Exciting News on VOD Performance by Network

Video on Demand (VOD) is a rapidly growing form of television. The excitement comes from its double-digit growth, particularly in the “TV Entertainment” category, which consists of free programming put up by the traditional broadcast and cable networks, as well as VOD-only networks. Viewers are finding out that their favorite programs don’t have to be DVR’d, and that when a friend mentions a new show, more often than not, it can be found On Demand.

The VOD industry is also moving in an exciting direction to start sharing data. Rentrak has been producing a “Transparency Report” since January 2012. Forty-eight cable networks first agreed to allow monthly data to be shown. That number has grown to more than 60 cable networks. (As I write this, there are no broadcast networks participating.) I thought my loyal fan base (including the guy with the court order to stay back 500 feet) would be interested in a top line peek.

I first took all the 2012 reporting VOD networks and averaged their results over the first half of 2012. I then graphed them out by what is important to media planners and buyers—reach and frequency. Reach is important because it determines the breadth of the target audience. Frequency is important because it reflects how often ads can be delivered.

In the graph below, the horizontal axis is the average monthly reach, or unique set-top boxes that watched a program on a network. The vertical axis is the average number of times a network was watched per month. The intersection of the two axes is at their respective averages, creating a quadrant map. I’ve labeled the networks that have both high reach and high frequency; they are the ones in the upper right-hand quadrant.

Average Reach & Frequency for VOD by Network

Clearly, Music Choice is a strong outlier, with an average frequency more than four times higher than other networks. The video music format obviously is a big draw for repeat viewing. Also interesting to note is the presence of kid’s networks like Nick Jr., Cartoon Network, and Nickelodeon. Children are “early adopters,” and are masters of the push button (and screen swipe). A&E, TruTV, TBS and Comedy Central round out the quadrant.

However, the picture changes a bit if we look at another key metric—time. The quadrant map below looks at the same networks but has the number of minutes a network was watched on the vertical axis. While the three children’s networks stay in the upper right quadrant, Music Choice slips to the edge. Music Choice, because it is a short form genre, obviously could have many viewers and a lot of frequency yet less dominance in time spent. More networks with longer formatted programs join the quadrant: AMC, History Channel, Impact, Lifetime, MTV, TLC, TNT and VH1. Comedy Central stays on the edge of the quadrant.

Average Reach & Time Spent Viewing for VOD by Network

I’d be a bad researcher if I said this is a definitive look at VOD. Not all networks have agreed to be transparent, and I haven’t even shared with you all the networks we do have data on.

Finally, when you think about those millions of VOD viewers, just waiting for someone to put in a super impactful pre-roll ad as they settle into watch the program they have deliberately decided to engage with, doesn’t the ad man (person) in you salivate? I know I do! And these Rentrak transparency reports will help build the marketplace to make it happen.

More information on VOD can be found in Rentrak’s State of VOD: Trend Report and monthly transparency reports. Please contact Gordon Jones, Rentrak’s VP, OnDemand Everywhere, at gordon.jones@rentrak.com if you are interested in either of these reports.

In case you don’t know, I am Bruce Goerlich, Chief Research Officer at Rentrak, the global standard in movie measurement and your TV Everywhere measurement and research company. I have been in the research end of the marketing business for more than 30 years primarily on the ad agency side, with my last stint prior to Rentrak in the role of President, Strategic Resources Zenith Optimedia North America. Somewhere along the way I morphed from young Turk to old fogey. Now that I have grey hair and am horizontally-challenged, I can speak with some authority on advertising and research issues – which I will do from time-to-time on this blog.

Video On Demand – The Power of Pre-Roll

On Wednesday, March 20th, I gave a talk at ARF Re:think 2013 on video on demand. The following is an excerpt from my talk. Contact me at bruce.goerlich@rentrak.com if you would like the full presentation.

Television as medium has moved beyond fragmentation into granularity as programs are being carried on new platforms such as mobile, the Internet, and video on demand. Video on demand viewership has been growing at double-digit rates, with the largest portion of growth coming from “traditional” TV programs being placed by TV networks. However, there has been little understanding of how commercials perform in video on demand.

The value of advertising time in video on demand is immense, given that viewers have to be actively engaged to select the programs. Video on demand advertising is often structured with the first position, “the pre-roll,” starting before the program content. Rentrak, through its analysis, demonstrates that the “pre-roll” has a very high value. Rentrak’s original research shows much higher indices for ad viewership in the pre-roll position. The metric employed was the Ad Retention Index (ARI), which is the average audience during commercial minutes on video on demand divided by the entire program’s average audience (including ad minutes). The ARI is a concept similar to “C3” on linear TV. The pre-roll ARI for regular duration programs was a 122, and the average pre-roll short duration program was a 129. This high value of audience for pre-roll gives advertisers a unique opportunity to connect with engaged viewers. Rentrak is now also producing a monthly video on demand transparency report on ratings networks have on video on demand. (Details upon request!)

BACKGROUND ON VIDEO ON DEMAND

Currently, there are more than 53 million video on demand-enabled households with an average of two set-top boxes per household. More than 43 million set-top boxes access video on demand content each month.

Consumers who use this medium spend around 8.5 hours per month with video on demand content.

Free video on demand content represented 78 percent of all transactions in 2012. Free video on demand (which includes ad-supported content) is the fastest growing part of video on demand. From 2009 to 2012, free video on demand’s growth rate outpaced that of all video on demand by increasingly wider margins.

Growth Rates in Video On Demand Playtime 2009-2012
We are pleased to see free content coming to video on demand soon after live airings. Content owners are increasingly including linear ad loads in the first three days. Additionally, our research shows the majority of video on demand viewership of TV shows occurs 4+ days after air, presenting additional valuable advertising opportunities. Free on demand offers advertisers an opportunity since much of this content is now (or could be) advertising-supported. However, advertising results are not traditionally broken out. A group of networks approached Rentrak in the fall of 2011 asking for a study of advertising levels using set-top boxes where second-by-second ad detail could be identified.

We used a mathematical technique to identify where ads were located — essentially when there was a huge drop and return in audience. This is shown in the chart below.

Index of HH Audience at :30 Second IntervalsAll the video on demand long form programs had a downward-trending slope of viewership. This can be explained in large part by the fact that there is no subsequent program that follows, so there can be no audience flow “in” once the program starts. Also, therefore, the maximum size of the audience is at the start of program. That large “starting point” means that commercials in the pre-roll position will have the advantage of exposure to all of the program’s viewers. So even with trick play, the ARI for the pre-roll is a 103, while for entire program, the ARI was a 55.

For short-form programs (less than six minutes), we looked at the first 60 seconds to estimate ad position.

The bottom line for the analysis is below.

ARI Video On Demand ResultsWhen one considers that normal DVR playback ratings for commercials are in the 60 percent range, not only is the average video on demand ARI of 71 quite strong, but the pre-roll first position playback of more than 120 is fantastic. Video on demand is a medium that can and will work well for advertisers.

In case you don’t know, I am Bruce Goerlich, Chief Research Officer at Rentrak, the global standard in movie measurement and your TV Everywhere measurement and research company. I have been in the research end of the marketing business for more than 30 years primarily on the ad agency side, with my last stint prior to Rentrak in the role of President, Strategic Resources Zenith Optimedia North America. Somewhere along the way I morphed from young Turk to old fogey. Now that I have grey hair and am horizontally-challenged, I can speak with some authority on advertising and research issues – which I will do from time-to-time on this blog.

Conventional Wisdom

“Conventional Wisdom”

This blog is politically neutral—even if the author isn’t.

While a week can be a lifetime in politics, there is a general consensus that the outcomes of the political conventions were more favorable to the Democrats. Could this be seen in the appeal of the conventions? How well did they draw in their respective bases?

We looked at this question by taking the primetime coverage of the elections across the major networks, PBS, MSNBC, Fox Business News, Fox News and CNN. We used Rentrak’s Advanced Demographics where viewership across 20 million TVs is classified across the political spectrum. Let’s look at the Democratic Convention first (D comes before R!).

The average composition of the audience to the Democratic Convention consisted of 21.2% conservatives, 40.8% liberals, and 38.2% of the aggregate of moderates/mixed and low interest. Compared to the primetime audience average during August to the first week of September for these same networks, we can see in the table below that Democrats were able to pick up 10% more liberals as part of their audience. Conservative composition fell by 7.5%, and the middle segments fell by 2.8%.

COMPOSTION OF PRIME PROGRAM DEMOCRATIC CONVENTION AUDIENCE VERSUS PRIME TIME AVERAGE

Now looking at the Republican Convention we don’t see the same shift to the base. The Republican Convention did not show any major movement by any segment as shown by the table below.

COMPOSITION OF PRIME PROGRAM REPUBLICAN CONVENTION AUDIENCE VERSUS PRIME TIME AVERAGE

Even the solid Republican and conservative-based Fox News channel didn’t show change during the Republican Convention.

COMPOSITION OF PRIME FOX NEWS REPUBLICAN CONVENTION VERSUS ITS PRIME TIME AVERAGE

For whatever reason, it appears the Republicans were not able to stimulate their base.

But the show isn’t over yet, and only Rentrak gives the insight of the political orientation of the audience.

In case you don’t know, I am Bruce Goerlich, Chief Research Officer at Rentrak, the global standard in movie measurement and your TV Everywhere measurement and research company. I have been in the research end of the marketing business for more than 30 years primarily on the ad agency side, with my last stint prior to Rentrak in the role of President, Strategic Resources Zenith Optimedia North America. Somewhere along the way I morphed from young Turk to old fogey. Now that I have grey hair and am horizontally-challenged, I can speak with some authority on advertising and research issues – which I will do from time-to-time on this blog.

‘Tis the Season

“’TIS THE SEASON”

As the summer ends, all thoughts turn naturally to the start of the new TV season. Lots of money and creative effort ride on the success or failure of new shows. One thing I believe could help shows succeed is using classic innovation theory to find the “early adopters”—those people who are more likely to watch new shows­. Promote to them and encourage them to spread the word. Their behavior tracks over time.

One of the wonderful benefits about Rentrak measuring more than 22 million TVs is that it allows us to create segments or advanced demographics that not only cross broadcast years, but are also robust enough to provide consistent insights over those years. To study the “early adopters” of TV shows, we looked at viewers of new TV series in both the springs and summers of 2010 and 2011. Our key determinate was viewership to 44 new shows in 2010. We divided HHs by the number of hours they viewed these shows, creating three groups: new show adopters, moderates and avoiders. We made sure we had the homes in both years. We then looked at those same groups’ viewership to another group of new shows in 2011.

The first thing we noticed is that the “adopters” stayed pretty consistent year-to-year. As the chart below shows, in 2010 the new show early adopters had a 171 index in terms of hours spent with the new shows versus the average HH and, while dropping in 2011 to a 137 index, still remained quite high.

Both the moderate and the avoiders’ hours also moved to the average (“regressed to the mean”), but they still held their relative positions. This means that using an advanced demographic created in one year, can be used to predict behavior in the second year. This is key for any sort of promotion activity for a TV network, or for any type of viewer segmentation that an advertiser or agency needs.

The proof can be seen in the details. Each dot in the chart below represents a program that aired in the spring and summer of 2010. The vertical axis is the rating against the New Show Adopters; the horizontal rating is the rating against the total U.S. You can see that the New Show Adopter ratings are much higher, and that there is a good fit (the blue line-stats folks can see the values in the legend box), the higher the New Show Adopter rating, the higher the general market rating. Because there are so many shows, it wouldn’t be clear to label them all. I’ve labeled the breakout show Rizzoli and Isles. It really pulled in the New Show Adopters! And it was renewed!

Now the cool thing is, we can take those same people (the folks who were New Show Adopters in 2010) and see what they did in 2011—they were still helping to drive up new show ratings. The chart below shows those 2010 New Show Early Adopters and their ratings to 2011 new shows on the vertical axis and the total U.S. rating on the horizontal. Each dot represents a new show that aired in 2011. The statistical fit is still good. In this case, I’ve called out two very successful new shows, Franklin & Bash and Falling Skies, both of which were renewed.

This ability to look at advanced demographics over time, and have the results be consistent and predictive is a powerful result of the massive size of Rentrak’s footprint.  A happy result for us and for our clients!

In case you don’t know, I am Bruce Goerlich, Chief Research Officer at Rentrak, the global standard in movie measurement and your TV Everywhere measurement and research company. I have been in the research end of the marketing business for more than 30 years primarily on the ad agency side, with my last stint prior to Rentrak in the role of President, Strategic Resources Zenith Optimedia North America. Somewhere along the way I morphed from young Turk to old fogey. Now that I have grey hair and am horizontally-challenged, I can speak with some authority on advertising and research issues – which I will do from time-to-time on this blog.

Having a Heat Wave

It has been an unusually hot summer, and I don’t know about you, but when I get hot, I immediately think of local news. I want to check the weather and see what Mother Nature has in store for me. And I am not the only one. Rentrak’s TV viewing data shows that viewers tune in to local news to get a better picture of the need to pack in more lemonade (or beer).

To do a little test of the hypothesis that local news benefits from the heat, I looked at Des Moines for the month of June. I started with the premise that Monday through Friday news and weather behavior deserved to be looked at in isolation, given the work week and the content of the news. Therefore, I averaged the daily maximum temperatures for the month from the National Climatic Data Center Preliminary Monthly Estimates for the weekdays (Monday through Friday) and then indexed each weekday against that average temperature. You can see the daily maximum temperatures below.

I then pulled the average ratings for Early Fringe and Late Fringe news programs (over 200 telecasts) for the same days from Rentrak’s StationView Essentials for the Des Moines market. I averaged them and indexed each day against the average. You can see the daily averages below.

I then slapped the indices together in a statistical analysis and voila! It didn’t work. The fit was weak. There were a couple of days, like June 15th where the news just popped up and the model was out of whack. What was going on?

I then realized that local is indeed local. Des Moines is suffering from a terrible drought. It isn’t just heat that would drive Iowans to their TV news; it is also the chance and actuality of rain. When I threw in the rainfall during the month, the model worked well with a R2 of .61. The chart below shows the results. The rainfall on the 15th did in fact drive up local news viewership.

June in Des Moines shows the continued relevance of local news in an important aspect of peoples’ lives – even in this day of instant information.

Has anyone ever tried lemonade in beer?

In case you don’t know, I am Bruce Goerlich, Chief Research Officer at Rentrak, the global standard in movie measurement and your TV Everywhere measurement and research company. I have been in the research end of the marketing business for more than 30 years primarily on the ad agency side, with my last stint prior to Rentrak in the role of President, Strategic Resources Zenith Optimedia North America. Somewhere along the way I morphed from young Turk to old fogey. Now that I have grey hair and am horizontally-challenged, I can speak with some authority on advertising and research issues – which I will do from time-to-time on this blog.

Let’s Go To The Movies!

In times of stress (and when is life not a time of stress?), the movies are a great form of escape and uplift. One thing I think those of us that are Americans don’t realize is how much the movie business also uplifts our economy. And if we do realize this, movies are treated as an economic horse race with which a film “meets expectations” or the U.S. opening weekend gross is the sole determination of a movie’s success. Let’s step back and look at the bigger picture.

The numbers below are the actual weekly box office numbers for films distributed by U.S. studios. Each Sunday, Rentrak updates its website with the most current information collected 24 hours a day from theaters around the world. The table shows the worldwide, international and domestic U.S. dollars for the top grossing films through June 24. The movies are ranked in descending order according to percentage of international dollars.

Note the healthy amount of money being spent on just these top-grossing films – almost $4 billion. Also see that 57% of the money comes from outside North America, with seven major releases securing over 50% of their revenue from international markets – all of which helps our balance of trade. And, this is just the first window for a film’s release. Digital downloads, DVD rentals and sales, On Demand, and cable airings all follow. (All of which are only tracked by Rentrak.) This is truly the “big picture.”

In case you don’t know, I am Bruce Goerlich, Chief Research Officer at Rentrak, the global standard in movie measurement and your TV Everywhere measurement and research company. I have been in the research end of the marketing business for more than 30 years primarily on the ad agency side, with my last stint prior to Rentrak in the role of President, Strategic Resources Zenith Optimedia North America. Somewhere along the way I morphed from young Turk to old fogey. Now that I have grey hair and am horizontally-challenged, I can speak with some authority on advertising and research issues – which I will do from time-to-time on this blog.

‘P’ is for Politics

As we wade knee-deep into the presidential race, often called, the “silly season,” I’d like to turn my readers’ attention to the relationship between how people vote and what they watch. One of the cool things about having millions of TV sets to play with is the ability to set up robust segmentation systems that actually work in the marketplace. This is what Rentrak has done in the political arena by creating seven groups of homes: Very Liberal, Somewhat Liberal, Middle of the Road, Somewhat Conservative, Very Conservative, Low Involvement and Mixed. Households were scored on their viewership to 50 programs identified in surveys as being very liberal or very conservative. Low Involvement homes watched hardly any of these shows, and Mixed Households watched a lot of both conservative and liberal shows. (See the grid below.)

This system works really well in terms of showing the alignment between voting and viewing. Going back to the days of yesteryear, e.g. January, we compared the viewership composition of the Republican debate prior to the primary election by counties that Mitt Romney won and Newt Gingrich (remember him?) won. It is clear that the viewers in the 34 counties who voted for Romney were more moderate and liberal, and the viewers in the 33 counties who voted for Gingrich were more conservative. Perhaps if Gingrich had used Rentrak’s data to place more targeted ads against moderates in the Romney counties he could have done better?

Being able to identify the political leanings of viewers can be a powerful aid in more efficiently placing the huge amounts of money political campaigns spend.  Maybe “silly” can now be replaced with “sensible.”

In case you don’t know, I am Bruce Goerlich, Chief Research Officer at Rentrak, the global standard in movie measurement and your TV Everywhere measurement and research company. I have been in the research end of the marketing business for more than 30 years primarily on the ad agency side, with my last stint prior to Rentrak in the role of President, Strategic Resources Zenith Optimedia North America. Somewhere along the way I morphed from young Turk to old fogey. Now that I have grey hair and am horizontally-challenged, I can speak with some authority on advertising and research issues – which I will do from time-to-time on this blog.