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Press Coverage
Report: Hulu Owns 10 Percent Of The Online Video Ad Market
30-Jun-09
Source: paidContent.org
Hulu has kept a tight lid on its ad sales data over the past year, but a new report from Screen Digest suggests that the premium online video site brought in nearly $45 million in ad revenue in 2008. The report looks at the state of the ad-supported online TV market in the U.S.; Screen Digest says it was worth $448 million last year—and that Hulu owned about a 10 percent market share. Not surprisingly, the four major TV networks (ABC's Full Episode Player, CBS' Audience Network, NBC.com and Fox.com) commanded the most market share (and the most revenue) overall.
Arash Amel, Screen Digest's research director, digital media, says that their dominance will continue to fuel growth in the ad-supported online TV market (which includes entertainment, news, sports and events content)—with revenues topping $1.45 billion by 2013.
Still not enough to make up for lost TV revenues: Despite the growth surge (and the fact that sites like TV.com and Hulu are regularly generating CPMs that are on par with, or better than, their network counterparts), the report finds that ad-supported online TV revenues will still only account for about 2.2 percent of all US TV ad revenue within the next four years. Amel notes that it "definitely won't be enough to offset the $2 billion decline" that Screen Digest is expecting to impact the on air TV ad market overall.
What about YouTube? Then there's YouTube, which has been working hard to become a more hospitable platform for premium content (and premium advertisers). The report is much less bullish about the growth potential for YouTube (and other portals) when it comes to monetizing premium, TV-based content—suggesting that their lack of strong relationships with rights holders (cable networks, broadcasters and even Hollywood studios) will keep a lid on any lucrative new deals. So Amel lists three options for growth if the portals do want to survive: focus on developing their own original series; give up content aggregation in favor of providing the tech and ad support for the TV networks' sites; and in a worst-case scenario, becoming network affiliates so that they can get cheaper access to the premium content.
US TV prepares for $2bn ad shortfall
28-Jun-09
Source: Financial Times
The US television industry faces a $2bn slump in advertising revenues during the next four years as advertisers turn away from broadcast and cable networks, according to a new report.
Digital video recorders that allow viewers to skip through commercials have knocked confidence in broadcast and cable advertising while younger, tech-savvy audiences are deserting their TV sets to spend more time online.
The Global Media Intelligence report by Screen Digest, the media research firm, says some of the decline will be clawed back by US TV networks by online video advertising, which it expects to triple during the next four years. But with online video advertising representing only 2.2 per cent of all TV advertising, this will not be enough to offset the slump, exacerbated by the recession. Screen Digest forecasts US broadcast and cable advertising revenues will fall from $69bn in 2008 to $67bn by 2013. "We're at an inflection point in the TV business model," Arash Amel, one of the report's authors, told the Financial Times. "Online video is not mature enough and won't mature quickly enough to fill the gap left by the decline of traditional TV advertising."
However, he said online video advertising was growing "exponentially" – with the big four US networks dominating the nascent market at the expense of sites such as YouTube. "Sites marketed and sites directly supported by the [important] content owners have gained a [substantial] lead over third-party sites like YouTube and Joost," he wrote in the report.
Online video has boomed in the three years since ABC became the first network to start streaming full episodes of its shows online. Since then, every other network has followed suit, with CBS, NBC and Fox each promoting its web service to its TV audience. In the UK, the BBC has quickly built an online audience with its iPlayer. ITV and Five have also put programming online.
In the US, News Corporation and NBC Universal own Hulu, a free streaming service that operates as an online hub for their TV content. The site is only available in the US, but there are plans to launch it worldwide.
Walt Disney, which owns ABC, recently joined Hulu as an equity partner. The success of Hulu and the sites operated by ABC, CBS, NBC and Fox has given the big US networks a dominant position in online video advertising. They account for more than half of the $448m ad-supported online TV market in the US in 2008. Screen Digest expects the market to be worth $1.45bn by 2013.
In making their content available for free online, Mr Amel said the networks had ensured they would avoid the fate of the music industry, which failed to respond to the threat posed by the internet.
Younger viewers are watching more TV online and using services such as Hulu, with many ditching their cable subscriptions in favour of internet viewing. The next challenge for the networks is to capitalise on this shift, according to Mr Amel, by running more ads per show. Programmes streamed on the web typically contain five or six commercials per hour – compared to more than 20 that run in each hour of broadcast TV. "There's no reason why online video won't make up the shortfall [in TV advertising] within five years," said Mr Amel. "But the question is how aggressive the networks in the US and the rest of the world are prepared to be."
Can we build it? Yes we can, but it will cost you
26-Jun-09
Source: The Times
Two of Britain's leading animators have warned that business will be leached away from this country because the industry cannot compete with generous tax breaks offered overseas.
Blue-zoo, the maker of Kerwhizz and the Bafta nominated Blue Cow, and Chapman Entertainment, which created Bob the Builder, yesterday told The Times that foreign animation companies are winning an increasing number of lucrative projects because the cost of operating in Britain is so much higher than abroad.
Tim Westcott at Screen Digest, the media analyst, said that it was difficult to value Britain's animation industry — which is estimated to be worth $70 billion (£43 billion) globally — because revenue streams are derived from diverse sources such as licensing revenues, the advertising it attracts, and sales from merchandise.
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