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Viewer habits driving broadcast industry trends

Entertainment

Posted on February 4, 2016

5 min read

Ooyala Broadcast Industry Marketing Manager, Paula Minardi shares her insights on the biggest trends in the broadcast industry driven by shifting viewing habits.

Ooyala recently published its State of the Broadcast Industry 2016 report which highlights some top global industry trends on the landscape. Here are three key ones that Australian companies in the OTT space should be thinking about in the new year:

Mobile to Lead

Consumers around the globe (particularly Millennials) are undoubtedly watching more video content on mobile screens than ever. The shift is due in part to viewer preferences for individually-tailored and on-the-go content experiences, but also to the increase in quality content available and created just for those screens, and the widespread penetration of mobile devices.

According to eMarketer, Australia has the highest tablet penetration rates among internet users (now 64%) and the population at large (nearly 49%) in the APAC region. Separately, the research firm also reported that the smartphone penetration among the country’s mobile users is also now among the highest in the region, at 81%. Consequently, expect to see more mobile-first content and service offerings emerge.

In fact, the appetite for longer-form video content on mobile devices is already growing. 30% of North American smartphone owners now watch full-length TV shows on their smartphones, and 20% watch full-length movies, while Australia and New Zealand are on par with those figures, at 23% for both categories. Companies should look to these trends as well as their own data to align their mobile content with consumer preferences and peak viewing times.

Viewers do seem to prefer mobile apps, with their stronger user experience, over mobile browsers. Remarkably, Australian smartphone users spend about 33 hours per month on mobile apps vs. just less than 4 hours on mobile browsers. They also tend to be a socially-savvy lot; eMarketer noted that Australia has the highest mobile phone penetration for Facebook users in the APAC region–audiences who are sure to engage in the platform’s growing video focus. Indeed, around 5 million Australians already watch a Facebook video daily. Add more advanced mobile devices to the mix and you have a recipe for continued mobile video growth in the market.

OTT to Thrive

Everybody who’s anybody in the global broadcast business has OTT at the top of their to-do lists this year…if they haven’t already checked it off.

While traditional TV still dominates in the Australian home, the country remains an important market for OTT growth, given that it ranks the highest globally for wireless broadband penetration while pay TV penetration is still only around 30%. SVOD alone is expected to be in over 3 million Australian homes by 2020, as there are now several key local and global SVOD players in the space, including Netflix, Presto and Stan. Broadcaster catch-up TV services have also added competitive pressures, so look for the market to heat up as more consumers move away from more traditional TV environments, including FTA.

Live linear TV delivered via OTT is becoming a core need for providers who want to remain competitive and grow in the year ahead (ask Seven and Nine). This is particularly true as sports remains a key live content category in Australia and as mobile grows, so look for more multiplatform sports rights battles ahead.

Along with mobile devices, internet-capable TV devices will continue to be an important gateway for OTT content in the country, as penetration levels sit at 30%. Piracy continues to loom over all of this industry activity, as Australia tops the charts globally for pirating TV, due in part to content availability and pay TV cost issues. Expect to see companies in the OTT space explore more local content options, creative content packaging, and flexible monetization methods in the fight for audiences and dollars.

Ad Tech to Rise

Broadcasters worldwide are increasingly turning to programmatic advertising to make better use of their full digital and linear video portfolios, and provide marketers with more precise targeting by linking inventory, data and audiences. Expect programmatic to rapidly gain ground in 2016, led by anchor events like the Summer Olympics, more premium inventory, and further innovations in the space. Australia, with its advanced digital and programmatic ad markets, will continue to attract investment and remain a global leader in this area.

The country will see video ad transactions made through programmatic methods rise from 27% in 2015 to 55% in 2019. Australia already has an affinity for private programmatic marketplaces (PMPs): 38% of video inventory is placed through PMPs, third only to the U.K. (45%) and U.S. (39%). In addition, two-thirds of Australian marketers use mobile programmatic, and given the aforementioned mobile trends, expect that figure to climb higher as well.

A growing challenge regardless of the trading method is that more audiences (especially Millennials) are skipping ads, blocking them or simply opting for ad-free OTT environments. Australian viewers are particularly bothered by catch-up TV ad loads that they don’t have to endure with an SVOD experience. And, consumers used to skipping ads on their DVRs are now using ad blockers to skip them online, which has become a global problem to the tune of $41 billion in 2016. Ad blocking rates of 18% have been seen in Australia, and this share is sure to grow as more audiences gain awareness of ad blocking software.

To combat these issues, look for more advanced ad blocking technology for unlocking ad inventory to emerge, along with deeper personalization of ads designed for screen types, hybrid monetization models, and more targeted and interactive ad creative. In a recent study, 35% of respondents in Australia and New Zealand indicated that tailored ads related to the video watched were a must-have–higher than any other global region, so expect data insights to continue improving the ad experience for all.

The year ahead is sure to be a dynamic one to watch for these and other developments on the Australian broadcast landscape.

Visit Ooyala to read the full whitepaper and stay update with industry trends.