Q1 2019 Digital Video Trends

Executive Summary

This is the latest installment in an ongoing series of quarterly video ecosystem overviews focusing on monetization, audience, platforms and content. On the radar this quarter: Streaming services debuting over the next year could shake up established players.

How are US digital video and TV ad spending doing?

Video and TV ad spending are both outperforming our expectations. We raised our forecast of video spending based on strength across the ecosystem—from mobile to connected TV to social media, and more. And TV ad spending closed 2018 with a net gain, contrary to our previous expectations of a slight loss. This was mainly the result of increased political ad spending from the US midterm elections.

How many US video viewers are there, and how many of them watch live streams?

There are an estimated 235.1 million video viewers, or 82.8% of internet users. Just over half of them watch live streaming video on platforms including linear OTT services, sports, live events, social media and news publisher streams. The number of live video viewers is growing at a faster rate than video viewers overall.

Which tech company and media giant announced new streaming services?

Amazon launched Freedive, an ad-supported streaming service through its IMDb division. NBCUniversal announced it would debut a direct-to-consumer streaming service in early 2020, and that the service would be free to pay TV subscribers but cost around $12 per month for cord-cutters and cord-nevers.

How much is Netflix spending on original and licensed content?

The streaming giant is expected to spend $15.1 billion on content in 2019, and $17.8 billion in 2020. These expenditures are calculated on a cash basis—before Netflix writes off the cost of original productions. In 2018, the cash costs were roughly 50% higher than the post-writeoff, or P&L, costs.

WHAT’S IN THIS REPORT? This report covers key events in the digital video industry based on data, trends and business activity in Q1 2019.

KEY STAT: US digital video ad spending will reach $58.39 billion in 2023, growing at double-digit percentages for almost the whole forecast period. The dollar amounts for every year in the forecast are higher than we’d previously anticipated.

To refer to the last report in this series, see “Q4 2018 Digital Video Trends: As Consumers Increase Time Spent with Video, More Ad Spending Goes Through Programmatic.”