Contributed by David Habben, Chief Strategist of Media, Akamai Asia Pacific & Japan
Singer Pharrell Williams ended 2013 with a 24-hour dance party. He released the video to his song “Happy”, which was the longest music video ever, having streamed for 24 hours. Viewers also had the option of either watching the video in real-time or a selecting a specific moment within the 24-hour period in the video.
It is rather surreal to experience such ground-breaking technology if you recall that it was only nine years ago when the first video clip was broadcasted on YouTube.
Online video consumption has become the fastest and largest mobile data traffic segment[1]. In fact, at Akamai, we have forecasted video traffic to increase by almost five times to more than 50 Tbps in the span of just three years (from 2012 – 2015). This growth was also echoed by fellow industry peer Cisco, which predicts that in 2016, 1.2 million minutes[2] of video (which is equivalent to watching Titanic 6186 times) will pass the Internet every second.
Growth of Online Video
Fundamentally, what supports this growth will be increased online accessibility and connection speed. Internet usage in Asia Pacific is growing at a faster rate than any other markets. As of last year, Asia contributed to more than 40 percent of the global Internet users[3]. It comes as no surprise that Asia is consistently well-represented based on findings released by Akamai. Not only do countries like South Korea, Japan, and Hong Kong have some of the world’s highest average connection speeds (10.8 – 13.3 Mbps), they are also three to four times faster than the global average connection speed of 3.3 Mbps.
Online video is changing the way how shows and movies are being consumed. It is hard to deny the appeal of online videos especially with the power to dictate when, what, where and how one wants to watch them. Suffice to say, 2013 was not a good year for TV. Business Insider declared it as the death of TV as the industry reported a 6.3 percent [4] decrease in world-wide shipments in TVs.
[quote style=”boxed”]Videos are also going mobile. As more users view content online via smartphones and tablets, online video viewership will be fueled by the increase in connected devices ownership.[/quote]
Videos are also going mobile. As more users view content online via smartphones and tablets, online video viewership will be fueled by the increase in connected devices ownership. We can expect this for Asia Pacific and Japan as the region enjoys some of the highest smartphone and tablet penetration rates in the world. According to Nielsen, smartphone penetration rates are reaching saturation points[5] in countries like Hong Kong and Singapore. Collectively, the region also reported an increase in tablet ownership, with most of the countries doubling its figures [6] in 2013.
The rise in online videos is also driven by increasing premium content and higher quality delivery. It has become almost a norm for many media producers to make their content available online, both live and on-demand. Having just ended my visit to this year’s CES, 4K (or Ultra High Definition) was definitely one of the hotly discussed topics. While the concept has been around for a while, one of the biggest hurdle to its adoption is the lack of 4K content. This looks set to change as new standards such as YouTube’s introduction of 4K (2160p) option in their video settings, as well as Netflix’s announcement of its plan to roll out 4K content, will enhance the overall online video viewing experience.
Game Changer
Nielsen made an announcement last year that it was taking into account viewing of programs via smartphones and tablets to its overall Nielsen TV rating. This major update underscores the importance of online video and the velocity of change it is affecting the industry. It is not news that companies are gradually moving away from TV, in search of new platforms to reach out to their customers. In fact, online advertising will be the only medium to see an increase, 6.3 percent to be exact in global advertisement spend by 2015.
Companies are taking the first step to move online but an ongoing challenge for many of them is keeping up with the insurgence of platforms and devices. Their priority is to reduce users’ abandonment during online advertisements. Akamai recently conducted a study on the effectiveness of online advertisement[7] and while we had a couple of surprises, they were very useful in helping our customers implement their advertising strategies.
It’s common assumption that viewers are likely to be more inclined to watch an advertisement during the weekends or perhaps in the evenings when they are more relaxed. Our study, however, disputed that and established that factors like the time of the day and day of the week do not affect advertisement completion rates substantially.
What would have a major impact on the completion rate would be the position of the advertisement. For instance, an advertisement placed in the middle of a program is likely to be better received than pre- and post-program. There is also greater interest from viewers to finish watching an online advertisement within longer programs (TV shows, soccer games etc.) as opposed to a sports highlight clip or viral video.
Companies might be deterred by the diverse, speedy and cluttered nature of online engagements to implement customized advertising. In contrast, online engagements are actually able to capture accurate and comprehensive details of your target audience. Case in point? The online advertisement effectiveness study.
[quote style=”boxed”]Two seconds is all it takes to lose a user’s attention, which could possibly be the loss of a potential customer. There are second chances in life but not for 91.8 percent of viewers whom we polled who will not return to the site within 24 hours of experiencing a failure. [/quote]
Capturing end users’ attention and increasing their engagements will be crucial for companies to stay visible as the online noise gets louder. Delivering high-quality video experiences should be a constant as abandonment rates increase when a user experiences slow-loading videos. Two seconds is all it takes to lose a user’s attention, which could possibly be the loss of a potential customer. There are second chances in life but not for 91.8 percent of viewers whom we polled who will not return to the site within 24 hours of experiencing a failure. With the next tablet or smartphone in the horizon, delivering consistent and the best video quality across all devices will be equally important.
Media analytics will play an important role in online advertising – knowing when your target audience goes online, what device they use to watch the video, the content they like etc. With live streaming rising in popularity, many companies are also looking to implement real-time advertising campaigns. Just imagine watching the live telecast of the Oscars online and information of Jennifer Lawrence’s gown appearing on your tablet.
Real-time interactivity will be the next frontier for online videos. Apart from Pharrell Williams’ latest musical endeavor, we are already seeing amazing progressions – a video that allows you to be even closer to the band at home than the concert goers, a video which has literally everyone singing Bob Dylan’s “Like a Rolling Stone” and a music video which incorporates a part of you. The evolution of online video is only in its infancy and I am very excited at the possibilities that lie ahead.
[1] http://www.ericsson.com/res/docs/2013/ericsson-mobility-report-november-2013.pdf
[2] http://newsroom.cisco.com/release/1197391/
[3] http://www.digitalmarket.asia/2013/07/over-40-per-cent-of-global-internet-users-are-from-apac-comscore/
[4] http://blogs.wsj.com/digits/2013/10/08/decline-in-global-tv-sales-expected-to-continue/.
[5] http://www.nielsen.com/us/en/newswire/2013/the-asian-mobile-consumer-decoded0.html
[6] http://www.mediaresearchasia.com/view.php?type=press&id=3184
[7] http://www.akamai.com/html/about/press/releases/2013/press_102213.html