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Online video ads account for just 1% of TV revenues

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13 January 2015

The latest predictions from analysts at Deloitte about the global TV market will make comforting reading for traditional broadcasters.

In its predictions for the media sector in 2015, Deloitte’s TMT practice plays down the impact of competition from short form video on YouTube, as well as from online VOD services like Netflix and Amazon Prime.

The report says ad revenues from short online videos will be worth over £3bn globally in 2015 - a spectacular achievement for a format that barely existed a decade ago.

However, Deloitte points out that short form video from vloggers like Zoella (pictured above) will represent only a tiny fraction of the revenues and viewing generated by traditional, long form broadcasters.

It says that overall revenues from online video will account for about 1% of the over £260bn that traditional broadcasters generate from advertising and subscription revenues. The professional services firm predicts that broadcasters will take £134bn from long-form advertising on television. Pay-TV subscriptions should approach £128bn.

In terms of viewing, the report says that online short-form video should generate ten billion hours of viewing a month.

However, Deloitte estimates that in an average month over 360 billion hours of long-form video will be watched, principally on television sets, and mostly live.

Meanwhile, Deloitte also predicts that online subscription video on demand (SVOD) services like Netflix and Amazon Prime Instant Video will generate about £5bn globally this year - around 3% of the £168bn pay-TV market.

“SVOD should not be considered solely as a competitor to pay-TV but more as a complementary service and replacement for DVD box sets.  In addition, SVOD players will struggle to match TV broadcasters’ investment in brand new high-end content,” said the report.

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