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for streaming ads
Study: From zip to all over the place by year 2005
By Jeremy Schlosberg
A still-widely-underutilized online ad form is poised to become the web’s predominant type of advertising.
This year more than 90 percent of all streaming programming online will have no advertising in it.
And yet streamed advertising that supports audio and video programming on the web will overtake other types of online buys as early as 2005, according to a report released this month by DFC Intelligence, an interactive entertainment market researcher.
This report comes on the tail of a widely publicized PricewaterhouseCoopers report on entertainment and media that also speaks of how streaming media is likely to revitalize internet advertising.
The increasing penetration of high-speed access in internet homes nationwide is the primary reason behind the high hopes for streaming advertising.
The number of broadband video streams is expected to increase by 89 percent in 2001 over the number in 2000. At the same time, the number of narrowband video streams will increase by only 36 percent.
In 2001, with less than 10 percent of streaming programming featuring advertising, streaming advertising on the web is expected to generate $148 million in revenue.
Because of streaming growth prompted by increased broadband penetration, 2001 is projected by DFC as the last year when the number of narrowband video streams will outnumber broadband streams (see chart). By 2002, broadband streams will comprise 55 percent of all online streaming.
Hand-in-hand with this sizable increase in streaming programming will come a serious increase in streaming avails, according to the report.
Right now DFC says there are approximately 1.2 avails per video stream. Most of these are what are called "pre-roll" ads—that is, ads the user must watch before the desired clip is shown.
By 2004 the average number of avails per stream will increase to 3.5; at the same time, ad-serving systems based on Java-streaming will allow ad insertions in all streaming programming. In 2000, only 5 percent of streaming programming allowed insertions.
All this streaming by 2004 is expected to generate $768 million in revenue.
The report asserts that advertisers should pay attention to this opportunity now, since web audiences are already, to a certain extent, incorporating the use of streaming programming into their daily media routines.
Highly publicized events, from Madonna’s webcast in London late last year to the recent NBA Finals to the upcoming Olympics, continue to increase user awareness of the web’s streaming capacity.
A recent study by Scarborough Research reported that 26 percent of online users accessed streaming video sometime during the previous 30 days.
The two categories in which broadband streaming is expected to grow most notably in 2001 are movies and news and information (see chart).
If streaming advertising grows as DFC Intelligence anticipates, we may at long last be seeing the rise of so-called "rich media" advertising, as so many have been anticipating for so long.
But it is not rich media as originally conceived.
Initially the industry envisioned rich media more or less as banner ads that moved and talked, even though it was never clear how much moving and talking one could effectively fit into a banner space.
It was also unclear how much moving and talking web users wanted or needed ads to do in the context of their web experiences, which have remained largely text-based.
With the slow but steady emergence of streaming programming on the internet, the true face of rich media may finally be emerging. And it may be as simple and enticing as TV-style ads placed inside TV-style clips streaming onto user desktops.
|
Increase for Streaming Ads |
|||||
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2000 |
2001 |
2002 |
2003 |
2004 |
|
|
Number ads/stream |
1 |
1.2 |
2 |
3 |
3.5 |
|
Implied market value |
$78,145 |
$148,245 |
$285,077 |
$552,904 |
$767,898 |
|
% deployment ad insertion |
5 |
50 |
80 |
100 |
100 |
| Source:
DFC Intelligence
|
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|
Narrowband
Video Streams |
|||||||||
|
|
1999 |
2000 |
2001 |
||||||
|
Category |
Strms/ Year (000) |
% Chg |
View Shr |
Strms/ Year (000) |
% Chg |
View Shr |
Strms/ Year (000) |
% Chg |
View Shr |
|
Film/ |
29,647 |
n/a |
10.4 |
52,824 |
78.2 |
8.6 |
92,443 |
75.0 |
11.1 |
|
Internet |
14,083 |
n/a |
4.9 |
60,368 |
328.7 |
9.9 |
96,589 |
60.0 |
11.6 |
|
News |
69,447 |
n/a |
24.4 |
135,013 |
94.4 |
22.1 |
175,517 |
30.0 |
21.1 |
|
General Enter- |
19,080 |
n/a |
6.7 |
82,604 |
332.9 |
13.5 |
111,515 |
35.0 |
13.4 |
|
Sports |
75,804 |
n/a |
26.6 |
119,230 |
57.3 |
19.5 |
155,000 |
30.0 |
18.6 |
|
Music |
76,495 |
n/a |
26.9 |
161,976 |
111.7 |
26.5 |
202,470 |
25.0 |
24.3 |
|
Total: |
284,557 |
n/a |
|
612,016 |
115.1 |
|
833,534 |
36.2 |
|
|
Source:
DFC Intelligence
|
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Broadband
Video Streams |
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|
2000 |
2001 |
||||
|
Category |
Strms/ |
% |
Viewing |
Strms/ |
% |
Viewing |
|
Film/movies |
28,444 |
n/a |
6.6 |
113,776 |
300.0 |
14.0 |
|
Internet TV |
112,113 |
n/a |
26.1 |
190,591 |
70.0 |
23.4 |
|
News/ |
72,699 |
n/a |
16.9 |
145,399 |
100.0 |
17.9 |
|
General |
44,479 |
n/a |
10.3 |
71,166 |
60.0 |
8.7 |
|
Sports |
64,201 |
n/a |
14.9 |
109,142 |
70.0 |
13.4 |
|
Music |
107,978 |
n/a |
25.1 |
183,563 |
70.0 |
22.6 |
|
Total: |
429,914 |
n/a |
|
813,637 |
89.3 |
|
| Source:
DFC Intelligence
|
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Total Streams Online |
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|
2000 |
2001 |
2002 |
2003 |
2004 |
|
Total narrow/ broadband streams (000s) |
1,041,930 |
1,647,171 |
2,192,898 |
2,835,407 |
3,375,377 |
|
Narrowband streams |
612,016 |
833,534 |
984,672 |
1,116,816 |
1,210,081 |
|
Broadband streams |
429,914 |
813,637 |
1,208,225 |
1,718,591 |
2,165,297 |
|
% narrowband |
58.7 |
50.6 |
44.9 |
39.4 |
35.9 |
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% broadband |
41.3 |
49.4 |
55.1 |
60.6 |
64.1 |
| Source:
DFC Intelligence
|
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June 18, 2001 © 2001 Media Life
-Jeremy Schlosberg is a staff writer for Media Life.
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