Note: Effective with June 2009 data reporting, Nielsen has made several enhancements to the VideoCensus service, including a panel that is 8 times larger, more granular reporting and improved accuracy and representativeness. These enhancements provide the highest quality data to our clients and the marketplace. For some sites, trending of previously-reported data with current results may show percentage differences attributable to these product enhancements and should only be compared directionally.

VideoCensus Methodology and Metrics:
Nielsen Online’s VideoCensus combines patented panel and census research methodologies to provide an accurate count of viewing activity and engagement along with in-depth demographic reporting. Online video viewing is tracked according to video player, which can be used on site or embedded elsewhere on the Web. For example, if a “Saturday Night Live” clip from NBC.com is embedded on a personal blog, that video would be attributed to NBC because of the NBC video player.

A unique viewer is anyone who viewed a full episode, part of an episode or a program clip during the month. A stream is a program segment. VideoCensus measurement does not include video advertising.

Source: The Nielsen Company

Video Viewing on Facebook Continues to Grow
During the last year, Facebook’s online video viewing audience has experienced tremendous growth. Year-over-year, total time spent viewing video on Facebook increased 1,840 percent, from 34.9 million minutes in October 2008 to 677.0 million in October 2009. The number of unique viewers of video increased 548 percent and total streams grew 987 percent during the same time period.

“Facebook’s rapid growth in online video during the last year illustrates the site’s evolution from simply a communications focused tool to a media portal,” remarked Gibs. “Social networking sites are evolving from a venue for catching up with friends to a platform for personal expression, allowing consumers to share their experiences in the full variety of content formats available online.”
 

Source: The Nielsen Company

FCC Chairman Julius Genachowski laid out his priorities for the wireless industry at the CTIA IT event last Wednesday. He wants to:

• Bring more spectrum to market to handle rapidly increasing demand for wireless data
• Remove red tape to allow wireless carriers to expand networks faster
• Conduct the regulatory process at the FCC more openly and on a fact-based, data-driven basis
• Codify and enforce net neutrality with special considerations to wireless

I am sure the wireless industry is welcoming the first three priorities of the new Chairman. They represent a welcome and overdue recognition of the situation we are in – more than 270 million American wireless subscribers and more than 42 million of them using smartphones to access the Internet. While the discussion continues about the need for the codification of net neutrality for wireless, it is very encouraging that Chairman Genachowski has recognized that wireless networks deserve special consideration.

Some examples:

1. Wireless data networks that are available to most Americans have only modest throughput.
   Today’s technology allows CDMA network operators (Verizon Wireless and Sprint) to provide a theoretical maximum throughput of 2.4 to 3.1 Mbit/sec and UMTS carriers (AT&T and T-Mobile) a combined theoretical maximum of 3.6 Mbit/sec. For simplicity sake, let’s assume the throughput of a particular cell site sector to be 3.6 Mbit/sec. This theoretical maximum is achievable if only one person uses the cell sector and is standing next to the antenna. The farther the person is from the tower or the more mitigating circumstances there are in between, ranging from interference from other sectors to mundane circumstances like leaves on trees, the less throughput available to an individual.
2. Wireless networks are a shared resource.
   The throughput is shared among all people actively using the network at any point in time.
3. Adding capacity is not always possible due to limited spectrum availability.
   Unlike wireline, where you can always put another fiber cable in the ground or light up another strand of fiber already laid, wireless service providers can’t manufacture more spectrum.

For most applications this does not pose insurmountable problems because a subscriber uses the bandwidth for only a short period of time, the duration of a call or while loading a web page. Such usage patterns are easily sustainable on current networks and are generally described as “bursty” traffic.

Complications start when we move from bursty traffic to streaming. With streaming, a constant amount of throughput is needed by the subscriber to maintain the connection and enjoy a satisfactory quality of service. The constant throughput cannot be used by anyone else. Streaming audio from an application like Pandora or Rhapsody typically uses about 40 kb/sec and can support around 90 concurrent users (a theoretical best case scenario of 3.6 Mbit/second divided by 40 kb/sec) in a cell sector. Wireless carriers allow and even sell streaming audio, which would indicate that there are significantly fewer than 90 concurrent listeners in a cell sector.

It gets difficult when the mobile subscriber uses streaming video in general and with an uncapped video frame rate in particular. Take the Slingbox, a popular device that lets people watch their home television service away from home on a laptop or mobile device. The quality of the picture depends on the uplink speed from their home Internet provider (between 384 kb/second and up to 10Mb/second) and on the download speed of their wireless carrier., In the best case scenario nine people (3.6Mbit/second divided by 384kbit/second) can watch TV concurrently via their Slingbox, effectively preventing any other activity. Without the ability to manage the amount of throughput allocated to these nine individuals, other mobile users in the sector will be out of luck. Currently, wireless network operators do not throttle data throughput, but this exposes them and consumers to a negatively impacted user experience caused by only a few heavy users. Traffic shaping could safe guard against the general slowdown of the data throughput in a cell sector for every consumer, but negatively impacting the viewing pleasure of nine subscribers to enable all users in the sector to receive service. This dynamic, real-time dance of RF engineering would be a forbidden under a purist net neutrality approach.

Another implication of a purist net neutrality rule that would negatively impact wireless subscribers’ service is if one person uses their wireless modem to power their web server – and yes it has happened.

How big is a cell sector? Anywhere from the size of the city block that houses Madison Square Garden in Manhattan, to the size of Capitol Hill in Washington DC to several square miles of corn fields in rural Nebraska.

Considering the relatively fragile nature of RF networks and the reasonable expectation of a majority of subscribers that they can make and receive calls and download the applications they are paying for, it is only a matter of fairness to the majority of wireless consumers that carriers be permitted to allocate network throughput in a fair and equitable manner among all customers.

What outlook should we have when contemplating the future of mobile video? For content providers, carriers, advertisers and consumers, mobile video is often a glass-half-full / glass-half-empty scenario. Yes, the industry is placing tremendous attention and investment in the medium – but, by comparison its reach is fairly humble. And yes, the possibility for future growth is enormous when we consider content and commerce potential– but, it’s a complicated path to that future.

For some perspective, we turn to Nielsen’s latest Mobile Video Report, which paints the picture either way: It provides affirming insights on mobile video’s best year yet. Nonetheless, it highlights substantial limitations and challenges ahead.

Glass Half-Full – Mobile Video’s Best Year Ever

• Reach, up 70 percent year over year, crossed the 10 million active viewer mark in 2008 and kept going – up to 15.3 million active viewers as of Q2 2009 (that’s roughly 7% of all US mobile subscribers)
• With “All You Can Eat” mobile data packages and increased access to mobile video over the mobile Web, access to mobile video content is more affordable than ever. A subscriber with a data package that includes video now pays $5.73 a month, on average, compared to $8.32 a year ago. Meanwhile, most mobile video viewers today aren’t even paying for a special package, but instead access mobile web through mobile Web access, simplifying the means to mobile video
• Though average subscription cost of mobile video is down, added reach still helped carriers claim a record $308 million in mobile video subscriptions in Q2 2009, up 11% compared to the prior quarter

Glass Half-Empty – Many phones not answering the call

• Half of U.S. mobile subscribers still carry phones that aren’t even capable of viewing video (52%), that’s just a marginal improvement over two years ago (62%). The adoption rate of mobile-video capable phones slowed as the economy weakened
• Among mobile video viewers, satisfaction with the overall experience went down over the last year (74% in Q2 2008 to 65% in Q2 2009). Even more troubling, consumer satisfaction decreased around undeniably improving components such speed, reliability, content, price and general audio and video quality.
• The mobile video audience is churning quickly. Disproportional to year-over-year audience growth, today’s mobile video audience is made up mostly of viewers still in their first year of use (78%). Since its introduction, the adoption rate of mobile video has been governed by a revolving audience of mobile video “testers,” viewers who try out the medium for under a year and then ditch it. Mobile video today still lacks the stickiness it needs for more rapid growth.

A mixed bag for sure, but no matter your take on mobile video, today, it’s hard to deny that a confluence of factors — better devices, faster networks, dedicated programmers, consumer interest – prime the pump for the broader, if bumpy, adoption of the platform. In short, the catalysts for growth are now in place.

A different kind of growth

Perhaps adoption of mobile video may look more like the gradual, linear adoption of DVRs than the exponential growth of portable MP3 players and the similarity wouldn’t be a coincidence. DVRs and mobile video are analogous in their transformational nature: technologies that fundamentally alter the time or place of media consumption. That’s a very distinct evolution from a technology such as the MP3 player, which did not change the time or place of the portable CD player, but simply refined the user experience of that medium – thus the adoption of the MP3 player was a logical adoptive progression for the consumer. The extent to which mobile video asks consumers to fundamentally alter their consumption patterns should not be understated.

Choose (cautious) optimism

At 6.5% penetration, it’s easy to be a pessimist about mobile video, to see the half-empty glass. But after posting its best year yet, after 70% year over year growth, it’s wiser to be a cautious optimist. Mobile video is a transformational technology that will require real changes or additions to the consumer media diet. As such, it may have a long way to go before making a dramatic impact on our media economy. When it does, though – when mobile video adoption further dissolves barriers of video’s time and place – the beneficiaries will be those who participated in its evolution, those who anticipated and planned for this demand.

Share your thoughts below or email me for more on Nielsen’s latest Mobile Video Report nic.covey@nielsen.com.

“Although we have seen the computer and mobile phone screens taking on a significant role, their emergence has not been at the cost of TV viewership,” said Jim O’Hara, President, Media Product Leadership, The Nielsen Company. “The entire media universe is expanding so consumers are choosing to add elements to their media experience, rather than to replace them.” Nielsen data also shows Americans are using DVRs more than ever, watching one hour more of timeshifted TV each month than a year ago. Currently, 30% of homes in the U.S. have DVR devices.

The Simultaneous TV and Internet Experience

Nielsen’s Convergence Research Panel, launched in 2008, provides single source electronic measurement of TV and Internet usage in the same homes. As of June 2009, this panel shows 57% of consumers with Internet access at home watch TV and go online simultaneously at least once a month. On average these consumers spend 2 hours, 39 minutes each month simultaneously using the Internet while also watching TV. Their online experience at home is in front of the television almost a third of the time.

Other Key Facts and Trends

• As Americans continue to watch more TV each year there are also more TVs in each home than people – in 2009 the average U.S. home had only 2.5 people vs 2.86 television sets. 54% of Americans have three or more TV sets in the home. (link to universe estimates)
• Online usage is relatively flat since last year, though more people are viewing video online than ever before. Certain age groups also view online video more than others do – Adults 18-24 watch more than 5 hrs each month vs. Adults 65+ watching just over 1 hr of online video.
• Short form video (such as YouTube clips) still makes up the lion’s share of online video viewing – 83% in May 09 – while name-brand TV network content comprises the majority of mobile video viewing.
• Younger demographics aren’t using the Internet as much as older demographics, yet the growth rate of kids 2-11 online clearly outpaces the overall Internet penetration. The number of kids online has increased 18% compared to 10% growth for the total active Internet universe (P2+).
• Mobile video viewing continues its upward trend, with over 15 million Americans reporting watching mobile video in Q2 2009. This is an increase of 70% versus last year – the largest annual growth to date.

Download Nielsen’s complete Three Screen Report for complete details and methodology.

While it’s great news and great fun for the happy couple, the video also seems to have had a halo effect for troubled singer Chris Brown, whose February assault on then girlfriend Rihanna cloaked the singer in months of negative buzz. (Brown plead guilty and received five years probation and must serve 180 hours of community labor.) The wedding video now has a direct link to buy “Forever,” which, despite being released last year, is now in the iTunes top 10. According to Soundscan “Forever” digital downloads went from under 3,000 (week ending 7/19) to 50,000 (week ending 7/26) and sales of Brown’s album “Exclusive” are up %130 in the last week.

Brown’s own attempt at a viral video, a recently released apology video for the Rihanna “incident” which he calls “inexcusable,” has been viewed more than 2 million times. As BlogPulse shows, July buzz about Brown and “Forever” reach almost as high as blog discussion that occurred around the time of the assault.

Vampire-related sites are drawing audiences on the Web. In June 2009, the official Twilight movie site was the top online vampire-related destination, garnering 553,000 unique visitors who spent an average of two minutes and 45 seconds on the site during the month (the New Moon trailer is a minute and 47 seconds long). Vampire Wars on Facebook and Vampire Wars on Myspace.com ranked No. 2 and No. 3, with 386,000 and 272,000 unique visitors, respectively.

Interestingly, unique visitors to Twilight over-indexed among people between the ages of 25 and 34, despite originally sold as a book series for young adults. Unique visitors 25-34 were nearly twice as likely as the average Web user to visit the site in June. Women are also 44 percent more likely than the average Web users to visit the site.

Advertising for True Blood Steps Outside the Box

When HBO geared up for the second season premiere of True Blood, they hired Digital Kitchen to create an interesting ad campaign that would top the campaign for season one. Digital Kitchen enlisted the help of at least six major brands, from Harley-Davidson to Gillette, to create mock brand ads targeted to vampires. In advance of the new season, HBO increased their online image-based advertising for the show by almost 5,000 month-over-month, displaying 72.3 million online image-based ads in June 2009.

Did all of the advertising create the fervor that HBO was after? While buzz on Twilight eclipsed online discussions surrounding True Blood, there was a surge of conversation after the season two premiere. The number of online mentions nearly tripled the day of the premiere, increasing from .03 percent of all online conversations on the 13th to .07 percent on the 14th, which in turn also helped HBO buzz to increase during the days surrounding the launch of season two.

True Blood Helps Draw Online Video Viewers to HBO’s Site

With the second season premiere of True Blood on June 14, HBO experienced double digit growth month-over-month in unique viewers of video online, total video streams viewed, and time spent viewing video online. Total video streams viewed on HBO increased 299 percent, growing from 1.6 million streams in May 2009 to 6.4 million in June. Unique viewers of video increased 101 percent, while time spent viewing online increased 182 percent month-over-month.

While Twilight and True Blood have sparked a surge in interest around vampires, this is not a new phenomenon, but actually just a renewal of interest in these dark characters. Vampires have been a popular subject of fear and intrigue, from Bram Stoker’s Dracula, to Anne Rice’s Interview with a Vampire, to today’s Edward Cullen of Twilight. While the subject is the same, the avenues for connecting with other fans and staying up to date on what’s new are evolving. While you may have discussed Brad Pitt’s character in Interview over coffee with a friend 15 years ago, today you would share you love of last night’s True Blood episode with friends via Facebook.

Time spent online among children aged 2-11 increased 63 percent in the last five years, from nearly 7 hours in May 2004 to more than 11 hours online in May 2009. Time spent among kids outpaced the increase for the overall population, which grew 36 percent in the last five years

Boys spent 7 percent more time online than girls; while girls viewed 9 percent more Web pages than boys did in May 2009.

Online Parents Keep the Camera Rolling

According to Nielsen’s @Plan Summer 2009 data, 26.3 percent of the online adult population, or 38.2 million, have children 11 years old or younger in the household – a 7 percent increase from Summer 2008. Online adults with children under age 12 in the household were 1.7 times more likely to purchase a digital camcorder.

Jack Spends More Time Viewing Videos than Jill

Online video viewership among 2-11 year olds was split evenly between boys and girls, with 5.1 million boys and 5.2 million girls viewing video online in May

Online video consumption between boys and girls was not so even. In May 2009, boys led in viewing and time spent: consuming 61 percent of video streams among children and comprising 57 percent of the time spent viewing videos.

They might be on the Internet, or gaming or texting… but they could also be be watching live TV, listening to the radio or reading a newspaper. At the annual What Teens Want conference in New York, The Nielsen Company presented How Teens Use Media, which argues once you look past the hype – American teens are not as alien in their media usage as you might expect. Sure, it might sound hip and trendy to suggest they’re too busy texting, Twittering or LOL-ing to be engaged with traditional media, but ultimately, the research proves otherwise.

“The media experience is broadening for all consumers, not just teens,” said Nic Covey, director of insights for The Nielsen Company. “Looking at our research across markets and media, we see that, contrary to popular assumption, teens are actually pretty normal in their usage, and more attentive than most give them credit for.”

The comprehensive report combines insights from Nielsen’s global resources in Television, internet, mobile, gaming, moviegoing, radio, newspaper and advertising research to debunk myths and provide the hard facts around how teens use media.

Key Takeaways

• Teens are NOT abandoning TV for new media: In fact, they watch more TV than ever, up 6% over the past five years in the U.S.
• Teens love the Internet … but spend far less time browsing than adults: Teens spend 11 hours and 32 minutes per month online. Far below the average of 29 hours and 15 minutes.
• Teens watch less online video than most adults, but the ads are highly engaging to them: Teens spend 35% less time watching online video than adults 25-34, but recall ads better when watching TV shows online than they do on television.
• Teens read newspapers, listen to the radio and even like advertising more than most: Teens who recall TV ads are 44% more likely to say they liked the ad.
• Teens play video games, but their tastes aren’t all for the blood-and-guts style games: Just two of their top five most-anticipated games since 2005 have been rated “Mature.”
• Teens’ favorite TV shows, top websites and genre preferences across media are mostly the same as their parents: For U.S. teens, American Idol was the top show in 2008, Google the top website and general dramas are a preferred TV genre for teens around the world.

For additional insights, download a free copy of How Teens Use Media