Conviva Viewer Experience Report Says $20 Billion Opportunity Could be Missed by 2017

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We all are more than well aware of two things when it comes to streamed video. First, whether from commercial sources or downloads of personal content on YouTube, there is an insatiable and growing appetite to produce videos and have the world look at them. Second, the viewer experience tends to be “problematic.” The latter raises an interesting business question. “How much opportunity is being left on the table as a result of poor streamed video experiences?” 

As the headline notes, Conviva, a leader in preemptive video stream optimization, wanted to know and did some exhaustive investigation. The results of that research are in a fascinating study about streamed video in 2012 called, Viewer Experience Report. The high level answer to the question above is that the state of online video quality and how it impacts viewer behavior to drive profitability is costing content providers to miss out on a $20B opportunity over the next several years.

Streamed video experience numbers are telling

Based on its review of 22.6 billion worldwide video streams in 2012, Conviva found that poor quality has significant consequences. Report highlights include:

Poor quality is costly: Conviva found global content brands could have captured an additional $2.16 billion in revenue for 2012 had they improved the viewer experience. And without a shift to higher quality, they will miss out on an additional $20 billion through 2017 due to poor quality video streams that directly impact viewer engagement.

Poor quality is pervasive: In 2012, roughly 60 percent of all streams experienced quality degradations, including:

  • 20.6 percent of streams that were impacted by buffering
  • 19.5 percent of streams that were impacted by slow video startup time
  • 40 percent of streams that were impacted by low-resolution picture due to low bitrates

Viewers are less tolerant: In 2011, a one percent increase in the amount of time spent buffering during VOD content led to three minutes less of viewing time. Today, that same one percent increase leads to an eight-minute loss in viewing time—an increase of 166 percent.

In short, when it comes to streamed video this is love you or I will leave you. Time is the a critical resource we cannot create more of, and as users we abhor things that waste time and online have the option of a quick click.

This is precisely the point made by Darren Feher, CEO Conviva who stated that, “Viewers are becoming increasing less tolerant of a poor viewing experience when streaming online content…Shockingly, content providers have little to no visibility into how frequently this intolerance occurs—a crazy premise when you consider how deeply these viewers affect their daily economics. In the war for audience engagement, the companies that focus on providing exceptional content within a quality experience—one without buffering, with a quick video start time and high visual resolution—will amplify viewer engagement and ultimately be the most profitable.”

Again the proof that quality matters can be seen in the finding that viewers watch a rather astounding 250 percent more when they have an optimal experience. Such an experience included:

  • Fast startup
  • Little to no buffering
  • A high-sustained bitrate for high resolution and visual clarity.

In fact, Conviva believes based on these findings that investing in quality is, “the single most important investment media companies can make to keep viewers watching.”

A Three step approach to quality

In line with its findings, Conviva is recommending best practices from sites that have the highest viewer engagement and whose successes are documented in the report in some detail. These include:

  • Real-time viewer measurement
  • Preemptive stream adjustment
  • Network quality mapping

A cautionary note was sounded by Colin Dixon, founder and chief analyst of nScreenMedia who stated that: “Online video providers know that consumers have a low tolerance for problems with playback. Their problem is in understanding exactly what the boundaries are. The data from Conviva lays bare how little margin for error providers have before their viewers move on.”

The lessons learned from the findings are simple but critical. In fact, they point out what may be obvious but can get over-looked, in that companies that provide content should pay close attention to how it is consumed and they can be very good judges of their services themselves. This should not be a case of the cobbler’s children having no shoes. As the report points out some attention and investment are what is needed, a multi-billion dollar opportunity would be a terrible thing to waste, and it is more than likely that there will be lots of takers if incumbents to not react and do so quickly.




Edited by Brooke Neuman
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