e 0809 video content-1

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Executive Summary: Online video content is on a clear upward trajectory.Audience levels and stream counts are rising, the demographic range of the viewing population is expanding and the content mix is evolving from short, snack-type clips to long-form content such as TV shows and feature films. 105370 As the medium matures, monetization models are coming into clearer focus. Most video inventory is funded through ad support. This includes user-generated content, news clips, humor videos, TV shows and special events such as the Olympics. On the other side of the coin, feature films and mainstream sports content continue to be monetized through subscriptions and download fees. In the next several years, mobile distribution through smartphones will expand the reach of Web video. Improvements in streaming quality, including HD, will also go a long way toward making the online video experience more attractive to users.As these trends unfold, technology innovations will close the gap between the PC, the TV and the digital cable box.The result will be a smoother flow of content from platform to platform, ultimately enabling consumers to enjoy video wherever and however they choose. Key Questions How many people in the US are watching online video, and how will this number change? Which forms of content are getting the most traction? How is online video being monetized? Which sites dominate the online video landscape? What are some of the trends that will fuel the growth of online video in the next few years? Video Content: A Premium Opportunity August 2009 ® Paul Verna, Senior Analyst [email protected] Digital Intelligence Copyright ©2009 eMarketer, Inc. All rights reserved. The eMarketer View 2 Audience Size 3 Audience Makeup 6 Online Video Content Landscape 9 Monetizing Online Video 12 Top Video Sites 13 Future Trends 14 Conclusions 16 Endnotes 16 Related Information and Links 17 US Online Video Viewers and Penetration, 2008-2013 2008 2009 2010 2011 2012 2013 Online video viewers (millions) 135 144 154 165 177 188 % of Internet users 70% 72% 75% 78% 82% 85% % of population 44% 47% 50% 53% 56% 59% Note: individuals who download or stream video at least once per month Source: eMarketer, July 2009 105370 www.eMarketer.com For additional information on the above chart, see Endnote 105369 | 105370 in the Endnotes section.

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Page 1: E 0809 Video Content-1

Executive Summary: Online video content is on a clear upward trajectory.Audience levels and stream counts arerising, the demographic range of the viewing population is expanding and the content mix is evolving from short,snack-type clips to long-form content such as TV shows and feature films.

105370

As the medium matures,monetization models are coming intoclearer focus.Most video inventory is funded through ad support.This includes user-generated content,news clips,humor videos,TV shows and special events such as the Olympics.On the other side of the coin, feature films and mainstream sportscontent continue to be monetized through subscriptions anddownload fees.

In the next several years,mobile distribution through smartphoneswill expand the reach of Web video. Improvements in streamingquality, including HD,will also go a long way toward making theonline video experience more attractive to users.As these trendsunfold, technology innovations will close the gap between the PC,the TV and the digital cable box.The result will be a smoother flowof content from platform to platform,ultimately enablingconsumers to enjoy video wherever and however they choose.

Key Questions■ How many people in the US are watching online video, and

how will this number change?

■ Which forms of content are getting the most traction?

■ How is online video being monetized?

■ Which sites dominate the online video landscape?

■ What are some of the trends that will fuel the growth of onlinevideo in the next few years?

Video Content:A Premium Opportunity

August 2009

®

Paul Verna,Senior [email protected]

Digital Intelligence Copyright ©2009 eMarketer, Inc. All rights reserved.

The eMarketer View 2Audience Size 3Audience Makeup 6Online Video Content Landscape 9Monetizing Online Video 12Top Video Sites 13Future Trends 14Conclusions 16Endnotes 16Related Information and Links 17

US Online Video Viewers and Penetration, 2008-20132008 2009 2010 2011 2012 2013

Online video viewers (millions) 135 144 154 165 177 188

% of Internet users 70% 72% 75% 78% 82% 85%

% of population 44% 47% 50% 53% 56% 59%

Note: individuals who download or stream video at least once per monthSource: eMarketer, July 2009

105370 www.eMarketer.com

For additional information on the above chart, seeEndnote 105369 | 105370 in the Endnotes section.

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The eMarketer View

105369

For additional information on the above chart, seeEndnote 105369 | 105370 in the Endnotes section.

Trying to view video on a computer used to be anexercise in frustration. As recently as four years ago, thefew sites that featured video content forced viewers to downloadclips or launch dedicated streaming players.The idea ofembedding a clip within a browser and having it play instantlyseemed like the Holy Grail.

Today, the online video experience is light-years away from itshumble origins. Propelled by YouTube,Web portals, premium sitesand other sharing destinations, the Web has exploded with videocontent—most of it available for free to the consumer in browser-friendly interfaces. Best of all, the bulk of the currentvideo inventory is sharable through social networks, blogs,microblogs, e-mail and other social platforms.This capabilitymakes every video a potential viral hit and opens opportunities forcontent distributors and marketers to monetize the medium.

Much of the growth in the Web video space over thepast year has come from premium content—TVshows, movies, news programs and mass-mediaevents that have played out online. Entertainmentcontent has proliferated on venues such as Hulu and YouTube,while the Websites of major media outlets such as The New YorkTimes and CNN have also ramped up their video offerings.

“Publishers are focusing on quality content,people are upgrading their players andwe’re seeing more HD content. Online videois no longer grainy, 4-by-4, pixelated images.As Hulu proves, there is a market for long-form content in the form of 30-minuteor hour-long TV episodes.” —Michael Mathieu,CEO,YuMe, in an interview with eMarketer, July 2009

The result has been a climate in which the Web is an increasinglyimportant part of the media mix for US consumers.Whether theywant to catch up on a TV episode they missed or follow a breakingnews story, viewers now tune in to a growing array of online videodestinations. President Obama’s inauguration and MichaelJackson’s funeral epitomized a landscape where tens of millions ofpeople experience events through live video streams.

As online video matures, audiences are growingcommensurately in size and demographic diversity.Gone are the days when the space was dominated by short user-generated clips aimed primarily at a collegiate crowd. Now,video offerings cater to all age groups and interests, from teenagesports buffs to news junkies to retirees who enjoy classic movies.

Several studies have shown that recent growth has been drivenprimarily by older viewers. Still, viewing levels tend to be highestamong 18-to-24-year-olds, indicating that online video is still farfrom a level playing field. In general, younger viewers are morecomfortable with the video experience, and it will take more timefor older adults—including boomers and seniors—to catch up.

The rule of thumb with ad-supported online video isthat premium content is where the ad dollars aregoing. The long tail notwithstanding, marketers like to attach theirbrands to predictable, hit properties.Accordingly, most episodictelevision, news and event programming is ad-supported.

By contrast, humor and user-generated clips—the genres thatmake up most of the inventory on popular sites such asYouTube—have proven more difficult to monetize because of theunpredictable nature of the content.

The other way video is monetized is through direct transactions.The bulk of feature film and premium sports programming isfunded through subscriptions and download fees. Movie studiosand sports leagues seem comfortable with this model despite theconstant threat of digital piracy—and fans have been willing to pay.

With the exception of Hulu, the top US online videodestinations have not changed dramatically overthe past year. Hulu—which is a joint venture of NBC Universal,News Corp. and Disney—is the fastest-growing video property onthe Web and is now ranked among the top three or four sites interms of stream count and unique visitors.

Key eMarketer Numbers — Video Content

188 million US online video viewers in 2013, up from 144million in 2009

85% % of US Internet users who will be online videoviewers in 2013, up from 72% in 2009

59% % of US population who will be online videoviewers in 2013, up from 47% in 2009

Note: individuals who download or stream video at least once permonthSource: eMarketer, July 2009

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The eMarketer View

Hulu’s success is largely the result of filling a void in the market fora one-stop destination for premium, ad-supported content,particularly TV shows.A broadcast TV ad blitz that started duringthe Super Bowl probably helped cement the idea in people’sminds that they could enjoy a growing selection of first-run shows,as well as older classics, online.

“I think the audience might watch longervideo content. Hulu is proving that theaudience will stick around.” —Keith Richman,CEO,Break Media, in an interview with eMarketer, July 2009

For all of Hulu’s success in the premium sphere,YouTube remainsthe clear leader among video sites by most relevant metrics,including stream count and unique viewers.YouTube is still the go-to destination for user-generated clips, but the Google-ownedcompany has been trying to broaden its offerings to includepremium content. Its strategy has been to sign content deals withfilm studios and TV program owners that are not affiliated withHulu. Despite its efforts at reshaping its brand,YouTube has a longway to go to shake its association with homespun videos.

A number of trends will keep online video on anaggressive growth trajectory in the coming years.These include mobile distribution through smartphones and next-generation networks;HD streaming and other qualityenhancements;better integration among PCs,digital cable boxesand TVs;and interactivity features that work better online than on TV.

“In the US, we’ve finally got a critical mass ofsmartphones that can stream Web video ina way that’s commensurate with people’sexpectations.” —Cameron Brain, CEO, Open BoxTechnologies, in an interview with eMarketer, July 2009

New monetization experiments will also shape the future of onlinevideo.YouTube and Hulu have both publicly floated the notion ofcharging consumers for some content, and media companies arealso considering paid subscriptions after migrating most of theircontent to ad-supported models. Internet service providers arealso experimenting with metered bandwidth schemes, so if thesetake off, the heaviest users of Web video would presumably haveto pay for their consumption.

It is difficult to imagine the public tolerating a return to paid contentfor video genres that are currently ad-funded.Accordingly, themost likely scenario is that Hulu and YouTube might charge a fee forultrapremium content such as movies and sports, and leave therest of their inventory—TV shows, news, humor, user-generatedclips—in ad-supported formats.

Audience Size

Behind the Numbers:US Online Video Viewers

The growth of the US online video audience will befueled by a confluence of factors that include:

■ Improvements in streaming quality and increasingavailability of HD content online

■ Direct access to Web content through smartphoneWeb browsers

■ A broadening content mix that ranges from short-form user-generated clips to episodic TV, livesports and feature films

■ A movement toward clear monetization models foronline video, with episodic TV and mass-medianews clips leading the way in the ad-supportedrealm, and feature films and sports capturingtransactional revenues

■ Better integration between Web-enabled devices—such as personal computers, smartphones andnetbooks—and traditional viewing platforms suchas TVs and digital cable boxes

The number of US online video viewers will grow to 188 million in2013, from 144 million in 2009.These figures represent individualswho download or stream video content at least once per month.

105370

For additional information on the above chart, seeEndnote 105369 | 105370 in the Endnotes section.

Online video viewers will make up 85% of Internet users in 2013,up from 72% in 2009.This will put online video within range of Webactivities such as search and e-mail, which are nearly at saturationpoints among US Internet users.

Relative to the US population as a whole,online video will achieve a59% penetration rate in 2013,up from 47% in 2009.The mass-markettipping point will occur in 2010,when online video will be viewed by50% of US consumers.

US Online Video Viewers and Penetration, 2008-20132008 2009 2010 2011 2012 2013

Online video viewers (millions) 135 144 154 165 177 188

% of Internet users 70% 72% 75% 78% 82% 85%

% of population 44% 47% 50% 53% 56% 59%

Note: individuals who download or stream video at least once per monthSource: eMarketer, July 2009

105370 www.eMarketer.com

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Audience Size

Nielsen Online put the number of US unique viewers of online videoat 134 million in May 2009—a 12.8% increase over the prior-yearfigure—while comScore estimated 152 million viewers in April 2009.

105642

For additional information on the above chart, seeEndnote 105642 in the Endnotes section.

A survey by Arbitron and Edison Media Research noted risingpenetration of online video viewing over a six-year span. In 2009,27% of US consumers ages 12 and older had viewed an online clipin the past week, up from 3% in 2003.

103616

A UBS study projected that the number of US online-video-connectedhouseholds would increase to 39 million by 2012 from 15 million in2009.Assuming that the average US household size is 2.6 people(using the US Census Bureau’s 2005–2007 estimate), the UBS figuresequate to roughly 101 million people in the US with access todedicated online video devices (other than computers) by 2012.

104941

Ipsos MediaCT tracked video streaming and downloading amongUS Internet users from December 2007 to September 2008 andfound increased usage across the board.The proportion ofInternet users who streamed free or paid video rose to 57% inSeptember 2008, from 50% in December 2007.The survey alsonoted increases in the number of people who streamed moviesand TV shows during that period.

100503

Comparative Estimates: US Online Video Viewers,2009 (millions)

comScore Inc.*, June 2009 151.7

eMarketer, July 2009 144.0

Nielsen Online**, June 2009 133.8

Note: *home, work and university locations; data for April 2009; **data forMay 2009Source: eMarketer, July 2009; various, as noted, June 2009

105642 www.eMarketer.com

US Online Video Viewers, 2003-2009 (% ofrespondents)

2003 3%

2004 7%

2005 8%

2006 12%

2007 15%

2008 18%

2009 27%

Note: ages 12+ who have viewed an online video in the past weekSource: Arbitron and Edison Media Research, "The Infinite Dial 2009"sponsored by TargetSpot, April 16, 2009

103616 www.eMarketer.com

US Online-Video-Connected Households*, 2009 & 2012(millions)

2009 15

2012 39

Note: *households with a networked online video device, such as gamingconsoles, media extenders (e.g., Apple TV), standalone media boxes orDVRsSource: UBS, "Q-Series: Global Media Themes," June 22, 2009

104941 www.eMarketer.com

US Internet Users Who Have Streamed Video*,December 2007 & September 2008 (% of respondents)

Streamed movie

5%

17%

Streamed TV show

12%

25%

Total streamed (all video content)

50%

57%

December 2007 (n=862) September 2008 (n=935)

Note: ages 12+; *free or paid in the past 30 daysSource: Ipsos MediaCT, "Motion" as cited in press release, December 18,2008

100503 www.eMarketer.com

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Audience Size

Similarly, Ipsos noted an uptick in the number downloading videocontent, as well as corresponding increases in the downloading ofmovies and TV shows. However, these were modest comparedwith the more dramatic increases in streaming activity—abarometer of the success of streaming sites such as Hulu.

100507

Another indication of the growth in TV show viewing came from aKnowledge Networks study. From 2006 to 2008, the percentagesof US Internet users who accessed full-length TV shows grew bylarge margins across every age category.

101753

A Deloitte survey of more than 2,000 US Internet users found that70% viewed user-generated clips, and 80% of those viewersregularly watched full clips to completion.These percentageswere nearly identical to those for professional clips.

100936

An Office of Communications (Ofcom) and Synovate study foundthat 47% of US Internet users watched or downloaded shortclips—more than double the number who reported watching ordownloading longer content, such as TV shows or films.

100522

US Internet Users Who Have Downloaded a DigitalVideo* File, December 2007 & September 2008 (% ofrespondents)

Downloaded movie

8%

11%

Downloaded TV show

7%

11%

Total downloaded (all video content)

19%

22%

December 2007 (n=862) September 2008 (n=935)

Note: ages 12+; *free or paid in the past 30 daysSource: Ipsos MediaCT, "Motion" as cited in press release, December 18,2008

100507 www.eMarketer.com

US Internet Users Who Access Full-Length TVPrograms Online, by Age, 2006 & 2008 (% of eachgroup)

18-54

10%

21%

13-17

11%

28%

18-34

12%

26%

35-49

8%

16%

50-54

1%

9%

2006 2008

Source: Knowledge Networks Inc., "How People Use TV's WebConnections" as cited in press release, February 12, 2009

101753 www.eMarketer.com

Internet Users in Select Countries Who Watch User-and Professionally Generated Video,September-October 2008 (% of respondents)

Brazil Germany Japan UK US

User-generated

% who watch 85% 58% 62% 63% 70%

of which: % whoregularly watch acomplete video

80% 59% 42% 71% 80%

Professionallygenerated

% who watch 88% 59% 78% 64% 71%

of which: % whoregularly watch acomplete video

87% 60% 42% 71% 79%

Source: Deloitte, "State of the Media Democracy Third Edition," provided toeMarketer, January 12, 2009

100936 www.eMarketer.com

Online Video Consumption of Internet Users in SelectCountries, by Type, October 2008 (% of respondents)

Watch or download short

video clips*

Watch or download longer video

content**

Canada (n=1,000) 50% 22%

France (n=1,000) 43% 21%

Germany (n=1,002) 47% 14%

Italy (n=1,003) 45% 27%

Japan (n=1,003) 39% 18%

UK (n=1,001) 47% 23%

US (n=1,010) 47% 23%

Note: ages 18-64; *including those made by other people; **such asfeature films or complete TV programsSource: Office of Communications (Ofcom) - UK, "The InternationalCommunications Market 2008” conducted by Synovate, November 20,2008

100522 www.eMarketer.com

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Audience Makeup

With so many studies showing increases in online

video viewing, it is worth a look at the demographics

to discern patterns in the growth trends.

An Accenture study of Generation Y (ages 18 to 24) and babyboomer/senior (ages 45 and up) Internet users found that only the latter group showed growth in online video activity. InNovember–December 2008, 36% of boomer/senior respondentssaid they watched or posted videos online, compared with 26% inDecember 2007. By contrast, the responses in the 18-to-24 groupwere virtually unchanged—albeit still higher than among the older segment.

103117

Another age-based study, by Knowledge Networks, tracked theuse of TV network and third-party video sites from 2006 to 2008.The survey noted relatively small changes in the percentages ofrespondents who said they used network sites, with some agegroups showing slight gains, others showing slight decreases andothers essentially flat.

However, the use of third-party sites grew dramatically amongolder respondents, quadrupling in the 50-to-54 group and morethan doubling in the 35-to-49 group.At the other end of the scale,the 13-to-17 group saw a slight decline in the use of third-partysites.The resulting responses in 2008 were relatively close fromone age group to another, in contrast to 2006, when youngerviewers were watching videos in far greater proportions than theirolder counterparts.

101751

Select Digital Media Activities of US Internet Users,by Generation, December 2007 &November-December 2008 (% change)

Reading blogs orlistening to podcasts

Connecting on socialnetworking sites

Playing video games onthe go (via mobiledevice)

Listening to music oniPod or other portableplayer

Watching/postingvideos on the Internet

Generation Y(18-24)

December2007

45%

80%

44%

68%

68%

November-December

2008

45%

82%

45%

76%

67%

Baby boomers (45+)

December2007

15%

18%

9%

21%

26%

November-December

2008

26%

28%

13%

31%

36%

Source: Accenture, "Consumer Electronics Products and Services UsageReport" conducted by Survey.com, provided to eMarketer, March 2009

103117 www.eMarketer.com

Methods Used by US Internet Users to Stream TVNetwork Content, by Age, 2006 & 2008 (% ofrespondents*)

13-54 13-17 18-34 35-49 50-54

2006

Use TV networkWebsites to viewvideo

61% 56% 61% 65% 53%

Use third-partyvideo sites toview networkvideo

16% 27% 15% 12% 8%

2008

Use TV networkWebsites to viewvideo

63% 51% 68% 64% 53%

Use third-partyvideo sites toview networkvideo

28% 26% 30% 26% 32%

Note: *among those who access full TV programs onlineSource: Knowledge Networks Inc., "How People Use TV's WebConnections" as cited in press release, February 12, 2009

101751 www.eMarketer.com

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Audience Makeup

Nielsen also noted greater percentage gains among older viewers ina study spanning from November 2008 to April 2009.The 35-to-49group showed the biggest gain in average time spent viewing duringthis period, followed by the 65-and-over group.Younger adults andteenagers registered smaller increases in viewing minutes.

104094

Even with these gains, older viewers have some catching up to doto close the viewing gap. Nielsen’s data showed that, on average,18-to-24-year-olds spent the most time viewing video, followed bythe 25-to-34 group.

A study by conducted by Ball State University and Sequent Partnersfor Nielsen’s Council for Research Excellence reached the sameconclusion. In spring and fall 2008, 18-to-24-year-olds spent themost time watching online video, followed by 25-to-34-year-olds.The correlation between age and time spent viewing continuedthrough the 65-and-up group in the study.

For all the gains that online video has made, the medium stillrepresents a small fraction of time spent viewing, relative to TV. Onaverage, US consumers spent 2.4 minutes per day watchingcomputer video during the survey period, which was less than 1%of the 309 minutes they spent watching live TV.

102749

Average Time Spent Viewing Online Video Among USInternet Users, by Age and Gender, November 2008 &April 2009 (minutes per viewer and % change)

November 2008

April 2009

% change

Gender

Male 209 249 19%

Female 151 170 12%

Age

2-11 113 116 3%

12-17 178 190 7%

18-24 303 349 15%

25-34 253 296 17%

35-49 187 243 29%

50-64 122 139 14%

65+ 67 81 21%

Total 178 206 16%

Note: home and work locationsSource: Nielsen Online, "VideoCensus" as cited in press release, May 14,2009

104094 www.eMarketer.com

Average Time Spent per Day with Select MediaAmong US Consumers, by Age, Spring & Fall 2008(minutes)

Live TV

Playback TV via DVRor TiVo

DVD or VCR

Console games

TV total

Any Web

E-mail

IM

Any software

Computer video

Computer total

Mobile talk

Mobile text/multimediamessaging

Mobile Web

Mobile other (video,camera, games, etc.)

Mobile video

Mobile total

Environmental/othervideo

In-cinema movie

GPS navigation

Other total

Total

18-24

209.9

17.2

34.0

25.9

287.0

67.0

20.3

14.8

61.8

5.5

169.5

29.1

11.6

0.8

1.1

0.1

42.8

9.2

1.2

0.0

10.4

509.7

25-34

256.0

15.9

35.4

13.9

321.2

55.7

45.1

2.9

50.3

4.3

158.3

19.0

2.2

2.3

0.6

0.0

24.0

4.9

1.6

1.2

7.6

511.1

35-44

230.4

17.2

27.4

4.9

279.9

74.1

46.5

14.6

61.6

2.6

199.3

24.7

2.1

0.6

0.6

0.1

28.0

2.6

3.1

0.3

5.9

513.1

45-54

335.7

19.4

20.6

3.0

378.7

46.0

51.4

15.1

52.1

2.0

166.4

17.8

1.3

0.7

0.5

0.1

20.5

4.8

0.6

2.6

8.0

573.6

55-64

346.1

8.5

14.0

1.2

369.7

41.7

37.8

0.0

35.8

1.2

116.5

12.3

0.4

1.3

0.2

0.0

14.2

4.1

3.0

4.1

11.1

511.5

65+

420.5

7.2

11.4

0.3

439.4

19.2

11.1

0.3

15.6

0.2

46.5

3.1

0.1

0.0

0.1

0.0

3.2

3.6

2.0

3.8

9.4

498.5

Total18+

309.1

14.6

22.9

6.5

353.1

48.8

37.4

7.9

46.1

2.4

142.5

16.6

2.2

0.9

0.5

0.1

20.2

4.4

1.8

2.0

8.2

524.0

Note: numbers may not add up to total due to roundingSource: Council for Research Excellence, "Video Consumer Mapping"conducted by Ball State University's Center for Media Design and SequentPartners, March 26, 2009

102749 www.eMarketer.com

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Audience Makeup

Leichtman Research Group analyzed weekly viewing of TVepisodes online and found that 18-to-24-year-olds were the mostlikely to be viewers, at 28%. By contrast, only 6% of boomers and2% of seniors reported watching TV episodes weekly.

104538

BlogHer, iVillage and Compass Partners studied female Internet usersand found that 74% of 18-to-26-year-olds watched online video.At theother end of the spectrum,only 20% of 63-to-77-year-old womenreported watching online video.

103514

Lightspeed Research also noted higher levels of video viewingamong younger Internet users. However, there was little variationamong cohorts, and the 45-to-54 group had a greaterrepresentation of viewers than the 35-to-44 group—a slightdeviation from the tight age correlations noted in other studies.

104077

A Nielsen study of the gender split of the US online video audienceshowed that women outnumbered men by 8 percentage points, at54% compared with 46%.

102837

However, when it came to time spent viewing, a study done byUSC Annenberg for Cisco found that men spent an average of 1.6hours per day watching video on their computers, compared with1.3 hours per day for women. USC Annenberg and Cisco notedsimilar gender patterns when it surveyed Internet users whowatched professional and user-generated content.

101860

Demographic Profile of US Internet Users, by TimeSpent Watching Online Video on Their Computer,October-November 2008 (hours per day)Gender

Female 1.3

Male 1.6

Age

18-24 1.7

25-34 1.6

35-44 1.5

45-54 1.3

55-65 1.2

Education

High school or less 1.7

Some college or an associates degree 1.6

Four-year college degree or more 1.3

Location

Urban 1.8

Suburban 1.3

Rural 1.4

Online experience

Experienced users* 1.4

Newer users** 1.7

Average time spent 1.5

Note: *10+ years; **<3 yearsSource: USC Annenberg School Center for the Digital Future, "Cisco VideoProject Report" commissioned by Cisco, December 17, 2008

101860 www.eMarketer.com

US Internet Users Who View Recent TV EpisodesOnline Weekly, by Age, December 2008-January 2009(% of respondents in each group)

12-17 26%

18-24 28%

25-44 13%

45-64 6%

65+ 2%

Source: Leichtman Research Group, Inc. (LRG), "Emerging Video Services III"as cited in press release, February 23, 2009

104538 www.eMarketer.com

US Female Internet Users Who Watch Video, TV and/orMovies Online, by Age, March 2009 (% of respondents)

18-26 74%

27-43 53%

44-62 34%

63-77 20%

Total 18-77 45%

Note: n=2,281Source: BlogHer, iVillage and Compass Partners LLC, "2009 Social MediaStudy," April 2009

103514 www.eMarketer.com

Online Video Activities of US Internet Users, by Age,January 2009 (% of respondents in each group)

16-17 18-24 25-34 35-44 45-54 55-64

Watched a video clip 82% 82% 73% 67% 71% 65%

Shared a video clip 52% 47% 48% 35% 31% 29%

Uploaded a video clip 46% 41% 35% 32% 26% 21%

Note: in the past monthSource: "Global Web Index" conducted by Lightspeed Research, May 28,2009

104077 www.eMarketer.com

US TV, Online Video and Mobile Video Viewers, byGender, Q4 2008 (% of total)

On the Internet

46% 54%

On TV

47% 53%

On mobile phones

63% 37%

Male Female

Source: The Nielsen Company, "A2/M2 Three Screen Report - 4th Quarter2008," February 23, 2009

102837 www.eMarketer.com

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Online Video Content Landscape

A comScore study of US online video streams and

streamers showed that in April 2009, the

entertainment category accounted for the largest

number of online streams,with a total of 9.3 billion.

Entertainment also led by every other metric

tracked by comScore—number of streamers,

reach, streams per viewer and minutes per stream.

105643

Within the entertainment category, the clear winner was“multimedia”—comScore’s shorthand for videos on popular sitessuch as YouTube and MTV.

Not only were the entertainment category and its multimediasubset the leading entries in comScore’s April 2009 ranking, theyalso experienced the most growth since June 2008, whencomScore published a similar list.

“Some of our most successful partners areusers who upload lots of short sketches andother clips, and many of them are makingenough money from advertising to run theirsmall media companies as a full-time job.”—Suzie Reider, head of advertising sales,YouTube,in an interview with eMarketer, July 2009

A comparison between comScore’s 2008 and 2009 figuresshowed that the number of multimedia streams grew by 412%,leading the entertainment category to 282% growth as a whole.

105644

The comScore comparison offers a glimpse into the evolution ofonline video over the past year.Television, movie andentertainment news content each grew on the order of 50%,reflecting an increase in the number of TV shows and filmsavailable online through sites such as Hulu—as well as thepublic’s seemingly insatiable obsession with celebrity news.

US Online Video Streams and Streamers, by ContentCategory, April 2009

Entertainment

News/information

Conversationalmedia

Community

-Multimedia*

-TV

-Kids

-Entertainment–movies

-Entertainment–music

-Humor

-Entertainment–news

-Radio

Portals

-General news

-Weather

-Newspapers

-Social networking

-Family and parenting

Retail

Sports

Streamers(millions)

134

124

57

26

23

22

14

10

7

79

68

59

8

8

60

58

43

17

33

22

Streamerreach

89%

82%

37%

17%

15%

14%

9%

7%

5%

52%

45%

39%

6%

5%

40%

38%

29%

11%

22%

15%

Streams(millions)

9,348

7,914

536

424

84

140

86

35

31

784

513

449

17

21

469

452

355

240

122

170

Streamsper

streamer

70

64

10

16

4

6

6

4

4

10

8

8

2

3

8

8

8

14

4

8

Minutesper

streamer

189

175

36

22

4

16

9

3

14

16

13

14

2

3

14

13

11

17

11

13

Note: *includes sites like YouTube and MTVSource: comScore Video Metrix, provided to eMarketer, July 14, 2009

105643 www.eMarketer.com

US Online Video Streams, by Content Category, June2008 & April 2009 (millions and % change)

June 2008

April 2009

% change

Entertainment 2,445 9,348 282%

-Multimedia* 1,545 7,914 412%

-TV 361 536 49%

-Kids 324 424 31%

-Entertainment--music 191 140 -27%

-Entertainment--movies 55 84 52%

-Humor 31 86 179%

-Entertainment--news 23 35 51%

-Radio 106 31 -71%

Portals 1,123 784 -30%

News/information 300 513 71%

-General news 221 449 103%

-Weather 24 17 -28%

Conversational media 538 469 -13%

-Social networking 534 452 -15%

Community 303 355 71%

-Family and parenting 256 240 -6%

Sports 155 170 9%

Retail 125 122 -2%

Note: *includes sites like YouTube and MTVSource: comScore Video Metrix, September 2008 and July 2009; eMarketercalculations, July 2009

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Online Video Content Landscape

Humor grew by an even larger factor, showing that the online videoefforts of venues such as The Onion, CollegeHumor and ComedyCentral are resonating with viewers.The music category, however,fell by a sizable margin, likely a casualty of recent battles betweensome music labels and YouTube over availability of content.

“On the Internet nobody controlsdistribution. Combine that with the factthat the cost of content creation hasdropped dramatically and you have amedium that is no longer controlled by aselect few, but is open to anybody whowants to participate in it.” —Erick Hachenburg,CEO, Metacafe, in an interview with eMarketer, July 2009

Another category that showed steep growth was news/information.Given the important role that online video played in recent mediaevents—such as Michael Jackson’s death and memorial—it is logicalthat the news category would see a big bump.Underscoring thatpoint, the 71% growth in this genre was driven entirely by “generalnews,”not by the “other”subcategory (e.g.,weather).

For more information on how online video played a role inmedia coverage of Michael Jackson’s memorial, click here.

The January 20,2009,presidential inauguration accounted for a hugespike in online video traffic and streams.Between noon and 1pm onthe day of the event, the number of unique viewers of online videoacross the Web surged by 45% compared with the previous week,according to Nielsen.And the numbers of viewers who witnessedthe inauguration on the top three cable news sites—MSNBC.com,CNN.com and FoxNews.com—rose by a staggering 1,390%.101267

Nielsen also reported that the number of total minutes spentwatching online video increased by 129% during the inauguration—surely an indication of viewers tuning in to long portions of theprogram. It probably helped the inauguration’s online video statsthat the ceremony took place in the middle of a workday.This typeof scheduling has also driven online viewing traffic for sportingevents such as the NCAA March Madness basketball games.

“People want to stay connected with what’sgoing on while they’re at work, and thisrealm of online video is just the perfectoffering.We definitely see a lunchtimebump in visitors. People are spending thathalf an hour to catch up on the news or theirfavorite show.” —Thomas Dodson, product manager,OVGuide.com, in an interview with eMarketer, July 2009

A Nielsen study of viewing trends showed that the number of videostreams increased by 34% in June 2009 over the previous year.Unique viewers, average streams per viewer and average timespent per viewer also grew substantially. From these figures, onecan extrapolate that the average stream duration was 2.5 minutesin June 2009, up from 2 minutes in Nielsen’s April 2008 survey.

105562

US Unique Viewers on the Top Three Cable NewsSites* on Inauguration Day, January 2009 (thousandsand % change vs. prior week)

January 13, 2009

January 20, 2009

% change

Top three cable news sites* 277 4,138 1,390%

Total US Internet 8,945 13,004 45%

Note: between 12pm-1pm EST; home, work and university locations;*MSNBC.com, CNN.com and FoxNews.comSource: comScore Video Metrix as cited in press release, January 27, 2009

101267 www.eMarketer.com

US Online Video Viewer Metrics, June 2009June 2009

% change*

Unique viewers (thousands) 134,310 12.7%

Total streams (thousands) 10,081,824 33.9%

Average streams per viewer 75.1 19.0%

Average time spent per viewer (minutes) 188.8 36.9%

Note: includes progressive downloads and excludes video advertising; *vs.prior yearSource: Nielsen Online, "VideoCensus" as cited in press release, July 14,2009

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Nielsen tracked viewing of network TV shows online and foundthat ABC’s “Lost” led in unique viewers in December 2008—avalidation of how the Internet can supplement broadcast TV. In thecase of “Lost,” the show was off the air in December, but the newseason launched in January 2009, so the spike was most likelyviewers catching up on past episodes. “Lost” was followed byNBC’s “Saturday Night Live” and ABC’s “Grey’s Anatomy.”

101708

While a ranking of shows by unique online viewers is a strongbarometer of the reach of those programs, advertisers are alsointerested in how much time people spend viewing shows. By thatyardstick, the CW’s “Privileged” was the top show in December2008, followed by NBC’s “Chuck” and “Lipstick Jungle.” Notably, nota single TV show appeared on both the top-unique-viewer listabove and the top 10 list for time spent, illustrating the importanceof multiple metrics when evaluating a program’s appeal toaudiences and advertisers.

101710

It should also be noted that Nielsen’s TV show rankings werelimited to viewing on the Websites of the ABC, CBS, CW, FOX andNBC networks, and counted unique viewers as those who viewedfull or partial episodes.The rankings did not include Hulu.

“While the online popularity of some shows,like ‘Grey’s Anatomy,’ suggests that somepeople are using the Internet to catch up onprograms they usually watch on television,the online popularity of other programs, like‘Saturday Night Live,’ indicates that there isa Web audience that might otherwise notwatch these programs at all. These viewersare driven by a morning-after water coolereffect.” —Jon Gibs,VP of media analytics, NielsenOnline, in a press release, February 12, 2009

Top 10 US Broadcast TV Network EntertainmentPrograms Viewed Online, Ranked by Unique Viewers,December 2008 (thousands)

1. Lost (ABC) 1,425

2. Saturday Night Live (NBC) 1,111

3. Grey's Anatomy (ABC) 879

4. Desperate Housewives (ABC) 723

5. Heroes (NBC) 685

6. Ugly Betty (ABC) 631

7. Samantha Who? (ABC) 560

8. Scrubs (ABC) 519

9. Survivor (CBS) 496

10. True Beauty (ABC) 462

Note: reflects video content on ABC.com, CBS Television, CWTV.com, FOXBroadcasting and NBC.com, including their respective embedded videoplayers; programs are client-definedSource: Nielsen Online, "VideoCensus" as cited in press release, February12, 2009

101708 www.eMarketer.com

Top 10 US Broadcast TV Network EntertainmentPrograms Viewed Online, Ranked by Time Spent,December 2008

Average minutes per

viewer

Unique viewers

(thousands)

1. Privileged (CW) 214.6 29

2. Chuck (NBC) 162.5 226

3. Lipstick Jungle (NBC) 153.2 152

4. Gossip Girl (CW) 140.0 165

5. The Simpsons (FOX) 138.8 41

6. Life (NBC) 137.4 133

7. Kitchen Nightmares (FOX) 124.9 40

8. Private Practice (ABC) 123.1 350

9. The Young and the Restless (CBS) 115.6 323

10. The Office (NBC) 111.8 374

Note: reflects video content on ABC.com, CBS Television, CWTV.com, FOXBroadcasting and NBC.com, including their respective embedded videoplayers; programs are client-definedSource: Nielsen Online, "VideoCensus" as cited in press release, February12, 2009

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Monetizing Online Video

Perhaps the most frequently asked question about

online video is:“How is it being monetized?”

The answer depends on the type of video. Some genres—such aslive sports and feature films—are monetized mostly throughdirect transactions with consumers. Entities such as MLB.com andApple’s iTunes derive significant revenues from subscription anddownload fees for premium content. Consumers in thoseindustries seem willing to pay for this content, so the modelseems to be working well for all parties.

Elsewhere in the online video spectrum, ad-based monetization isthe norm. Following a period in which TV program ownersexperimented with transactional approaches for episodic content,Hulu has effectively imposed a new ad-supported model on thistype of long-form, premium programming.

“Things have gone beyond the horse-kicking-the-beaver-in-the-teeth clips that startedYouTube and other viral content sites.A lotof what drives businesses is: ‘Where are theadvertising dollars going?’ They’re going tothe longer-form content, which gives peopleadded motivation to put out that type ofcontent.” —Thomas Dodson, product manager,OVGuide.com, in an interview with eMarketer, July 2009

The same occurred with online video content on news and mediaoutlets. Up until a few years ago, media companies charged a feefor accessing video content on their Websites.Today, virtually allbroadcast, cable and print news outlets offer free video online,supported by prerolls, banners, overlays and other types of ads.

“As high-speed broadband penetrationincreases and more and more people watchvideos online, increasing scale will giveadvertisers the impetus to put more of theirbudget against online video.” —Jean-Paul Colaco,senior VP of advertising,Hulu, in an interview with eMarketer,June 2009

On the whole, the online video industry is expected to tilt towardad-supported funding, according to a BMO Capital Markets study.It estimated that in 2009, US paid online video content revenuesmake up 23.7% of total online video spending (the total includesadvertising revenues). By 2011, paid content will make up only16.1% of the total.

100103

On the transactional side, the dollars spent on online video makeup a small fraction of the total. The NPD Group reported that only3% of consumer spending on home video consisted of digitaldownloads and online streaming in 2009.

103799

US Paid Online Video Content Revenues, 2008-2011 (%of total online video spending*)

2008 28.4%

2009 23.7%

2010 17.4%

2011 16.1%

Note: includes a la carte and subscription models; *includes ad spendingand paid contentSource: BMO Capital Markets, "eMerging Video Markets: The Third Wave ofMedia," provided to eMarketer, June 2008

100103 www.eMarketer.com

US Consumer Spending on Home Video, by Format,2009 (% of total)

DVD purchases 63%

DVD/Blu-ray rentals* 18%

Video-on-demand (VOD) 9%

Blu-ray purchases 7%

Digital downloads and online streaming 3%

Note: average spending per month; *from retail stores, subscriptions orkiosksSource: The NPD Group, "Entertainment Trends in America" as cited inpress release, May 12, 2009

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Top Video Sites

One of the most significant developments in online

video over the past year has been the success of

Hulu.The site has become synonymous with TV

viewing online, much as YouTube epitomizes the

user-generated space.

In April 2009, Hulu’s stream count was up 490% over the previousyear, according to Nielsen.That put Hulu in the No. 2 slot behindYouTube, as ranked by total streams.

104092

YouTube remains by far the biggest online video site, and theundisputed leader in the user-generated category. Nielsenestimated that YouTube served more than 5.4 billion streams inApril 2009—a 35.5% increase over the previous year. Its share ofstreams stood at nearly 58.1%.

comScore showed a higher video count for Google sites in April2009, possibly a result of including Google Video as well asYouTube in its ranking. However, comScore calculated Googlesites’ stream share at 40.7%—significantly lower than Nielsen’sestimate. It is possible that comScore’s inclusion of universitylocations added content from college-oriented sites not trackedby Nielsen, thereby affecting the percentage shares.

104596

YouTube also leads in unique viewers, according to comScore’sApril 2009 figures. Google sites—which include YouTube andGoogle Video—attracted almost 108 million unique viewers,nearly double the total of Fox Interactive Media properties (parentcompany of MySpace) and nearly triple that of Hulu.

104599

Top 10 US Web Brands, Ranked by Total VideoStreams, April 2009

1. YouTube

2. Hulu

3. Yahoo!

4. Fox Interactive Media

5. Nickelodeon Kids and FamilyNetwork

6. MSN/Windows Live

7. ABC.com

8. MTV Networks Music

9. Turner Sports andEntertainment Digital

10. CNN Digital Network

Overall online video usage

Totalstreams

(millions)

5,490.2

373.3

203.6

201.4

175.9

164.4

148.8

143.4

130.6

112.5

9,453.0

% changevs. priormonth

0.2%

7.1%

-12.2%

-3.0%

-10.3%

-2.7%

-15.9%

15.7%

-5.1%

8.7%

-2.3%

% changevs. prior

year

35.5%

490.4%

-8.1%

-38.8%

15.9%

9.8%

144.8%

359.6%

60.0%

32.7%

24.2%

Shareof

streams

58.1%

3.9%

2.2%

2.1%

1.9%

1.7%

1.6%

1.5%

1.4%

1.2%

100.0%

Note: home and work locations; includes progressive downloads butexcludes video advertisingSource: Nielsen Online, "VideoCensus" as cited in press release, May 14,2009

104092 www.eMarketer.com

Top 10 Online Video Properties Among US InternetUsers, Ranked by Videos Viewed, April 2009 (millionsand % of total)

Videos viewed

% share

1. Google sites 6,832.0 40.7%

2. Fox Interactive Media 512.9 3.1%

3. Hulu 397.0 2.4%

4. Yahoo! sites 355.2 2.1%

5. Viacom Digital 315.2 1.9%

6. Microsoft sites 288.3 1.7%

7. Turner Network 272.7 1.6%

8. CBS Interactive 202.8 1.2%

9. Disney Online 132.2 0.8%

10. AOL 121.4 0.7%

Total Internet 16,785.4 100.0%

Note: home, work and university locations; includes both streaming andprogressive download video; excludes video server networksSource: comScore Video Metrix as cited in press release, June 4, 2009

104596 www.eMarketer.com

Top 10 Online Video Properties Among US InternetUsers, Ranked by Unique Viewers, April 2009 (millionsand average videos per viewer)

Unique viewers

Average videos per

viewer

1. Google sites 107.9 63.3

2. Fox Interactive Media 58.8 8.7

3. Yahoo! sites 45.4 7.8

4. Hulu 40.1 9.9

5. CBS Interactive 37.1 5.5

6. Viacom Digital 34.6 9.1

7. Turner Network 34.2 8.0

8. Microsoft sites 32.0 9.0

9. AOL 23.7 5.1

10. Facebook 13.3 3.3

Total Internet 151.7 110.7

Note: home, work and university locations; includes both streaming andprogressive download video; excludes video server networksSource: comScore Video Metrix as cited in press release, June 4, 2009

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Top Video Sites

As measured by time spent viewing,YouTube also came out on topin a Nielsen survey of US Internet users ages 35 to 49.These viewersspent more than 2.9 billion minutes on YouTube in April 2009,compared with 933 million minutes on Hulu. However, in terms ofgrowth, Hulu scored highest in the ranking, increasing its minutecount by more than 150% in April 2009 over November 2008.

104095

Hulu viewers in every other age category also increased theiraverage viewing time on the site, according to Nielsen.The groupswith the biggest gains were those over age 35, with the largestpercentage increase among seniors.

104097

Future Trends

The growth of online video in the US will be fueled

by convergent trends in technology development,

content availability and consumer behavior.

MobileWith an installed base of video-capable smartphones in the tens ofmillions of units, the US seems poised for a surge in mobile video.

One of the key drivers to growth in mobile video is the capability tostream video live in browsers, as the iPhone 3GS does.This featureallows people to use their smartphones the way they might usethe Web without relying on a specific relationship between thecontent owner, device manufacturer and mobile carrier.

MonetizationOne of the ripple effects of the emergence of Hulu has been asense of clarity in the monetization of online video. Contrary to afew years ago, when content owners experimented withtransactional models for news videos and episodic TV contentonline, those genres are now firmly in the ad-supported camp.Atthe same time, feature films and live sports are funded mostlythrough fee-based systems.

However, both Hulu and YouTube have publicly stated their desireto experiment with transactional approaches, and newsorganizations have also sent signals that they intend to chargecustomers for some content that is currently free.Also, Internetservice providers are testing metered-bandwidth plans that wouldimpose fees on the heaviest users of online video—the mostbandwidth-intensive form of digital content.

If these experiments are deployed without regard to potentialconsumer backlash, they could threaten the growth of onlinevideo. On the other hand, if Web video and news portals are smartabout how they monetize their content—for example, imposingsmall fees for only ultrapremium video—they will likely generatenew revenue streams without alienating their customers.

Top Five Online Video Sites Among US Internet UsersAges 35-49, Ranked by Time Spent Viewing, November2008 & April 2009 (millions of minutes)

November 2008

Site

1. YouTube

2. Hulu

3. Megavideo

4. CNN Digital Network

5. Nickelodeon Kids and FamilyNetwork

Timespent

2,740

372

225

154

143

April 2009

Site

1. YouTube

2. Hulu

3. ABC.com

4. NBC.com

5. CNN Digital Network

Timespent

2,983

933

313

215

187

Note: home and work locationsSource: Nielsen Online, "VideoCensus" as cited in press release, May 14,2009

104095 www.eMarketer.com

Average Time Spent Viewing Video on Hulu by USInternet Users, by Age, November 2008 & April 2009(minutes per viewer and % change)

November 2008

April 2009

% change

2-11 50 122 143%

12-17 78 129 65%

18-24 151 379 151%

25-34 237 353 49%

35-49 164 416 154%

50-64 100 284 184%

65+ 27 151 232%

Note: home and work locationsSource: Nielsen Online, "VideoCensus" as cited in press release, May 14,2009

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Future Trends

QualityA study by MarketingSherpa confirmed the widely held view thatpicture quality is key to the success of online video.Across everyage group surveyed, US consumers ranked it as the mostimportant factor in the adoption of streaming video.

103553

As broadband penetration increases and compression technologyimproves, content owners, site publishers and mobile carriers willbe able to deliver better quality to consumers.

“Now you’re seeing people watchingcontent for longer periods of time, and thereason is that there’s much higher-qualityvideo. We have definitely noticed acorrelation between the quality of thevideo and how long someone watches it.”—Randy Levine, senior VP of business development,iStreamPlanet, in an interview with eMarketer, June 2009

Although HD is not as important to consumers as overall quality,more and more content platforms—including YouTube andiTunes—are upgrading their infrastructure to accommodate HDstreaming and downloading.

These quality improvements will help spur the development ofonline video from a desktop activity to a more immersive experience.

IntegrationTo achieve convergence between online video and traditionalplatforms, technology providers will need to devise better ways tobridge the gap between computers,TVs and cable systems—andcontent owners will need to provide a more seamless flow of content.

A key to this type of technology integration will be cooperationbetween content owners (which are interested in monetizing theircontent on as many platforms as possible) and cable systems(which have a vested interest in preserving the status quo ofsubscription-based viewing on TV sets).

In this regard, alliances between cable provider Comcast andcontent owners CBS and Time Warner are encouraging. On July 14,2009, Comcast and CBS announced a technical trial of a conceptthey are marketing as “On Demand Online.” Essentially, it meansthat Comcast customers participating in the test will be able tostream CBS content on the Web the same way they access itthrough their cable boxes. Earlier, Comcast had announced asimilar arrangement with Time Warner called “TV Everywhere.”

These arrangements point to a future in which content will carryover to all available platforms.As this evolution unfolds, consumerelectronics companies will need to build more connectivity intotheir devices.

InteractivityAnother trend that will fuel the growth of online video is interactivity.The major US sports leagues have experimented with streaminginterfaces that allow users to choose among different cameraangles and view multiple games simultaneously on split screens.

These types of made-for-the-Web features are likely to emerge asa differentiator for online video providers. Consumers haveresponded well to interactivity, and a survey of US marketers byPermissionTV ranked interactive video experiences as the topfuture trend in online video.

100585

Important Factors in Adoption of Streaming VideoAccording to US Consumers, by Age, September 2008(% of respondents)

Quality of picture

Speed of download/streaming

Lack of interruptions

Ease of watching downloaded video on yourTV screen instead of the computer

Ability to watch HDTV

<26

74%

71%

69%

52%

35%

27-38

77%

73%

70%

65%

47%

39-54

72%

69%

65%

54%

43%

55+

67%

60%

56%

47%

41%

Note: n=1,083Source: MarketingSherpa, "2009 Media Consumption Survey," November2008 as cited in "Marketing With Video Report: Online, TV & Mobile,"December 2008

103553 www.eMarketer.com

Next Trend for Online Video According to USMarketers, 2008 (% of respondents)

Interactive video experiences 59.6%

Mobile video 49.9%

Internet-enabled TV (i.e., IPTV) 45.8%

HD-quality delivery online 40.2%

Multiscreen video (i.e., PC, TV, mobile) 38.3%

Other 4.1%

Source: PermissionTV, "Online Video Survey Results," December 17, 2008

100585 www.eMarketer.com

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Conclusions

Online video is on a roll,and its future looks as bright

as its recent past.Continued success is by no means

a guarantee,however,so to keep the medium on a

growth trajectory, industry leaders will need to keep

the following priorities in the foreground.

Preserve—and extend—current monetization models.After a period of experimentation in the early days of Web video,monetization vehicles have reached a state of equilibrium. Mostcontent is funded through ad-based models, with the exception oflive sports and feature films. If content owners or site publishersstray too far from these parameters, they threaten to derail thecourse of online video. Instead, the industry should focus onincreasing content availability and nurturing existing revenuestreams.That means more premium, ad-supported content onHulu,YouTube and other portals. It also means expanded effortsby Hollywood and the major sports leagues to make more of theircontent available on the transactional models they have socarefully nurtured.

Live by the precept that content is king. The Web has createdan environment in which content distribution is as simple aspressing a “forward” button.This means that content owners, notdistributors, are in the driver’s seat.To maximize marketopportunities, content owners need to reach their audiences onall existing platforms—broadcast, cable, the Web and mobilenetworks. Consumers will expect no less than total availability,whether in the home, on the Web or on the go.

Work together to grow audiences and attract marketers.Content owners, cable companies, site publishers and technologyproviders have different—often conflicting—priorities, but theyshare a common interest in growing their audiences andexpanding opportunities for brand marketers. Companies acrossthe online video spectrum will need to continue seeking ways toleverage each other’s strengths, as Comcast,Time Warner andCBS have begun doing. More experimentation is in order, with theultimate goal of delivering a seamless, compelling online videoexperience to the consumer.

Endnotes

Endnote numbers correspond to the unique

six-digit identifier in the lower left-hand corner

of each chart. The charts from the report are

repeated before their respective endnotes.

105369 |105370

105369

105370

Extended Note: eMarketer defines an Internet user as a personof any age who uses the Internet from any location at least onceper month. Population estimates used to calculate penetrationrate are based on US Census Bureau data.

105642

105642

Extended Note: comScore includes both streaming andprogressive download video; excludes video server networks.eMarketer defines online video viewers as individuals whodownload or stream video at least once per month. Nielsenincludes progressive downloads but excludes video advertising.

Citation: comScore Video Metrix as cited in press release, June 4,2009; Nielsen Online, "VideoCensus" as cited in press release, June11, 2009.

Key eMarketer Numbers — Video Content

188 million US online video viewers in 2013, up from 144million in 2009

85% % of US Internet users who will be online videoviewers in 2013, up from 72% in 2009

59% % of US population who will be online videoviewers in 2013, up from 47% in 2009

Note: individuals who download or stream video at least once permonthSource: eMarketer, July 2009

US Online Video Viewers and Penetration, 2008-20132008 2009 2010 2011 2012 2013

Online video viewers (millions) 135 144 154 165 177 188

% of Internet users 70% 72% 75% 78% 82% 85%

% of population 44% 47% 50% 53% 56% 59%

Note: individuals who download or stream video at least once per monthSource: eMarketer, July 2009

105370 www.eMarketer.com

Comparative Estimates: US Online Video Viewers,2009 (millions)

comScore Inc.*, June 2009 151.7

eMarketer, July 2009 144.0

Nielsen Online**, June 2009 133.8

Note: *home, work and university locations; data for April 2009; **data forMay 2009Source: eMarketer, July 2009; various, as noted, June 2009

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Related Information and Links

Related LinksBreak.comhttp://www.break.com/

comScorehttp://www.comscore.com/

Huluhttp://www.hulu.com/

iStreamPlanethttp://www.istreamplanet.com/

Metacafehttp://www.metacafe.com/

Nielsenhttp://www.nielsen.com/

OpenBox Technologieshttp://sesamevault.com/

OVGuidehttp://www.ovguide.com/

YouTubehttp://www.youtube.com/

YuMehttp://www.yume.com/

ContacteMarketer, Inc. Toll-Free: 800-405-084475 Broad Street Outside the US: 212-763-601032nd floor Fax: 212-763-6020New York, NY 10004 [email protected]

Report ContributorsSusan Reiter Managing EditorJoanne DiCamillo Production ArtistAmanda Green Staff WriterDana Hill Production ArtistJared Jenks Numbers EditorChris Keating Senior ResearcherJames Ku Data Entry Associate

and Production ArtistNicole Perrin Copy EditorAllison Smith Senior Editor

About eMarketer

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