Online viewing to grow 5 times by 2017: study

A new white paper from Ovum and Ooyala says broadcasters better hustle if they want to catch up with the rapidly increasing trend of watching TV online.
February 4, 2014

By 2017, more than 20% of audience viewing hours will be delivered via the internet, changing the basic competitive fundamentals of broadcast, pay TV and electronic sell-through, according to a just-released white paper by independent tech analyst Ovum. The Are You Video Neanderthal or Video Sapiens? report was compiled in collaboration with online video services provider Ooyala.

Roughly 4% of current U.S. viewing is delivered via the web, as calculated by Nielsen, so this would be a growth of five times the current trend, the study says. The increase will be spurred by continuing increases in tablet and smartphone ownership and the growing use of the devices as a television alternative, according to the findings.

The shift to watching content online is especially strong with younger viewers. Ovum found that in the U.S. in 2013, monthly daily viewing of conventional linear television by the 14-to-18 segment dropped by nearly eight minutes. This was offset by a rise in OTT viewing of seven minutes 30 seconds. “Of course, a substantial part of this is Netflix and YouTube viewing, not just broadcaster services such as ABC Go or,” the report states.

While the paper bodes well for businesses that are digital natives, it strikes a note of caution for traditional broadcasters. According to Ovum, the “brutal reality” for traditional-TV types  is that the three-to-four-year time frame between now and the end of 2017 gives them little time to plan, build and execute new systems and operations architecture. 

The Ovum study identifies four stages that content services must go through on their journey to becoming successful competitors in the space.

The first stage is “experimental web video” where learning takes priority over profit, with a small team working in isolation to create content for a standalone platform.

The second is “basic service productization” where more commercially viable services such as a TV-everywhere app drives lower churn and higher average revenue per user, but web operations and ad sales remain isolated from each other – preventing efficient data sharing and reducing return on acquired multi-screen rights, for instance.

The third stage is “hardening the platform & service” where multi-screen revenues from advertising, subscription and other monetized services grow as sales operations and multi-screen management systems become more integrated and synergistic.

The fourth stage is “full integration,” which Ovum characterizes as “nirvana” and notes that “no one is there yet and most are at least five years away.”

Ovum’s analysis echoes a study released by Irdeto at CES last month, which found that 53% of 1,000 adults surveyed in the U.S. believed that smartphones and tablets would replace the television as the most common way to consume entertainment by 2022.


About The Author
Todd is StreamDaily's U.S. West Coast Correspondent. He has written for a wide range of publications, including The Hollywood Reporter, Variety, the Los Angeles Times, the New York Post, NylonGuys and, yes, even the Weekly World News. Earlier in his career, he served as senior editor for the pioneering alternative movie magazine Film Threat. You can reach him at toddrlongwell[at] or on twitter @toddlongwell1


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