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More OTT Time Means More Ad Time

Weekly time spent with OTT TV will near 19 hours in 2020

Over-the-top (OTT) devices are expanding their reach among TV Everywhere users, and according to a recent study, OTT TV programming will grab an increasing amount of internet users’ television time in the coming years as viewers turn to such devices for more long-form, live content.

Average Weekly Time Spent Watching Over-the-Top (OTT) TV Among US Internet Users, 2014-2020 (hours)

In Q4 2014 research, The Diffusion Group (TDG) estimated that the average weekly time US internet users spent watching OTT TV would rise 425% between 2014 and 2020, from 3.6 hours to 18.9 hours. In 2015 alone, time spent with OTT programming was expected to nearly double to almost 7 hours per week.

As time spent with OTT grows, ads served during programs will get longer too. TDG forecast that the average ad block length per 30-minute US OTT TV episode would increase nearly 60% between 2014 and 2020, from 3.2 minutes to 5.1 minutes. In total, OTT ad revenues were projected to hit $31.5 billion in 2018, up 275% from $8.4 billion this year.

Average Ad Block Length per US Over-the-Top (OTT) TV Episode*, 2014-2020 (minutes)

Recent data from FreeWheel supports the idea that consumers are generally using OTT streaming devices for long-form—and real-time—content. In Q4 2014, 91% of video ad views on such devices in the US took place during live content longer than 20 minutes. This works out to monetization growth of 236% quarter over quarter and 257% over 2014 as a whole, emphasizing OTT’s rising role in TV time and growing ad reach as a result.

The percentage of OTT subscription service users in North America rose 8.0% last year, according to Q4 2014 data from Digitalsmiths. Among these users, 36.0% used such services between 1 and 5 hours weekly, while an additional 20.2% spent between 5 and 10 hours watching content this way, and 18.7% devoted between 10 and 20 hours.

Time spent with video on digital devices daily will reach 1 hour, 16 minutes on average this year, eMarketer estimates. As TV viewers increase consumption of long-form live content via OTT, advertisers will follow with longer spots and more dollars.

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