Reaching On Demand: The Rise of VOD

By David Turner (Head of Investment)

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The amount of video content consumed by New Zealanders continues to explode, and with more and more viewers getting access to fibre (and at a lower cost), this will not slow down anytime soon. Video not only offers the most impact of any medium, but it is now being consumed across a massive variety of devices.

However, the challenge for advertisers remains in that there is no true cross-platform measurement tool. In-house proprietary planning tools are more important than ever, and it’s vital we draw on all available market research, and interrogate digital inventory through the use of third-party performance analytics (for example, via Integral Ad Science) to assist us with ensuring our media is reaching the right customers.

Linear television remains the most cost efficient medium of all video platforms, and offers the ability to deliver the fastest, most cost-efficient reach. However, as New Zealanders’ habits change and Video On Demand audiences grow (see figure 1), the importance of running across a combination of these platforms is vital for achieving optimal reach.

Figure 1

TVNZ have been very active in researching the relationship between linear TV and VOD. They have been proactively running a number of studies over the years, showing the ability of VOD to deliver incremental reach on top of linear television. It therefore comes as no surprise that OnDemand now achieves incremental reach above what we have previously seen, and this cannot be ignored (see figure 2).

Figure 2

Another interesting consideration is that the method in which people are watching TVNZ OnDemand has changed significantly. Where once Desktop viewing ruled, this has now tipped in favour of app-based viewing (including connected TVs). In September (the latest available month), TVNZ saw desktop viewing accounting for just 34% of their total streams, while connected TVs & app-based viewing made up the remaining 66%.

We’ve already seen “online-only programming” (such as Love Island UK, the second most streamed show in August) deliver significant audiences without the need to be on linear TV. At present, both TVNZ and MediaWorks still have strong linear audiences, and it’s important they take full advantage of this to promote their VOD offering and stimulate further growth.

The inclusion of premium VOD is now more important than ever, particularly for reach-based video campaigns, and this will only continue into the future.

Date: December 13, 2018