11/21/2011 Leave a Comment
The headline on data that Nielsen released last week: growth in online video time spent is outpacing the growth in the number of users. Growth in total minutes for the most recent period, August 2010-August 2011 (9%) is more than double the growth for users (4%) and higher than the growth for streams (7%). Thus the average stream is longer than it was a year ago. The chart is shown below.
This trend in rising length of stream is apparent from data in Nielsen’s January press release…I pointed it out here and noted that the finding makes sense; the audience for online video is becoming saturated while the upside for time spent is tremendous.
According to Nielsen’s June data, time spent for the average online video viewer is 4 hours/30 minutes per month. Compare that to average time spent per TV viewer at upwards of 30 hours per week and it’s clear that online video time spent has nowhere to go but up particularly as consumers increasingly watch long form content over-the-top on their TV screens.
That said, what seems odd about the chart, not explicitly called-out in the accompanying text, is that growth for all the online video metrics has slowed severely over the past 12 months. I’d expect growth in users to plateau (as per the chart) and I’d expect growth in number of streams per user to slow as people watch longer streams. But it’s surprising that total time spent with online video is growing at less than 10%, year over year.
It’s particularly surprising since the base for time spent per user is so low. To get a sense of how low it is, take a look at Nielsen’s June press release and do a little back-of-the-envelope on time spent per stream. It’s only 2 minutes/40 seconds, on an average of 101.5 streams per viewer per month. So, according to this information, the average viewer of online video watches somewhere around 3½ streams per day at less than 3 minutes apiece. You would think, given Netflix, Hulu, Amazon and other long-form streaming options, that total time spent would be growing at more than 10% off this base.
Another interesting back-of-the envelope: calculate the average streams per user and time per stream for the three competitors for which the press release provides monthly user, streams and time spent data. For YouTube (with 108M users): 81.7 streams at 1:55 (mins/secs) apiece. For Hulu (13.5M users): 46.7 streams at 4:45 apiece. And for Netflix (8.0M users) 24.1 streams at 21:18 apiece. The total is tilted toward the YouTube number with its enormous user base, but the Hulu number is surprisingly short and even the Netflix number, at less than half an hour per stream, makes me wonder about what might not be included in the data.
The shape of the Nielsen growth curve is contrary to the one below, for example, from Cisco data cited in ReelSEO earlier this year. This predicts that bandwidth demands for streaming video will not decelerate but in fact accelerate over the coming years.
I suspect the Nielsen time spent growth curve is affected by a particular aspect of their methodology; they monitor online video activity on their respondents’ computers. The way I read it:
Online video that people access through games consoles, Internet-connected TV’s, Roku boxes, Apple TV and any other device that circumvents the computer and ports online video directly to the TV screen are not included. This is probably not a substantial piece of the puzzle on a user basis or on a streams basis. But the absence of this piece may understate the growth of time spent per stream with the increasing consumption of longer streams concentrated in non-PC devices.
This isn’t a knock on Nielsen’s methodology – it measures no more and no less than it says it does. But if we’re really going to understand the total picture of online video behavior we’ll need to get a handle on the whole ball of wax no matter what devices the video streams flow through.