The number of US online video viewers has risen steadily for the past few years and is expected to continue climbing in moderate increments through 2014.
eMarketer estimates that growth will slow from between 8% and 9% a year from 2010 through 2012 to about 5.2% in 2014, when 77% of US Internet users will be watching online video content at least monthly.
Growth in online video viewership was increasing more quickly between 2008 and 2009, by 11.3%. At the same time, streaming and downloading of full-length movies increased much more dramatically. According to Ipsos OTX, the percentage of Web users who watched this kind of long-form online video more than doubled between September 2008 and Oct 2009.
Such rapid increases in downloading and streaming mean full-length movie—and, by likely extension, TV—content is on a faster growth track than online video viewing as a whole.
One factor behind the turn toward long-form content is the success of Hulu, which The Nielsen Company ranked second to YouTube in overall video streams viewed in April 2010. In addition, the increase in Internet-enabled TV sets and other viewing devices supports the trend. In-Stat expects US shipments of Web-enabled devices that support TV applications to increase from 14.6 million this year to 83.4 million by 2014.
The demographics of online video viewing also help to explain why Internet users have gone beyond snack-size clips to adopt full-length TV and movie viewing on the Web. eMarketer estimates the highest penetration of online video viewing is among 18- to 24-year-olds, with 25- to 34-year-olds and teens not far behind. By the middle of this decade, those age groups will be at saturation points of above 90% penetration.
Not only do these demographics watch online video in massive numbers, but they are also the most receptive to TV content online. Retrevo found that 29% of under-25s get all or most of their TV online, compared with 8% of the video viewing population as a whole. As these viewers grow older, they’ll be used to consuming TV content online, and they’ll be helped by a new generation of devices that makes this transition much easier than it’s been to date.
“If the first iteration of online video was about silly pet tricks on YouTube, the next wave will be about professionally produced full-length content such as TV shows, movies and live sports,” said Paul Verna, eMarketer senior analyst. “This shift will be propelled by a combination of technology integration, demographics and a growing comfort level with the idea of watching video hosted on Websites.”
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Check out today’s other article, “Case Study: Targeting Social Content–Sharers.”