Parks Associates Blog

Tuesday, May 18, 2010

U.S. online video advertising revenue will exceed $1.3 billion in 2010

Steady growth in online video viewership, combined with the ability to target specific viewers based on preferences and viewing history, will push U.S. revenues for online video advertising over $1.3 billion in 2010.

Online Video Advertising: Strategies & Results, finds large percentages of consumers, especially younger consumers, have yet to form a strong opinion regarding targeted advertising. These advertisements include commercials shown before an online video or overlays displayed during the show, with the content based on the user’s Internet, TV, and mobile usage and viewing habits.

Among U.S. broadband households, almost 50% of heads-of-household aged 18-34 are indifferent to targeted advertising, while 42% aged 25-54 and 25% aged 55 or older are similarly neutral. The younger age groups are more receptive to the concept of targeted advertising, and advertisers place a premium on the ability to reach these demographics.

While online video does not yet have the same audience reach as traditional broadcast and cable TV, the medium continues to grow its user base, and increased content offerings via TV Everywhere initiatives will bring in more viewers and boost advertising revenues. Currently over 50% of heads-of-household 25-54 watch online video at least weekly, and the percentage jumps to 75% for ages 18-34.

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Monday, April 19, 2010

The Role of the Set-Top Box

The set-top box (STB) is the primary point of entry into the digital home for television services, including cable TV, DTH, and IPTV. This device has evolved beyond its historical role as a simple black box sitting on top of a large TV set into a smaller form-factor device supporting a variety of functions, notably interactive television applications. Service providers worldwide are aggressively upgrading their equipment to support the migration away from analog television and toward digital television (DTV), with the hopes of improving consumer satisfaction and creating service differentiators.

In markets with a high penetration of DTV subscriptions, support for advanced features such as VoD, DVR/PVR, and other interactive applications are driving the deployment of digital STBs. Another interesting development has been a resurgence in the concept of a residential gateway (RG), which is a complex device capable of delivering multiple services to the home, including video, data, voice, and wireless. This development seems to set up competing hardware paradigms, with two different form factors expanding their roles, with functional overlap, within the home. Right now, there is no clear industry consensus about whether, and to what extent, STB functions will shift to the residential gateway or vice versa.

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