Despite the massive scale of YouTube—100 million unique monthly viewers and billions of streams—it’s the old school broadcast networks that dominate online video advertising, claiming more than half the dollars in the market according to a recent report issued by the London, England-based media analyst firm Screen Digest.
The new report, “US Networks claim half of free online TV market” found that in 2008, ABC, CBS, NBC, Fox and Hulu (the joint video venture between News Corp., Disney and NBC Universal) pulled in $448 million in ad revenue, representing 53 percent of the online video market. The other 47 percent of ad revenue went to traditional Web portals, sports leagues and directly to content owners, said the report.
Screen Digest predicts that by 2013, this market will balloon to $1.45 billion, an increase of over 300 percent. However, to keep things in perspective, that figure is expected to represent just 2.2 percent of all US TV advertising revenue in 2013, and that’s after TV ad marketplace is expected to lose roughly $2 billion over the next four years.
Still, the fact that broadcasters are fueling this growth after many started late on the Web is significant (the new report echoes similar findings by Magna Global in a report issued in April). In fact, Screen Digest’s predicts a tough going for third-party aggregators like YouTube and struggling platforms such as Joost.
Those companies, “which have no direct vertical affiliation with major rights holders, nor direct access to premium content rights, will struggle to aggregate ad-supported movies and TV shows,” says the report. So, despite a recent effort by YouTube to expand into long-form, ad-supported content, Screen Digest predicts that “The Hollywood Studios and major rights holders will continue to limit such deals”--focusing on their own Web video platforms, such as he CBS Audience Network and Sony Pictures’ Crackle.
What should third party aggregators do? Screen Digest recommends either pushing their own original content, or getting out of the aggregation business to focusing on technology or new advertising services.