CEO Insights: 4 Industry Trends Impacting the Future of Streaming Video
Last month, I was invited to speak at TubeCon’s Industry Day in Helsinki, where I shared some of Verto Analytics’ latest insights about the online video industry and consumer trends. While I’ve already shared my views on the future of TV and even questioned the meaning of the term “television” itself, at TubeCon, I focused specifically on streaming video services and the consumption of video within mobile apps, which was also the topic of our latest Verto Index. Streaming video consumption is still the top entertainment-oriented online activity in the U.S. However, new devices, new services, and the overall evolution of user behavior are all having implications for online video usage. As part of my presentation at TubeCon, I highlighted four of the most important emerging trends in online video, and what they spell for the future of content consumption at large.
1. Cross-Device Behavior Extends to Online Video Streaming
Cross-device usage is becoming the standard in digital consumer behavior – according to Verto Watch data, while just 10% of U.S adult online users (ages 18 and above) own just a single mobile device, 44% of U.S adult online users own and actively use at least one smartphone, one tablet, and one PC device. And our data also shows that they way that consumers watch streaming video content is no exception: online video streaming has also evolved into cross-device activity. In fact, as many as six different device types account for at least 30 million monthly unique adult users using streaming video services every month. This list of devices includes Smart TVs and game consoles, in addition to PCs and mobile devices.
2. Different Devices Dictate Different Types of Viewing Behavior
While cross-device online streaming is becoming standard consumer behavior, not all devices are created equal – at least, not when it comes to video format. Verto data shows that different devices dictate different types of video format viewing behavior. Unsurprisingly, Smart TVs and over-the-top devices command the greatest share of long-form video viewing (videos exceeding 10 minutes in length), while the majority of viewing on smartphones (86% of time spent) tends to be on short-form videos (services where the focus is on shorter clips, like Youtube – although the boundaries between short-form and long-form focused services is becoming more blurred continuously). But our data also shows that PCs rack up a huge share of short-form video streaming: 92% of time spent streaming video on PCs is spent on short-form video.
3. Social Media Platforms are Encroaching on Video Platforms
Our latest Verto Index on Streaming Video ranked YouTube as the top service within the video streaming category based on monthly unique users. But it’s facing stiff competition from the social media sector: Facebook has exploited its position as the top social network and the most popular app in the U.S. as it expands into providing a platform for video content. During the first half of 2018, nearly 129 million users watched streaming video within the Facebook mobile app, just surpassing the 127 million users who watched video through YouTube’s flagship app. And with the global launch of Facebook Watch announced last month, Facebook seems poised to make even greater gains among streaming video viewers. And the phenomenon isn’t just limited to Facebook; the number of users watching in-app video content on other social media platforms is also catching up with those of established streaming media giants: for example, the number of consumers who watch in-app video content on platforms like Instagram and Twitter surpass the number of people who watch streaming video on Netflix’s app.
But while social media platforms are outstripping streaming video services in terms of sheer user numbers and reach, they have yet to succeed in terms of viewer engagement. While video playback accounts for about 85% of the user time spent within the Netflix and YouTube mobile apps, that share is only about 15%-25% in apps like Twitter, Facebook, or even Snapchat.
4. TV and Digital Aren’t Necessarily Competitors
As I stated earlier this summer, TV and online video aren’t the same thing – yet. And what’s more, they’re not necessarily competitors, either. While the amount of time that viewers spend watching streaming video beats out traditional broadcast TV on an hour-by-hour basis, 15% of of TV usage still includes simultaneous online usage during prime time. That opens a variety of opportunities for cross-screen and cross-device ad and engagement campaigns – not to mention a wide range of cross-platform user experiences that social media platforms have just begin to explore.
Moving Forward: How to Take Video Seriously
As cross-device consumer behavior continues to rise, we’re also seeing digital content – especially streaming video – increasingly expand across different platforms in an attempt to reach consumers wherever they are. Video streaming services reach dozens of millions of users on multiple digital device platforms nowadays, which means that user experience strategy should no longer just be focused on PC and mobile. While social media platforms may present an obvious opportunity for streaming video content, this shift is still in the early days of a battle for consumer attention. Even users on platforms like Snapchat, which originally gained attention because of its ephemeral video capabilities, spend the majority of their time on non-video content. However, the significant size of social media’s user base and the amount of time spent on the services overall still contribute to a significant share of overall digital video consumption.
In the meantime, can streaming video platforms develop new ways to maintain a lasting hold on viewer attention? For example, can video platforms evolve to better incorporate social features, sharing, and recommendations for their benefit? Social media services and messaging apps have already recognized the potential for video content as a killer feature; now, the onus is on video platforms to make this dynamic work the other way around.
Regardless, advertisers and agencies must take video seriously. Even though video streaming-focused services, like Amazon Prime and Netflix, are primarily subscription-dominated with the business model, particularly video content within the social platforms – whether it is sponsored, branded, or even social – pose significant opportunities for premium advertising in very targeted and programmatic ways.