65% of Digital Media to be Traded Programmatically Next Year

Programmatic ad spend will have grown by 24 percent over the course of this year, and will grow a further 19 percent next year, according to Zenith’s Programmatic Marketing Forecasts published today. This will mean that in 2019, 65 percent of all digital media will be traded programmatically. But while the growth of programmatic trading continues to be strong, Zenith says it’s slightly slower than expected, due to a mixture of new data laws and investment patterns within the industry.

Zenith says growth is being driven by the fact that the breadth of formats which can be traded programmatically is improving all the time, specifically with mobile video and audio formats increasingly available programmatically.

The company believes that very soon there will be very little which cannot be traded programmatically, and from there is it simply a question of how quickly each country embraces total automation. Zenith predicts that by 2020, 99 percent of digital media will be traded programmatically in Canada.

“We expect all markets to follow Canada and use programmatic trading for all digital media transactions eventually,” said Zenith’s report. “Indeed, it’s only a matter of time before programmatic trading becomes the default method of trading for all media.”

For the moment, adoption of programmatic trading is highest in the US, where Zenith says 83 percent of all digital media will have been traded programmatically this year. Given the scale of the US’s total digital ad spend, this means nearly half of all programmatically traded ad dollars will have been spent in the US ($40.6 billion out of a global total of $84 billion).

Canada comes in second, with 82 percent of digital media traded programmatically. In Europe, the UK and Denmark lead the way, with 78 percent and 75 percent of digital dollars spend programmatically in each country respectively.

Progress towards total adoption has been slightly slower this year than expected, which Zenith attributed to a couple of factors. One was the introduction of the EU’s general data protection regulation (GDPR) which restricted the data available for programmatic transactions, making it simultaneously more expensive and less attractive.

But Zenith thinks the primary cause was that advertisers have been investing heavily in making programmatic trading more effective, at the expense of ramping up the scale of programmatic buying as quickly as they might otherwise have done.

read more here: videoadnews.com

OTT to Make up 46% of Western Europe TV Revenue by 2023

Over-the-top (OTT) revenues are growing fast in Western Europe. According to Digital TV Research, OTT revenues for TV shows and movies (including ad-supported content) will more than double from $10 billion in 2017 to $23 billion in 2023. At that time, OTT will count for 46 percent of total TV revenue in the region.

During the same period, pay TV revenues in Western Europe will fall by $2 billion. While the trend is clear, don’t look for OTT to eclipse pay TV for several more years.

“I don’t think that OTT revenues will overtake traditional pay TV until about 2027 so there is still some life left in traditional pay TV. There hasn’t been much cord-cutting in Western Europe,” says Simon Murray, principal analyst at Digital TV Research.

Looking only at subscription services, Digital TV Research says revenues will reach $12.5 billion in Western Europe by 2023. That’s an increase from $4.4 billion in 2017. While it’s a fast-growing area, it’s dominated by one player: Netflix counted for 52 percent of the pool in 2017, and will take 57 percent by 2023.

“Western Europe’s traditional pay TV sector is maturing rapidly, but there is still a lot of growth to be had in OTT—including AVOD and SVOD,” Murray says. “AVOD is particularly strong in Western Europe given the market positions of the free-to-air broadcasters. However SVOD revenues overtook AVOD in 2016.”

Read the full report here.

Global SVOD subscriptions to reach 777 million

Worldwide paying SVOD subscriptions will increase by 409 million between 2017 and 2023 to total 777 million. Eleven countries will have more than 10 million SVOD subscriptions by 2023.

China and the US will together account for more than half the world’s SVOD subscriptions by 2023. China will have the most SVOD subs from 2019 – despite multiple subscriptions being commonplace in the US. China will have 235 million SVOD subscribers by 2023 – up from 97 million in 2017.

Simon Murray, Principal Analyst at Digital TV Research, said: “The US will have 208 million SVOD subscriptions by 2023; up by an impressive 76 million on 2017 despite its relative maturity. Its share of the global market will fall from 36% in 2017 to 27% by 2023.”

By 2023, Netflix will contribute 192 million subscriptions (25% of the 777 million subscriptions), Amazon Prime Video 120 million (15%), China 235 million (30%. Neither Netflix or Amazon Prime Video operate in China) and 230 million “others” (30%). Netflix will add 82 million subs between 2017 and 2023.

Amazon Prime Video launched in 200 countries in late 2016 – like Netflix, not in China. We forecast 120 million Amazon Prime Video’s subscribers by 2023 – double the 2017 total. However, 110 million of the 2023 total will be in Amazon Prime territories, and therefore will not directly pay for the video platform.
SVOD revenues will reach $69 billion by 2023; up by nearly $44 billion since 2017. The US will remain the SVOD revenue leader by a considerable distance – adding $17 billion between 2017 and 2023 to take its total to $29 billion.

read more here: digitaltvnews.net

Study: Rising global demand for premium OTT

A report from business-to-consumer subscription management solutions specialist Vindicia has found that premium OTT subscription revenue is quickly rising across four regions: Western Europe, USA, Latin America and Asia Pacific, and that consumer demand for premium OTT services will be driven by local, live and linear content, as well as by easier payment solutions.

The report, The Prospects for Premium OTT, carried out by international research and strategy consulting firm MTM, revealed that premium OTT in Western Europe will grow strongly in the next three years, as connected consumers embrace not only services from global OTT players, but also new subscription services from local and regional broadcasters, and direct-to-consumer services from content brands. The UK will remain the largest market for premium OTT in Western Europe, with revenues forecast to rise from $1.18 billion (€1.32bn) in 2017 to $1.63 billion by 2020.

Meanwhile, in the US, premium OTT subscription revenue will surge past $21.2 billion by 2020, up from $16.4 billion in 2017. While Netflix, Amazon and Hulu will dominate revenues, new competition will come from direct-to-consumer offerings from the likes of Disney, specialist services such as Crunchyroll and WWE, and live sports delivered via OTT, according to the report.

Revenues from premium OTT services will also grow rapidly in Asia Pacific, albeit from a low base in some cases. Thailand, for instance, will see revenues rise from $66 million in 2017 to $108 million in 2020, while Indonesia will expand from $26 million to $ 72 million in the same period, the report found. The market for premium OTT services in Asia Pacific will be driven by pan-regional players, such as HOOQ, Viu and iflix, that focus on local content and are priced for local audiences.

The premium OTT market in Australian is one of the largest in Asia-Pac and will continue to see considerable growth, with revenues reaching $420 million by 2020, up from $280 million in 2017, the study found. Netflix will be the dominant subscription service in Australia for the foreseeable future.

In Latin America, improved broadband connectivity is driving growth in premium OTT subscriptions, where local content offerings are bundled with Internet access. However, greater connectivity is also encouraging content piracy. Mexico will become the largest market in Latin America for premium OTT services by 2020, with revenues forecast to reach $678 million, up from $410 million in 2017, according to the report.

“As revenues for premium OTT services increase in all regions around the world, consumer demand will be driven by local, live and linear content,” said Kris Nagel, Head of Vindicia. “Consumers will become subscribers for the right price, the right content and the right experience. As part of that experience, consumers will also demand frictionless payment solutions. Premium OTT services that can seamlessly integrate and manage payment platforms—and make payments almost invisible to the user—will see the greatest subscription growth going forward.”

download the full report here.

read more here: advanced-television.com

W Europe OTT revenues $23bn+ in 2023

Western European OTT TV episode and movie revenues will reach $23.02 billion (€19.93bn) in 2023; more than double the $9.84 billion recorded in 2017, according to the Western Europe OTT TV & Video Forecasts report from Digital TV Research. Revenues for 18 countries covered by the report are expected to climb by $2.63 billion in 2018 alone.

“The UK is the largest OTT revenue earner in the region by some distance,” advised Simon Murray, Principal Analyst at Digital TV Research. “Its $2.98 billion generated 30 per cent of the 2017 total. The UK’s $6.80 billion in 2023 will represent a similar proportion.”

SVoD became the region’s largest OTT revenue source in 2016 by overtaking AVoD. SVoD’s share of the total will reach 54 per cent by 2023, up from 45 per cent in 2017.

SVoD revenues will almost triple by reaching $12.47 billion in 2023 – up from $4.44 billion in 2017. The UK will remain the SVoD revenue leader by some distance – generating as much as second-placed Germany and third-placed France combined by 2023.

The Western Europe OTT TV & Video Forecasts report estimates 98.85 million SVoD subscribers by 2023, up from 50.34 million at end-2017. Nearly 15 million subscribers will be added in 2018 alone, with 11 million more expected in 2019.

By 2023, 69.3 per cent of Western European TV households will subscribe to an SVoD platform; up from 38.4 per cent at end-2017. [Gross subscriptions. If a household takes two subscriptions then it is counted as two subscribers]. Norway will have the highest proportion at 104.8 per cent by 2023. Germany, Italy, France and Spain will all fall below the regional average by 2023.

Netflix will remain the largest SVoD platform by some distance, with 49.75 million paying subscribers in 2023 – or half of the region’s total. This is the same as the 2017 proportion. The 2023 total includes 22 million Amazon Prime Video subscribers.

read more here: advanced-television.com

Forecasts PwC: OTT Shows 10% Annual Growth Over Next 5 Years

Look for the over-the-top (OTT) video market to show impressive growth over the next five years. PwC released its Global Entertainment and Media outlook 2018-2022, and forecasts that the OTT space will show a compound annual growth rate (CAGR) of 10.1 percent. The only segment in the entertainment space with a higher CAGR is virtual reality with 40.4 percent, but that’s coming from a low starting point.

As the chart below illustrates, internet advertising, video games/e-sports, and internet access will also see strong gains. Only magazines and newspapers show a decline.

While Netflix is the dominant player in the OTT space and Amazon also invests heavily in content, PwC notes that Apple is making moves to be the third biggest international OTT company by sinking $1 billion in original content. Having exclusive content and the rights to high-profile sports is crucial for expanding subscribers and maintaining market share, the report says.

The growth of streaming is changing the revenue model for video, as more consumers, especially well-off consumers, move to ad-free subscription services. Over 80 percent of home video revenue will come from OTT services by 2022, PwC forecasts.

The report emphasizes the convergence taking place in the entertainment market, where companies are changing their business models to target viewers directly. While these companies have access to more data than ever, the challenge is to keep it safe and maintain the public’s trust.

“As more E&M companies enter direct commercial relationships with customers, whether selling products inside video games or signing up subscribers to OTT apps, they are assuming more responsibility for the protection of credit card numbers,” the report says. “In an age of large-scale hacks, it is natural for users to question whether it makes sense to transact so freely.”

you can find the report here.

Native display ads to spike by a third in 2017

Native digital display ad spending in the US will grow 36.2% this year to reach $22.09 billion, according to eMarketer’s inaugural forecast.

For the first time this year, native ad spending will make up more than half (52.9%) of all display ad spending in the US, the firm said.

“Growth of native digital display is being driven by publishers’ pursuit of higher-value and more mobile-friendly inventory, as well as by advertisers’ demands for more engaging, less intrusive ads,” said eMarketer principal analyst Lauren Fisher.

An overwhelming portion of US native display ad spending goes to social networks, driven mainly by Facebook. This year, native social network display ad spending will reach $18.59 billion, representing 84.2% of all US native display. Importantly, social’s share of native is falling and will drop to 82.2% next year, as non-social (specifically in-feed and sponsored content) grows faster.

“We’re seeing a huge ramp up in non-social publishers adopting in-feed ads and video,” Fisher said. “This, coupled with continued advancements on the programmatic native front, will accelerate non-social native ad spending.”

Since native advertising is largely purchased on social platforms, it’s also almost entirely mobile. Native mobile display ad spending will reach $19.50 billion this year, representing 88.3% of all native advertising – with that share growing. And native mobile will represent 64.5% of all US mobile display ad spending this year.

“Greater demand for native formats such as in-app rewarded video ads, and greater momentum around redesigning the mobile experience for a more in-feed and mobile-first world will also draw greater ad dollars to native inventory on mobile devices,” said Fisher.

Read more here:
https://www.rapidtvnews.com/2017032146566/native-display-ads-to-spike-by-a-third-in-2017.html#ixzz4bxt9KqJr