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Online video consumption to rise by 19.8% in 2016: ZenithOptimedia

MUMBAI: The average amount of time people will spend consuming online video each day will increase by 23.3 per cent in 2015 and by a further 19.8 per cent in 2016, according to Online Video Forecasts, a new report by 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 the agency expects 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 forecasts 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 the Media Consumption Forecasts 2015 report (published in June), the amount of time people spend watching linear TV has been in slow decline for several years. The agency now predicts that next year the number of viewers will 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 like 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 like China (27.2 per cent), France (50 per cent), Germany (27.5 per cent) and the US (12.3 per cent).

Ad expenditure on online video will soon account for an eighth of total internet ad spend

Online video’s share of global digital ad spend is rising rapidly: it was 8.8 per cent in 2012 and 10.2 per cent in 2014; by 2017 it 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. The agency forecasts it to grow by 28.9 per cent to $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 $23.7 billion.

The US online video market is by far the largest: $8.5 billion in 2015, 52.9% of the global total, although ZenithOptimedia expects its share to drop to just below half of the global total – 49.9% – 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% each in 2015), followed by Taiwan (15.8%) and Latvia (13.0%).

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.