YouTube is great for kids but TV rules the roost
In the first of Steve Dempsey's new columns on media matters, he looks at how online video consumption is changing everything
Not a week goes by without a report or some research that states online video is the future of media consumption, the best thing since sliced bread or bigger than Jesus.
This week's instalment came last Thursday at the IAB's Video Connect event in Dublin, where Nielsen gave us an in-depth look at how video on demand is changing the Irish market.
No one will be surprised to hear that more and more people are streaming and downloading video content. Two thirds of Irish adults have viewed online video in the last six months.
Even less surprising is the fact that younger audiences are more likely to have swapped the goggle box for YouTube. Some 87pc of 16- to 34-year-olds have watched video on demand in the last six months.
So far, so obvious. But there were a few surprises according to Claire Harris, Nielsen's director of television audience management and advertising information services.
"Probably the thing that surprised me most was the extent of change in the last six months," Harris says.
"Since December, daily consumption of video on demand for one or more hours has increased 5 percentage points for adults aged over 16 to 67pc and by a massive 12 points to 91pc for the 16 to 24s."
Laptops remain the most popular device for watching online video, with tablets and smartphones sharing second spot. Desktop video viewing, though, is declining.
"This largely reflects the portability of smaller devices," Harris says. "One-quarter of viewers claim to watch online video while commuting. Given the younger skew of the video on demand viewer, a secondary factor may be they don't have control of the TV at home in the evening - or they want to get away from their family."
Nielsen's research is interesting when it comes to advertising. They found that advertising on online video allows brands to connect with audiences that other media, particularly TV, just can't reach.
More than 71pc of 16- to 34-year-old video on demand viewers are more likely to be light to medium TV viewers. Some 56pc of 16- to 24-year-olds claim to watch more video on demand than TV. And a staggering 28pc of online video viewers searched for a brand as a result of seeing a video ad.
Nielsen also found that many viewers accept advertising such as pre-roll ads as a necessary evil - or rather a necessary inconvenience.
"There is a high level of awareness that advertising content enables viewers to access free content, and the two are inextricably linked," Harris says. "Questions were asked about advertising acceptance based on duration, and the percentage of video on demand viewers saying they were very happy, or somewhat happy, to watch advertising in order to consume free content was only 3pc lower for short form than long form. The challenge for advertisers and agencies is to ensure content is engaging and resonates with the audience in this medium."
So the question is: with all this online video-watching going on, does TV itself still resonate with audiences and advertisers? This was pondered particularly intensely last week at the annual TV bazaar known as the "upfronts" in New York, where US media giants flog most of their commercial inventory ahead of the new season. This year's upfronts took place with a distinct awareness of the online upstarts nipping at TV's heels. Digital rivals are on the rise. TV viewing has dropped 9pc year on year in the US. TV ad spend will fall 3pc, while US digital video ad spending will grow 30pc this year - hitting $7.8bn. All is changed, changed utterly: a terrible YouTube is born.
But Harris maintains Ireland shouldn't pay too much heed to American ad spend trends. "We rely on the US to lead the charge and do the R&D," she says. "The challenge for us as a small market is to be fast followers. We need to move to a concept of a total audience; where it's less about device, more about viewers wherever they may be.
"It's about following the content, regardless of the device. The TV industry is no longer limited to only live broadcasting of content," Harris says. "All the main networks have players, providing both live streaming and on-demand content.
"The growth figures quoted in the digital space are impressive, but it's a relatively low base compared to TV spend - and there'll continue to be a need for the mass-market coverage that TV can deliver."
So while digital video is on the up, it seems that TV still rules the roost. Another recent Nielsen report, the Total Audience Report for the fourth quarter of 2014 (yes, it's specific to the American market) found that 96pc of video content was watched on a TV. Only 4pc was watched on some web device.
So while there are plenty of new devices like smartphones, tablets and laptops on which to consume video content, nothing beats the box. Not yet.
Steve Dempsey can be found on Twitter @steevill
Sunday Indo Business