Video Accounts For 50% of Twitter’s Ad Revenue

Twitter has been pushing hard into video and its paying off. The company announced today that it has beat forecasts for Q1 2018, helped by a 53% jump in international revenue, which was led by strength in the Asia-Pacific region. Twitter attributes revenue growth in the region being primarily driven by growth in video in Japan and performance ad products in its China export market.

The company says that video, which was its fastest-growing ad format in Q1 (again), accounted for more than half of its $575 million in ad revenue for the quarter.

Total ad engagements for the company increased 69% year-over-year, resulting from increased aggregate demand, continuing mix shift toward video ad impressions, and improved CTR, which grew on a year-over-year basis across the majority of ad types as ad relevance continues to improve. CTR also benefited from the ongoing growth of more engaging video product features in Q1 — such as the Video Website Card and Video App Card — says the company.

Going forward, the company plans to remain focused on online video to drive revenue, it also says it will introduce new ways to buy ads on the platform. Other revenue priorities for Twitter include improving its core ad offerings through better performance and measurement, including ad platform improvements, self-serve measurement studies, and third-party accreditation; and continuing to grow DES revenue through its product and channel segmented go-to-market approach.

Other key numbers from the earnings report:

– Increase of 6 million monthly active users from the previous quarter
– 336 million monthly active users Total
– $665 million in quarterly revenue (down 67 million from the prior quarter)
– $575 million in advertising revenue
– 69 million monthly active users in the United States
– Profit was $61 million
– Cost per engagement (CPE) was down 28 percent from the year prior

Top 10 pay-TV operators to lose $20bn

Despite adding 84 million subscribers between 2017 and 2023, subscription and PPV revenues for the world’s top 517 pay-TV operators will fall by $18 billion (€14.67bn) to $183 billion, according to analyst firm Digital TV Research. From the total, 29 pay-TV operators earned more than $1 billion in revenues in 2017, but this total will drop to 25 by 2023.

About $20 billion of the revenue losses will fall to the top 10 players; bringing their total down to $87 billion. The pay-TV revenue share for the top 10 operators will fall from 53 per cent in 2017 to 48 per cent in 2023.

All of the top 10 operators in 2017 will lose revenues over the next five years. In fact, 168 of the 517 operators (32 per cent) covered in the Global Pay-TV Operator Forecasts report will lose subscription and PPV revenues between 2017 and 2023.

Pay-TV subscriptions for 517 operators with 747 platforms [132 digital cable, 126 analogue cable, 286 satellite, 137 IPTV and 66 DTT] across 135 countries covered in the report will increase from a collective 880 million in 2017 to 967 million by 2023. These operators took 87% of the 1,006 million global subscribers by end-2017, with this level expected to inch up to 88% of the 1,100 million total by 2023.

“The good news is that 15 operators will add more than $100 million between 2017 and 2023, with China Telecom up by $1.4 billion,” advised Simon Murray, Principal Analyst at Digital TV Research. “However, five operators, including four from the US, will lose more than $1 billion in revenues. Seven of the top 10 losers will be in the US.”

Top 10 operators by revenues ($ million)

Operator Country 2017 Operator Country 2023
1 AT&T (total) USA 30,740 1 AT&T (total) USA 23,577
2 Comcast (total) USA 20,017 2 Comcast (total) USA 15,433
3 Charter merged (total cable) USA 15,589 3 Charter merged (total cable) USA 11,942
4 DISH Network (satellite) USA 12,310 4 DISH Network (satellite) USA 10,381
5 China Radio & TV (total) China 8,562 5 China Radio & TV (total) China 7,405
6 Sky (satellite) UK 5,258 6 Sky (satellite) UK 4,613
7 Verizon Fios (IPTV) USA 3,857 7 China Telecom (IPTV) China 3,753
8 Cox (total) USA 3,691 8 Sky (satellite) Brazil 3,662
9 Sky (satellite) Brazil 3,586 9 Verizon Fios (IPTV) USA 3,268
10 Altice USA (total cable) USA 3,190 10 Cox (total) USA 2,829

Source: Digital TV Research

Global pay-TV revenues ready to plunge

After peaking in 2016 at $205 billion, and despite the number of pay-TV subscribers projected to rise by 9% over the next five years, global pay-TV revenues are set to fall by 11% to $183 billion by 2023, says a report from Digital TV Research.

The Global Pay-TV Revenue Forecasts report says that the key driver for the decline in revenues per subscriber is due to more homes converting to bundles. It estimates that eight of the top ten countries will lose pay-TV revenues between 2017 and 2023, while revenues will decline in 47 of the 138 countries covered in the report between 2017 and 2023. Twelve countries are set to lose more than 10% of their revenues leading to a total global decline of $19 billion.

Looking at specific territories, Digital TV Research found that US pay-TV revenues peaked in 2015, at $102 billion and forecasts a $22 billion decline between 2017 and 2023 to take its total down to $75 billion. By contrast, China will gain nearly $1 billion in pay-TV revenues between 2017 and 2023 to bring its total to $13 billion while India will provide the largest increase in pay-TV revenues at $1.6 billion. Revenues will more than double for six countries between 2017 and 2023. Eight of the top ten fast-growth nations by percentage increase will be in Africa.

On platforms, Digital TV Research believes that satellite TV and digital cable TV revenues will continue to be broadly similar. Revenues for the former were $83 billion in 2017; falling to $77 billion by 2023 and digital cable TV is set to supply $76 billion in 2023; down from $85 billion in 2023. The Global Pay-TV Revenue Forecasts report rates IPTV as the pay-TV revenue winner, with revenues increasing from $25 billion in 2017 to $27 billion in 2023.

European OTT video revenue to double by 2021

The media industry in Europe is undergoing rapid transformation with increasing popularity of OTT video services that will see revenue double by 2021, according to Frost & Sullivan research.

Increasingly ubiquitous connectivity, progressive consumers, and regulatory initiatives around a ‘Digital Single Market (DSM)’ have intensified the competition among several international companies, local start-ups, pay-TV operators and broadcasters who offer OTT video services. As the market moves towards maturity, keeping viewers engaged through personalised content delivery and targeted advertisements will be the key to minimising churn, while pricing and technological innovation will play a key role in defining the market over the next five years.

“Despite having an early mover advantage, multi-country service providers such as Netflix, Amazon and Sky battle for viewership with regional service providers such as Maxdome in Germany, CanalPlay in France, Ziggo in the Netherlands, and new entrants such as Knippr, Molotov. The 450+ service provider ecosystem in the continent is expected to consolidate as price wars and content wars intensify, eventually forcing smaller participants to exit or be acquired by the bigger ones.” said Digital Transformation Research Analyst Swetha Ramachandran Krishnamoorthi.

“Parts of the European market are approaching maturity in terms of OTT content viewership – OTT video is increasingly watched not just on handheld devices but also on connected television. Such mainstream adoption presents challenges of a different sort – content providers need to constantly innovate on user interface and content exclusivity to compete with service providers across all media,” added Senior Research Director, Vidya S Nath.

Regional trends shaping the European OTT video services market include: OTT video adoption is already high in Western European countries such as the UK, France and the Netherlands. Expected CAGR in these markets will be around 15 per cent in viewership base. Newer market entrants are targeting a smaller percentage of population with niche offerings. In contrast, markets including Germany, Poland, Italy and the Nordic countries are at an early growth phase, as evident from the increasing number of new service launches and partnerships in the region, boosting the CAGR forecast to above 20 per cent.

US Market Ad Revenues Dip Amid Ongoing Concerns

National TV advertising revenues were down 1% in the second quarter — an improvement from the 3% decline in the first quarter. Yet challenges remain.

The estimates came from Brian Wieser, senior research analyst for Pivotal Research Group, and were based on recent second-quarter earnings results from major media companies.

“The traditional medium is unlikely to return any time soon,” he writes in a recent note, estimating a drop of 1% to 2% for the remainder of 2017.

Although TV networks say there is “strong” pricing in scatter markets, near-term quarter-by-quarter buying of TV time proves “pricing does not necessarily reflect changes in demand.”

Scatter deals with higher pricing come mostly from scatter-only advertisers — which have higher cost bases — and can account for a higher percentage of spending. Changes in demand for TV ad inventory will not cause all advertisers to alter how they budget for the medium.

Wieser is critical of media companies that did not provide specific details about the health of the major TV advertisers. He said “many of the large advertisers that dominate TV are relatively weak at present — and not enough new advertisers are emerging to replace older ones.”

The largest marketers on television — about 200 — account for around 90% of national TV revenues and about 60% of all TV.

“They are losing market share to companies that are smaller and structurally better positioned to spend money on digital media rather than TV,” he adds.

Although there are opportunities for growth — when it comes to new TV metrics, 35 days of time-shifted viewing versus three or seven days — Wieser doesn’t believe this will have a strong impact on TV networks.

read more here:
https://www.mediapost.com/publications/article/305612/national-tv-ad-revenues-dip-amid-ongoing-concerns.html

Facebook Raked in $9.16 Billion in Ad Revenue in the Second Quarter of 2017

Facebook reported advertising revenue of $9.16 billion in the second quarter of 2017, a 47 percent increase over the same quarter last year.

In its quarterly earnings report released today, the social giant beat analysts’ expectations with a total revenue of $9.3 billion—an increase of 45 percent year-over-year. Mobile now makes up around 87 percent of the company’s overall ad revenue, up from 84 percent in second-quarter 2016.

Earnings per share for the second quarter totaled $1.32, up from 78 cents during the same period last year.

The company also reported an increase in both daily and monthly active users, with daily active users totaling an average of 1.32 billion in June for a 17 percent increase year-over-year. Monthly active users also increased 17 percent year-over-year to total 2.01 billion as of June 30. (Facebook officially announced last month that it had hit the 2 billion mark.)

“We had a good second quarter and first half of the year,” Facebook CEO Mark Zuckerberg said today in a statement. “Our community is now two billion people and we’re focusing on bringing the world closer together.”

Facebook also reported an overall growth in head count. As of the end of last month, the company had 20,658 employees—an increase of 43 percent year-over-year.

While second quarter earnings were plenty strong, it does show a bit of deceleration—the company reported a 59 percent increase in overall revenue between the second quarters of 2015 and 2016. That year-over-year deceleration falls in line with what a few notable agencies reported to Adweek late last month—slower growth in cross-client ad spend in the second quarter compared to previous years. (For years, the company has consistently reported an acceleration of revenue growth. Late last year, Facebook executives have warned that advertising revenue growth would slow, given the lack of room for ad load growth.)