The Future of TV

Broadcast

More and more video being consumed on smartphones and tablets, more ad dollars moving from print to mobile video and a gradual evolution away from channels to Apps. That’s the vision venture capitalist and analyst Mary Meeker presented in the 2014 edition of her annual Internet Tends report at the Code Conference Wednesday.

Meeker ran through 164 slides during her rapid-fire presentation; one section, on the future of television (slides 91-126), told a more concise, compelling story about where the industry is heading… and it’s moving at breakneck speed.

(Ooyala worked with the authors of the report, who requested data on mobile video consumption. The data -- share of plays on mobile vs. share of time watched on mobile from Ooyala’s 4Q 2013 Video Index – can be seen on Slide 125. You can download Ooyala’s 4Q 2013 Global Video Index here.)

Here’s a digested look at the 2014 Internet Trends report.

A growing appetite on multiple screens

Screens are proliferating rapidly. Just a decade since their introduction, smartphones and tablets are shipping at 4x-5x the volume of PCs and TVs.

In every region, in many countries – including the U.S., Canada, Mexico, Brazil, Argentina, Australia, South Korea, China, Japan, Kenya, South Africa, Germany and Italy -- smartphones are the most used/viewed medium.

Eighty-four percent of mobile owners use their device while watching television, double the number that used a second screen just two year ago. Tablets outpace smartphones for looking up actors, plots etc., but smartphones remain the go-to device for a quick email or text. And, because those devices are used at the same time, viewers actually consume more content than they do watching just a television.

The more devices that a viewer uses, the more TV they watch, indicating that, rather than cannibalizing TV viewing time, tablets and smartphones and even computers compel users to spend more time in front of the biggest screen in the house, the television. And, although smartphones dominate by pure numbers, tablets are seen as a device poised for massive adoption.

Traditional remotes lose relevance, new devices rule

It should come as no surprise that traditional TV remotes are become passé, dinosaurs that may ship with a TV set but are increasingly being replaced as users look to smartphones, tablets and other devices that can make use of IP-enabled search engines that make discovery simpler and more rewarding.

Meeker calls out Netflix for its ability to recommend content as easily to a father of two as to a female Millennial.

Streaming set-top boxes, what Meeker calls smart TV adapters, are quickly gaining traction as the original streaming STBs, game consoles, age and lose ground.

The report says Apps are gaining an increasing share of video time and are on track to replace channels as the traditional form of content organization.

Mobile drives video growth; Millennials drive mobile

And, again, the driving forces are mobile devices… and youth.

Ooyala found that mobile share of online video time spent has increased to 22% of all online video, double what it was a year ago.

Millennials are consuming more video on mobile devices and on connected TVs. Perhaps even more critical, for the online video industry, are Millennials’ viewing habits. They watch less live TV than other groups (41% to 59%), and nearly 3X as much online video than non-Millennials (34% to 12%).

Yet, even as younger viewers have flocked to mobile devices, ad dollars have been somewhat slow to follow. Mobile accounted for just 4% of ad sales. Overall, Internet ad sales grew 16% last year to $116 billion.

Also getting attention was Twitter’s impact on TV advertising. Meeker pointed out that TV with Twitter produced better ad recall (40% vs. 53%), brand lift (7% vs. 18%) and purchase intent (16% vs. 30%).

Some other, selected data of note:

Mobile made up 25% of Internet traffic as of May 2014, up from 15% a year ago and 10% two years ago.
Smartphone penetration in the 15 biggest developed markets is 65%.
Smartphone penetration in the 15 biggest emerging markets was Global smartphone penetration reached 22%, compared to 11% penetration for laptops and 10% penetration for desktops. Tablets stand at 6%.
You can access Meeker’s full report here.

Source: ooyala - May 28, 2014- By Jim O'Neill