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The average amount of time each day people will spend consuming online video will increase by 23.3 per cent in 2015 and by a further 19.8 per cent in 2016, according to the Online Video Forecasts, a new report by global media network services company ZenithOptimedia in conjunction with Newcast, ZenithOptimedia Group’s global branded content network.
This growth in video consumption is being driven by the rapid rise of smartphone and tablet penetration across the globe, together with the resulting changes in consumer behaviour. Video consumption on mobile devices (such as smartphones and tablets) is forecast to grow by 43.9 per cent in 2015 and 34.8 per cent in 2016. Meanwhile, video consumption on non-mobile devices will continue to grow, though at more moderate rates, increasing by 9.5 per cent in 2015 and 6.5 per cent in 2016.
ZenithOptimedia expects mobile to become the main platform for viewing online video next year. In 2012 mobile devices accounted for 22.9 per cent of time spend watching online video worldwide. By 2014, this proportion had risen to 40.1 per cent, and we expect it to reach 52.7 per cent in 2016 and 58.1 per cent in 2017.
Total number of regular linear TV viewers to start declining in 2016
ZenithOptimedia predicts that the number of people regularly watching traditional, linear TV will peak this year, and will start to decline for the first time in 2016. It forecast that the number of regular linear TV viewers will rise 3.1 per cent in 2015 but then shrink by 1.9 per cent in 2016 and 0.9 per cent in 2017. As reported in Zenith Optimedia’s Media Consumption Forecasts 2015 report (published in June), the amount of time people spend watching linear TV has been in slow decline for several year; it now predicts that next year, the number of viewers to start to decline as well.
The number of regular linear TV viewers has been in decline in France and Russia since 2013, in the UK and the US since 2014, and is expected to start to decline in China this year. The decline of linear TV viewing is in direct correlation with the increasing quantity and quality of content available online, both from short-form platforms like YouTube and long-form platforms such as Netflix. ZenithOptimedia forecasts that the number of regular online video viewers will increase by 5.8 per cent in 2015, 5.1 per cent in 2016 and 5.3 per cent in 2017.
The number of regular online video viewers is increasing at double-digit rates in 12 of the markets included in this report, including in major markets such as China (27.2 per cent), France (50.0 per cent), Germany (27.5 per cent) and the US (12.3 per cent).
Advertising expenditure on online video will soon account for an eighth of total Internet adspend
Online video’s share of global digital adspend is rising rapidly: it was 8.8 per cent in 2012 and 10.2 per cent in 2014; by 2017 ZenithOptimedia expects it to rise to 12.8 per cent, an eighth of all Internet adspend. Online video is the fastest-growing category of internet advertising: ZenithOptimedia forecasts it to grow by 28.9 per cent to US$16.1 billion worldwide in 2015, followed by 22.5 per cent growth in 2016 and 19.7 per cent growth in 2017, when it will total US$23.7bn.
The US online video market is by far the largest: US$8.5 billion in 2015, 52.9 per cent of the global total, although we expect its share to drop to just below half of the global total – 49.9 per cent – in 2017. The US also tops – jointly, with Italy – the list of markets with the highest proportion of total Internet spend going to online video (16.5 per cent each in 2015), followed by Taiwan (15.8 per cent) and Latvia (13.0 per cent).
Mark Waugh, Global Managing Director, Newcast, said, “Consumers all around the world are rapidly embracing online video, because it offers them a near limitless array of engrossing content. Some of the keenest users are the young, affluent viewers who are hardest to reach on television. Brands are finding online video a particularly effective way to reach these valuable audiences, not just with advertising, but also with branded content; content that can inform or entertain consumers in a deeper and richer way than is possible with short, interruptive ads.”