People viewing TV online are watching more commercials, which in turn is making more content available, according to a new report.
The fourth quarter Video Monetization Report from FreeWheel, which provides distributors and programmers with technology to manage and monetize content, also found that TV Everywhere is spreading, with the amount of live and long-form content being watched on an authenticated basis increasing rapidly.
Ad views in long-form content were up 86% in the fourth quarter compared to a year ago, according to FreeWheel. And the completion rates for 30 second spots and 15 second spots are above 90%. Both figures suggest that the old notion that online users won't tolerate commercials was false, and that the traditional TV business model holds up on digital devices even as the number of commercials per break rises. There were 3.2 ads per break in the fourth quarter compared to 2.8 ads a year ago.
"When you watch long-form programming and you watch it on your tablet or you watch it on your mobile phone, there's going to be commercials, and people accept it," says Doug Knopper, coCEO and cofounder of FreeWheel. "And we've seen that now quarter after quarter, year after year, that completion rates are high. That's obviously a good thing for the industry and consumers are accepting it, so more content is going out there, more devices are being watched in more places and being watched by more people. It's a nice virtuous circle that everybody benefits from."
At the same time, FreeWheel says there was a 148% increase in ad views in live content. About 80% of that live content was sporting events that can almost only be viewed by subscribing to a pay TV provider and authenticating online via a TV Everywhere program.
"Record numbers of viewers live-streamed major sporting events in 2013 supporting the notion that live event coverage is the strongest possible safeguard against cord cutting," the report said.
While industry executives complain about the slow pace of implementing TV Everywhere, ad views in authenticated content was up 268% as more programmers put content behind an authentication wall, according to the Freewheel report.
"TV Everywhere is being adopted and taking off and at probably a faster rate than most of the industry perceives," says Knopper.
"It's still a relatively low percentage of long-form volume, but it's rising quickly," adds Brian Dutt, FreeWheel's director of advisory services and the author of the report. "For some of our clients, almost all of their ad views are coming from behind an authentication wall. Others have been a bit slower to put the wall up."
The genres showing the biggest growth in ad views were documentary/reality programming at 66%, scripted drama at 64% and sports at 50%.
Viewing on mobile phones and tablets is increasing its share of digital viewing versus desktop personal computers. With long-form content, 20% of viewing is now done on tablets while 14% is on mobile phones.
Unlike other forms of digital content, the vast majority of ad sales were done directly by the publishers of the content rather than ad networks or exchanges, which had only a 4.5% share, according to FreeWheel.