 survey from AOL found
that pay TV still predominates among teen US internet
users, with 81% of respondents using this option to view
video. However, this group also showed a high incidence
of viewing TV shows and movies on connected TV and
other digital devices. And confirming other findings to
this effect, AOL showed a relatively low percentage of
teen users buying or permanently downloading shows
or moviesan indication that the streaming model that
Netflix helped pioneer has eclipsed the download model
started by Apples iTunes store.
Note: time spent with each medium includes all time spent with that
medium, regardless of multitasking; for example, 1 hour of multitasking on
desktop/laptop while watching TV is counted as 1 hour for TV and 1 hour
for desktop/laptop; *excludes digital
Source: eMarketer, April 2016
207925
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Video-Related Activities of US Teen Internet Users,

Nov 2015
% of respondents
Watch shows or movies using a satellite or cable TV subscription
81%
Watch shows using a connected TV device (e.g., Apple TV, Roku,
Xbox, etc.)
46%
Rent/stream shows or movies using any device
45%
Watch movies using a connected TV device
41%
Weekly Time Spent Viewing Traditional TV Among US

Millennials, Q1 2012-Q4 2015
hrs:mins
Buy or permanently download shows or movies

24%
Note: n=513 ages 12-17; a few hours per week or more
Source: AOL, "Mega Audience II: Teens," May 16, 2016
210734
www.eMarketer.com
A May 2016 Horowitz Research tracking study of US

millennial TV viewers (ages 18 to 34) noted a sharp
shift toward streaming video and away from traditional
viewing. The study, which measured weekly time spent in
2012 and 2016, found that 54% of video time was spent
streaming in 2016, up from 15% in 2012. The trend for
traditional TV was in the opposite direction, with 39% of
time spent in 2016, down from 75% four years earlier.
DVD usage declined slightly, also reflecting the rise of
streaming and other digital options.
54%
75%
21:59
Q4 2012
23:14
Q1 2013
23:24
Q2 2013
21:32
Q3 2013
21:45
Q4 2013
22:27
Q1 2014
21:49
Q2 2014
19:01
Q3 2014
17:34
Q4 2014
18:33
Q1 2015
18:04
Q2 2015
16:26
Q3 2015
15:30
Q4 2015
16:47
Q4 2014
2016
Streaming
www.eMarketer.com
US Households with Select Pay TV Services,

Q4 2014 & Q4 2015
millions
39%
DVD
Note: ages 18-34; self-reported; *includes DVR, live and video-on-demand

Source: Horowitz Research, "State of Cable & Digital Media 2016" as cited
in press release, May 4, 2016
210120
22:32
Q3 2012
The Nielsen study also showed declines in the number

of US households that subscribed to cable and satellite
pay TV services in Q4 2015 compared with a year earlier.
During the period, broadcast-only and broadband-only
households increased slightly. None of the changes is
massive, but together they point to a gradual attrition in the
pay TV universe at the expense of digital-only alternatives.
15%
Traditional*
24:44
Q2 2012
211560
7%
2012
Q1 2012
Note: ages 18-24; includes live viewing and any playback within the
measurement period
Source: Nielsen, "The Total Audience Report: Q4 2015" as cited by
MarketingCharts, April 12, 2016
Share of Weekly Time Spent Viewing TV/Video

Content Among US Millennial TV Viewers, by Type,
2012 & 2016
% of total
10%
Nielsens Total Audience Report: Q4 2015 found that

weekly time spent watching TV among US millennials
ages 18 to 24 declined to 16 hours, 47 minutes in Q4
2015, down from 25 hours, 34 minutes in Q4 2011.
The annual cycle includes bumps in viewership in Q4,
which sometimes extend into Q1 of the next year, but
the overall trend has been a significant reduction in the
amount of time millennials spend watching TV.
www.eMarketer.com
Cable plus
Q4 2015
100.9
99.4
Wired cable (no telco)
53.4
52.0
Satellite
34.6
34.5
Broadcast only
12.3
13.1
Telco
13.4
13.4
3.1
3.9
Broadband only
Note: based on weighted counts for the 15th of each month within the
quarter
Source: Nielsen, "The Total Audience Report: Q4 2015," March 24, 2016
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PLATFORMS
Devices Used to View Original Digital Video*

According to US Digital Video Viewers, March 2016
% of respondents
Desktop/laptop
Every device is fair game. Viewers have come to

expect a seamless experience across all screens
smartphones, tablets, desktops, laptops, consoles,
smart TVs, set-top boxes and traditional TVs. Any
programming strategy or ad campaign that underserves
one of these screens will underperform.
The same is true of content platforms. YouTube is still
a dominant force, but social and messaging platforms
such as Facebook, Twitter and Snapchat are also a
priority for marketers and programmers.
Live streaming apps such as Facebook Live and
Periscope continue to gain users and attention from
programmers and marketers.
The agreement between the National Football League

(NFL) and Twitter to carry Thursday Night Football
broadcasts on Twitters Periscope live streaming
platform will open the door to similar agreements and
push live video further into the mainstream.
68%
Smartphone/iPod Touch
60%
Internet-connected TV
56%
Tablet/ereader
43%
Note: n=407; ages 18+; among those who watch original digital video at
least monthly; *professionally produced video for ad-supported online
distribution and viewing only (not TV); excludes original digital video that is
not ad-supported (e.g., Netflix original series)
Source: Interactive Advertising Bureau (IAB), "2016 Original Digital Video
Study" conducted in partnership with GfK, May 11, 2016
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As other data on TV and video usage has shown, a

demographically segmented data point from Nielsens Q4
2015 report showed that younger users were most likely
to use connected TV devices alone or use connected
devices in conjunction with traditional TV. Among older
cohorts, the tendency was clearly toward traditional TV.
Primary Device Used by US TV Viewers to View TV,
by Age, Nov 2015
% of respondents in each group
2-11
59%
12%
29%
57%
14%
29%
56%
14%
29%
12-17
18-34
35-49
DEVICE PLATFORMS
A March 2016 study by the IAB and research company
GfK looked at the various screens US digital video
viewers used to watch original content. The study was
limited to ad-supported professional video, which means
ad-free platforms such as Netflix were excluded. That
may explain why desktop and laptop computers were the
leading devices (68%), followed by smartphones (60%),
connected TVs (56%) and tablets (43%). The ranking
would probably be different if the study had focused on
premium, long-form programming, but the message is
clear. More than ever, consumers reach for the most
convenient, most immediately available screen to watch
visual programming.
72% 5%
22%
50-64
84% 2%
14%
65+
89% 1%
Traditional TV only
Connected TV devices only
10%
Both traditional TV and

connected devices
Note: on an average TV viewing day; numbers may not add up to 100% due
to rounding
Source: Nielsen, "The Total Audience Report: Q4 2015," March 24, 2016
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AOLs teen-focused study found high rates of TV show

and movie viewing on multiple devices. TV still ruled for
both types of content, but teens also used computers,
tablets and smartphones in significant numbers.
Devices/Locations Where US Teen Internet Users

Watch TV Shows vs. Movies, Nov 2015
% of respondents
TV shows
Movies
TV
89%
74%
Desktop/laptop
51%
41%
Tablet
42%
37%
Smartphone
41%
33%
24%
Theater
www.eMarketer.com
Another study that pointed toward the democratization of

screens came from ad tech firm FreeWheel, which found
an increasingly even mix of device platforms in its March
2016 study of ad view share on US long-form authenticated
platformsi.e., digital streaming services in which users
need to enter credentials from their pay TV subscription
to access content. In 2015, desktops/laptops led with a
37% share, compared with 31% for OTT devices, 17%
for smartphones and 15% for tablets. In 2014, the mix
was skewed toward computers and, to a lesser extent,
OTT devices.
US Long-Form Authenticated* Ad View Share,
by Device, Q4 2014 & Q4 2015
% of total ads served by FreeWheel
Smartphone
7%
Tablet
7%
OTT device
27%
Desktop/
laptop
59%
Desktop/
laptop
37%
Smartphone
17%
2015
Note: represents activity on FreeWheel's platform, broader industry

metrics may vary; *viewing that occurs after MVPD subscription
credentials have been entered to access content that aired on broadcast,
cable or satellite TV
Source: FreeWheel, "Q4 2015 Video Monetization Report," March 9, 2016
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43%
34%
Visit the brand's website
41%
Click on the ad
36%
30%
Speak to friends and family about the brand
33%
29%
Visit the brand's social media page
23%
23%
Share or "like" the ad
21%
18%
Tablet
Smartphone
Note: ages 18-54; top-2 box choices

Source: Interactive Advertising Bureau (IAB), "Multiscreen Video Best
Practices: Understanding the Next Wave of Video Ad Receptivity" in
partnership with Tremor Video and Millward Brown Digital, April 11, 2016
208669
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CONTENT PLATFORMS
Tablet
15%
OTT device
31%
2014
Find out more about the brand online
32%
Note: n=513 ages 12-17; at least once per week

Source: AOL, "Mega Audience II: Teens," May 16, 2016
210729
Actions Taken After Viewing a Video Ad on

Smartphone vs. Tablet Among US Internet Users,
March 2016
% of respondents
www.eMarketer.com
A March 2016 poll of US internet users conducted by IAB,

ad tech provider Tremor Video and research firm Millward
Brown Digital found tablets surpassed smartphones
when it came to driving actions based on ads viewed.
Tablets performed best on responses including finding
more information about a brand online, clicking on ads
and liking or sharing ads. This is a reminder that screen
size matters when it comes to making an impression.
Among digital content platforms, US TV viewers

overwhelmingly used subscription-based streaming
services to watch TV shows and movies, according to a
March 2016 study from Hub Research. The respondents
who chose streaming services (68%) were nearly double
those who picked TV network sites or apps (37%). Other
choices included free, ad-supported aggregators such as
Sonys Crackle and Hulus free tier (30%) and sites/apps
from pay TV providers (20%), otherwise known as
multichannel video program distributors (MVPDs).
Reflecting data from other providers, Hub Research noted
low usage of individually downloaded shows or movies
(16%) and a 13% incidence of unofficial venues, which
others might less politely call pirate sites.
Digital Channels Used by US TV Viewers to Watch TV

Shows/Movies, March 2016
% of respondents
Online streaming subscription (e.g., Netflix, Amazon Prime, Hulu)
68%
TV network site or app
37%
Free aggregator (e.g., Crackle, free content from Hulu)
30%
MVPD site or app
20%
Online shows and movies bought/paid for individually
16%
"Unofficial" sites (e.g., Putlocker, uTorrent, Pirate Bay)
13%
Note: ages 16-74 who watch at least 5 hours of TV per week; in the past 6
months
Source: Hub Research, "What's TV Worth?" May 4, 2016
210134
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In the digital space, 79.8% of US internet users polled in

March 2016 by Cowen and Company had used YouTube
in the past 30 days. Facebook was second at 63.9%,
while other platforms such as Instagram and Twitter
followed. This snapshot from Cowen shows a market in
which longtime leader YouTube is still the king of the hill,
but with Facebook as a strong No. 2 and other emerging
video platforms in the mix as well.
Digital Video Platforms Used by US Internet Users,
March 2016
% of respondents
YouTube
79.8%
Facebook
63.9%
Instagram
25.2%
Twitter
20.1%
Snapchat
Vine
12.7%
Vimeo
10.7%
4.6%
0.8%
16.6%
Periscope
Meerkat
Other 8.9%
Note: ages 18+; in the past 30 days
Source: Cowen and Company, "US Digital Video Usage Across Social
Networks and YouTube," April 7, 2016
208545
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A May 2016 survey of US internet users by RBC Capital

Markets found that when it came to watching movies
and TV shows, Netflix and YouTube were tied for first
among respondents, with each capturing 50%. This was
surprising given the relative paucity of TV shows (not
to mention movies) on YouTube compared with Netflix.
But the data indicates YouTube is making strides toward
becoming a premium, long-form content source, and that
its massive scale is enough to rival Netflixwhich, for all
its momentum and its pioneering role in the streaming
space, remains a premium subscription play with a
US audience in the 45 million range (see data below),
compared with YouTubes domestic user base of over
176 million.
Video-on-Demand (VOD) Services Used by US Internet
Users to View Movies/TV Shows, May 2016
% of respondents
Netflix
50%
YouTube
50%
Amazon
27%
Hulu
24%
HBO Now
14%
Comcast
iTunes
13%
9%
8%
Google Play
Note: n=1,007; in the past 12 months

Source: RBC Capital Markets, "Netflix: Updating the Long Thesis," May 22,
2016
210869
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The RBC data also showed that Amazon and Hulu have
some catching up to do to reach Netflix, their biggest and
most direct competitor. Emerging services such as HBO
Now and Comcasts skinny bundle had enough share to
make the list, which those providers could rightfully point
to as indicators of early success.
Measurement firm Verto Analytics also found that YouTube
was the runaway leader in the streaming TV/video space,
with 228.2 million US unique users in March 2016.
The study measured all activity on platforms, including
traffic from users who visited the sites or apps without
necessarily being logged in. This explains why, for example,
Netflixs user number (95.0 million) was more than twice
its number of subscribers, since many people use the
service without being account holders. The surprising
findings were that Vimeo was the second-ranked service
on the list and that Watch ABC surpassed Hulu (and
presumably Amazon, which didnt make the top 5).
Top 5 Streaming TV/Video Services Among US Internet

Users, Ranked by Monthly Unique Users, March 2016
millions
Primary Source for Viewing TV/Video Content Among

US Millennial TV Viewers, Jan 2016
% of respondents
1. YouTube
Netflix
228.2
2. Vimeo
Live on TV
119.8
3. Netflix
13%
YouTube
4. Watch ABC
8%
4%
5. Hulu 27.6
Note: ages 18+; includes traffic from users who visit the platforms via web
or app regardless of whether or not they are logged in
Source: Verto Analytics, "Verto Index: Streaming Video," April 21, 2016
209283
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Cowen and Company data segmented by age showed

YouTube did best among older users, followed by
Facebook. In every case there was substantially higher
usage among millennials than seniors, but the disparities
were less with YouTube and Facebook than with more
youth-driven services such as Instagram, Snapchat
and Twitter.
Digital Video Platforms Used by US Digital Video
Viewers, by Age, March 2016
YouTube
Facebook
Instagram
Snapchat
Twitter
18-24
95%
78%
57%
53%
40%
25-34
93%
74%
40%
26%
26%
35-44
86%
68%
28%
15%
24%
45-54
79%
65%
17%
7%
17%
55+
61%
48%
5%
2%
6%
Total
80%
64%
25%
17%
20%
208546
29%
DVR/VOD
95.0
33.4
36%
www.eMarketer.com
A Horowitz Research data point showed that Netflix was

picked by 36% of US millennials polled as the primary
source for watching TV/video content in January 2016, a
percentage higher than live TV (29%).
Hulu
Amazon Prime
4%
2%
MVPD or network site/app
Other 4%
Note: ages 18-34
Source: Horowitz Research, "State of Cable & Digital Media 2016" as cited
in press release, May 4, 2016
210121
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Similarly, media company Defy Media found YouTube and

Netflix topped pay TV as platforms on which US teen and
young adult internet users watched video in fall 2015.
YouTube was nearly saturated, at 85% of respondents,
followed by Netflix at 66%. By comparison, 62% picked
pay TV. Other top video venues included Facebook (53%)
and Instagram (37%). The predominance of digital venues
indicates that, at least for younger viewers, watching TV
often means going to a social media or OTT service more
than to a traditional provider.
Platforms on Which US Teen/Young Adult Internet
Users Watch Video, Fall 2015
% of respondents
YouTube
85%
Netflix
66%
Cable/satellite TV
62%
Facebook
53%
Instagram
37%
Snapchat
33%
Blu-ray/DVD
33%
Vine
27%
Hulu
25%
Digital buy/rent
22%
Amazon Prime Video
19%
Twitter
19%
Tumblr
14%
HBO Now/Sho.com
12%
Twitch
10%
Sports apps
9%
Sling TV
2%
Note: ages 13-24; includes clips, fails, movies, music videos, pranks, shorts,
TV shows, etc.; excludes videos of family, friends or other people known
personally
Source: Defy Media, "Acumen Report: Youth Video Diet" conducted by
Kelton, March 31, 2016
208657
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The latest quarterly data from Netflix showed the service

continued to grow its US and overseas subscriber base
and revenues. US subscribers grew to 45.7 million in Q1
2016, up from 43.4 million in Q4 2015. As has been the
case for several years with Netflix, non-US subscriber
growth was steeper, reaching nearly 32 million in Q1
2016, up from 27.4 million the previous quarter.
Digital Video Platforms Used to Watch Live Events

Among US Internet Users, March 2016
% of respondents
Facebook
10.2%
YouTube
10.1%
Periscope
4.6%
Twitter
Paid Netflix Streaming vs. DVD Subscriptions

Worldwide, US vs. Rest of World, Q2 2013-Q1 2016
millions
Streaming subscriptions
DVD subscriptions
US
Rest of world
Worldwide
US
Q2 2013
28.62
7.01
35.64
7.37
Q3 2013
29.93
8.08
38.01
7.01
Q4 2013
31.71
9.72
41.43
6.77
Q1 2014
34.38
11.76
46.13
6.51
Q2 2014
35.09
12.91
47.99
6.17
Q3 2014
36.27
14.39
50.65
5.90
Q4 2014
37.70
16.78
54.48
5.67
Q1 2015
40.31
19.30
59.62
5.47
Q2 2015
41.06
21.65
62.71
5.22
Q3 2015
42.07
23.95
66.02
4.97
Q4 2015
43.40
27.44
70.84
4.79
Q1 2016
45.71
31.99
77.71
4.65
Note: numbers may not add up to total due to rounding

Source: Netflix, April 18, 2016
208855
3.3%
Instagram
Snapchat
3.2%
2.9%
Note: ages 18+

208548
www.eMarketer.com
Cowen also tracked digital video platforms used by US

internet users to watch sports content and found YouTube
once again in front, followed by Facebook. Twitter was
third, but its presence in live sports is likely to get a boost
this fall, when its deal with the NFL to carry Thursday
Night Football games takes effect.
Digital Video Platforms Used to Watch Sports Content
Among US Internet Users, March 2016
% of respondents
YouTube
www.eMarketer.com
In related news, Netflix grew its worldwide streaming

revenue to $1.81 billion in Q1 2016, up from $1.67 billion
in Q4 2015. Both the US and non-US markets showed
increased revenues, with growth being greater in
the latter.
Live Streaming
Over the past year, live video has been the subject
of intense interest from marketers, publishers and
consumers. This fast-emerging area of the streaming
space took center stage at the NewFronts in 2016, and
data providers are starting to quantify its appeal.
Cowen and Company found that Facebook and YouTube
were virtually tied as digital video platforms most used
by US internet users to watch live events. This is an
indicator of how quickly Facebook has stepped into this
arena, with a beta test of its Facebook Live service in
December 2015, followed by a full US rollout in January.
Twitter-owned Periscope was third, followed by Twitter
itself, Instagram and Snapchat.
15.6%
Facebook
12.3%
Twitter
5.6%
Instagram
1.8%
3.9%
Snapchat
Note: ages 18+

208547
www.eMarketer.com
An April 2016 survey by CivicScience found, predictably,

that the highest incidence of Facebook Live usage was
among younger US internet users. The study noted that
36% of respondents who had used Facebook Live were
under 25. But surprisingly, the next biggest contingent
was the 35-to-54 age groupa cohort that also had the
highest percentage of users who said they planned to try
Facebook Live.
US Internet Users Who Have Used Facebook Live, by

Age, April 2016
<25
25-34
35-54
55+
I've used it
36%
17%
31%
16%
I haven't used it, but I plan to
29%
21%
37%
13%
I haven't used it and I'm not interested
15%
16%
35%
34%
I haven't heard of this
24%
16%
32%
28%
CONTENT
Note: numbers may not add up to 100% due to rounding; read as among
respondents who said they have used it, 36% were <25
Source: CivicScience as cited in company blog, April 28, 2016
209778
www.eMarketer.com
An April 2016 survey of US adult Facebook users by the

Huffington Post noted a relatively muted response to
Facebook Live, with 77% of respondents saying they
would not use the platform. Only 7% of those polled
said they would use the service, and 16% said they
werent sure.
Yes
7%
Not sure
16%
No
77%
Note: n=789 ages 18+

Source: Huffington Post survey conducted by YouGov, April 26, 2016
210587
www.eMarketer.com
Music continues to be the leading content type on

YouTube, while on Facebook content from family and
friends is the biggest draw. This differentiation shows
these platforms have complementary strengths.
US Facebook Users Who Would Post Live Video on

Facebook, April 2016
% of respondents
Streaming services and media publishers are creating

more original content than ever before. These
digital originals tend to be full-length shows that go
head-to-head with traditional programming.
Shows launched by digital streaming services and

media brands will continue to steal the thunder from
their counterparts on TV and cable.
The most resounding message from the 2016 NewFronts

was the sheer volume of premium digital video content
from providers that ranged from established players
such as YouTube and Hulu to digital-first brands including
BuzzFeed and AOL to companies better known for their
print franchises, such as Hearst Corporation, Time Inc.,
Cond Nast and The Economist Group. Many of these
companies are going beyond short, viral-oriented clips
and into full-length programming meant to compete with
mainstream TV.
In March 2016, there was a relatively even distribution
of viewing among the three main categories of digital
video content: TV shows, amateur clips and original digital
video content. The IAB/GfK study cited earlier found
that among US digital video viewers 18 and over, 30%
watched amateur clips, 29% watched TV online and 26%
watched original digital video. This is a clear indicator of
the pervasiveness of digital video in all its stripes as well
as the logic of a multiplatform, multiscreen approach by
programmers and advertisers.
Types of Digital Video Viewed by US Digital Video

Viewers, by Age, March 2016
TV online*
52%
20%
29%
Amateur**
47%
Cowen and Company tracked content types on YouTube

and Facebook and found, predictably, that YouTube led in
music, entertainment and kids content, while Facebook
was stronger in news and material from family and
friends. This is an indicator that for all the competitive
friction between these services, they continue to be
strong in different areas and are likely seen by marketers
as mostly complementaryto each other and to linear TV.
23%
Types of Video Content Watched on Facebook vs.

YouTube Among US Internet Users, March 2016
% of respondents
30%
Original digital video***
40%
YouTube
Facebook
Music
72%
38%
Entertainment
64%
55%
Educational/instructional
37%
17%
News
26%
42%
Content from family/friends
20%
66%
Sports
20%
19%
Kid's programming
14%
5%
Live events
13%
16%
Other
17%
11%
20%
26%
18-34
35+
Total 18+
Note: monthly; *network TV shows online or shows found on sites like

ABC.com, Hulu.com or HBO.com; **created by regular people and looks
like it is homemade; ***professionally produced video for ad-supported
online distribution and viewing only (not TV); excludes original digital video
that is not ad-supported (e.g., Netflix original series)
210255
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Original digital video content has many advantages for

digital video viewers, of which the most salient is the
ability to watch on their own schedules, according to
the IAB/GfK study. Other benefits were the absence of
commercials (or at least lighter ad loads compared with
linear TV), the presence of new/different/original content,
the added variety (again, presumably compared with
traditional fare) and the lack of censorship. Interestingly,
these are some of the assets that premium cable outlets
such as HBO brought to the table a generation ago.
Note: ages 18+; in the past 30 days

208549
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Reasons that US Digital Video Viewers Prefer Viewing

Original Digital Video* over Linear Primetime** TV
Shows, March 2016
% of respondents
Ability to watch on my schedule
62%
No/less commercials
45%
New/different/original content
More variety
Uncensored
39%
36%
35%
Note: n=246; ages 18+ who watch both primetime shows on traditional TV
and original digital videos; *professionally produced video for ad-supported
online distribution and viewing only (not TV); excludes original digital video
that is not ad-supported (e.g., Netflix original series); **between
8pm-11pm
210254
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RELATED EMARKETER REPORTS

US TV and Digital Video StatPack: Ad Spending
Data and Audience Trends for Broadcast, Pay and
Over-the-Top TV
Video Ads in Social Media: With a Full Slate of Ad
Products, the Social Properties Take Aim at TV
Digital Ad Spending Benchmarks by Industry: The
Complete eMarketer Series for 2016
Television Update, Q1 2016: In Advance of the
Upfronts, Four Changes on the Horizon
Digital Video for Brands in the US: Challenges
to Consider and Questions to Ask Ahead of
the NewFronts
EDITORIAL AND
PRODUCTION CONTRIBUTORS
Cliff Annicelli
Michael Balletti
Joanne DiCamillo
Dana Hill
Stephanie Meyer
Kris Oser
Heather Price
John Rambow
Allie Smith
Managing Editor, Reports

Copy Editor
Senior Production Artist
Director of Production
Senior Production Artist
Deputy Editorial Director
Senior Copy Editor
Executive Editor, Reports
Director of Charts
Q1 2016 Digital Video Trends: Monetization, Audience,

RELATED LINKS
Advertiser Perceptions
Akamai
AOL
CivicScience
Cowen and Company
Defy Media
Extreme Reach
FreeWheel
GfK
Horowitz Research
Hub Research
Huffington Post
Interactive Advertising Bureau (IAB)
MarketingCharts
Millward Brown Digital
Netflix
NewBay Media
Nielsen
RBC Capital Markets
Tremor Video
TVfreedom
Verto Analytics
Videology
Vindicia
Zogby Analytics
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DIGITAL VIDEO

DIGITAL VIDEO TRENDS Q2 2016: MONETIZATION, AUDIENCE, PLATFORMS

As US digital video ad spending continues to

US TV* vs. Digital Video** Ad Spending, 2016-2020

On the subscription side of monetization, Hulu will

WHATS IN THIS REPORT? This report covers key events

KEY STAT: TV advertising remains the largest single

DIGITAL VIDEO TRENDS Q2 2016: MONETIZATION, AUDIENCE, PLATFORMS AND CONTENT

2016 EMARKETER INC. ALL RIGHTS RESERVED 2

Ways in Which US TV/Video Professionals* Plan to

US digital video ad spending will continue to grow at a

What to look for in Q3 2016:

Q2 trends will continue, including more spending on

Note: *who have launched or intend to launch direct-to-consumer video

Research firm Advertiser Perceptions found that 38%

eMarketer expects US digital video ad spending will see

$68.54 $68.88 $70.60 $72.01 $73.81 $75.29 $77.17

$9.84 $11.72 $13.39 $15.15 $16.69

US TV* vs. Digital Video** Ad Spending, 2014-2020

Source: Advertiser Perceptions, "Video Advertising Report: Wave 4, Winter

The same study found 72% of marketers planned to

A NewBay Media study sponsored by Akamai showed

DIGITAL VIDEO TRENDS Q2 2016: MONETIZATION, AUDIENCE, PLATFORMS AND CONTENT

2016 EMARKETER INC. ALL RIGHTS RESERVED 3

Leading Brands that US Marketers Intend to Use for

An April 2016 study from ad tech firm Videology showed

Viewthrough rate (VTR)

Clickthrough rate (CTR)

Note: in the next 12 months

A March 2016 survey of US agency and marketing

47% of respondents bought digital video inventory

Cost per action (CPA)

Note: represents activity on Videology's platform, broader industry metrics

A Q1 2016 study by ad platform Extreme Reach found the

47% of respondents planned to shift budget from

The average share of original digital video content

DIGITAL VIDEO TRENDS Q2 2016: MONETIZATION, AUDIENCE, PLATFORMS AND CONTENT

Note: represents activity on the Extreme Reach platform, broader industry

Although the average viewability rate did not change

2016 EMARKETER INC. ALL RIGHTS RESERVED 4

Viewability Rate for Digital Video Ads Worldwide*, by

Note: represents activity on the Extreme Reach platform, broader industry

An April 2016 survey of US internet users from research

Although the Extreme Reach data shows a distinct

Monthly Amount that US Internet Users Would Expect

Music streaming services***

DIGITAL VIDEO TRENDS Q2 2016: MONETIZATION, AUDIENCE, PLATFORMS AND CONTENT

Note: n=1,004; if all providers in each category started charging

Among the various services available, OTT video led

2016 EMARKETER INC. ALL RIGHTS RESERVED 5

Types of Paid Subscription Services to Which US Paid

US Internet Users Who Subscribe to Pay TV or

Over-the-top (OTT)/video-on-demand (VOD) (Amazon Prime Video,

Cable (e.g., Time Warner, AT&T U-Verse, Verizon FiOS)

Satellite (e.g., DirecTV, Dish Network)

Shopping (Amazon Now/Prime, Google Express)

Streaming/online (e.g., Hulu, Netflix, Amazon Prime Video)

Premium cable (e.g., HBO, Showtime, ESPN RedZone)

Print media (Amazon Prime/Kindle Unlimited)

Note: n=2,047 ages 18+

Professional services (Dropbox, Office 365)

Lifestyle (Birchbox, Fabletics, Dollar Shave Club)

A December 2015 survey of US internet users from US

DIGITAL VIDEO TRENDS Q2 2016: MONETIZATION, AUDIENCE, PLATFORMS AND CONTENT