Reports and opinions from all corners of the industry have occupied this week’s summer lull of video technology announcements. UK regulator Ofcom was at it with its Media Nations report, showing a huge streaming spike misinterpreted by the BBC as a win for linear TV, while Nagra came out with results from another Pay TV Innovation Forum survey – revealing how operators continue to massively downplay the disruptive role of OTT video.
But it was the Q2 State of the Streaming Industry report from Conviva which really tickled our fancy. While celebrating the rise of ad dollars in OTT video and highlighting the major unfulfilled opportunities in ad-supported content, the QoE analytics vendor also declared a streaming ad crisis.
Conviva has sounded the alarm based on data showing that when viewers exited or refreshed a piece of content before making it through 5% of a title, marking the magic point of no return according to Conviva, pre-roll ads recorded an average rebuffering ratio of 1.6%. But when a viewer passed the engagement threshold of 5%, pre-roll ad buffering averaged just 0.4%. The report doesn’t make it clear however if this data relates to ad-supported on-demand content or live streaming, or both.
“Even a seemingly small decrease in average pre-roll ad buffering can result in large increases in content engagement and monetizable viewing time. Overall, the average pre-roll ad buffering ratio was 1.09% in Q2 2019. While many ads see little buffering, the averages take into account many cases of individuals who see high ad buffering, which in particular impinges viewer engagement,” writes the report.
We’d love to see a comparison between on-demand content with and without ads of the proportion of viewers who passed the 5% mark when there was no buffering and slight buffering on each.
Despite Conviva reserving concerns about a streaming ad crisis, the overall streaming situation has vastly improved. Data showed 42% improved buffering ratio, 35% fewer video start failures, 10% better picture quality, and 1% faster video start time during the second quarter. Service providers have made significant progress in employing increasingly sophisticated data to deliver highly personalized experiences, as opposed to one-to-many broadcast.
Conviva applauded these advances for proving effective in improving video quality, faced with millions of potential combinations of factors that can impact video QoE – devices, platforms, CDNs, ISPs, servers, locations, and more.
Such advancements meant video start failures dropped to just 1.38% and average rebuffering ratio declined to 0.46% in Q2 2019 from 0.79% in Q2 2019 – resulting in a 12% increase in engagement. Quality and engagement are naturally connected but, even so, this 12% engagement spike is surprisingly high – again underscoring the importance of picture quality as a direct correlation to churn and effective monetization.
The 1% improvement in video start time saw the average climb to 4.06 seconds, while the 10% increase in picture quality saw the average increase to 4.59 Mbps in the quarter.
Aside from the critical QoE data, Conviva also included a few fun figures, breaking down streaming data from the top 15 markets in the US with intriguing results. Taking top spot for video consumption per head wasn’t San Francisco or New York, but Dallas, recording streaming video consumption 44% higher than would be expected for its population size.
Additional findings showed that VoD content accounted for 66% of all viewing hours during Q2 2019, rising from 59% in the same period last year.
From OTT video to pay TV, let’s give Nagra and MTM’s survey results a little time in the limelight.
“Many executives see OTT offerings as simply another category of content offering to be aggregated and offered to subscribers on pay TV platforms,” reads one of the most starry-eyed and hypocritical statements we have ever had the displeasure of receiving here at Faultline Online Reporter – and we have received our fair share of pay TV industry cover stories.
Aggregation, quite frankly, is a term legacy pay TV operators are circulating frantically as a medium for increasing ARPU for their dwindling cable and satellite subscriber bases – in doing so giving the illusion of a healthy business model.
“Industry participants widely expect pay TV packages to be radically restructured – with fewer linear channels and a more diverse range of prices and packages. This includes bring-your-own-device offerings targeted at smart TV owners and sell-through models similar to Amazon’s Prime Video Channels,” states another key finding from the Pay TV Innovation Forum.
At least this is a statement we can get on board with, although somehow the same respondents who admit that radical restructures are required, cannot confess that OTT video – or “simply another content category for pay TV” – is the root cause of this restructuring.