North America and Europe has consistently made up around 80% of Facebook’s advertising revenues. Both markets have experienced a rapid growth over the past five years. The average advertising revenue per Facebook user (ARPU) has grown six-fold in both North American from $3.30 per quarter in 2012 to over $19.80 in 2016, and four-fold Europe, from $1.45 in 2012 to $5.86 in 2016. In contrast, the value of a TV viewer has remained relatively flat, with a growth of less than 7% in both regions over the five-year period.
One of the factors fuelling this rapid growth is video advertising. In 2014 Facebook announced international launch of auto-play video adverts and began transforming its service into an online video marketing platform for advertisers. Arguably, it has also enabled advertisers to keep track of the effectiveness of their online advertising campaigns much more effectively than traditional TV advertisers. As a proportion, in North America, Facebook’s ARPU has grown from 7% of the value of a TV viewer in 2012 to 40% in 2016. In Europe the growth is greater, with Facebook ARPU growing from a 14% proportion in 2012 to 53% in 2016.
As Facebook continues to invest in video and its ARPUs increase further, it is conceivable that in the near future an average Facebook user will be worth more than an average TV viewer.
As content exits the premium video-on-demand window and enters the first pay window, it is typically removed from TVOD pricing (digital rental) on online stores. This blackout, as its known, can act for anywhere between one and two years, dependent on negotiations between the distributors, first window rights-holders and the stores themselves. This blog post looks at a sample of 2,000 titles which underwent a blackout in the first half of 2016, taken from Ampere's Analytics Service.
Blackout windows are typically at least one year long, reflecting the lowest typical first pay window licensing deals. The data collected suggests a strong correlation between the strength and size of the pay TV market and the average length of the blackout window - titles in markets such as the USA, UK and Japan, with relatively high ARPUs and large subscriber numbers, spend on average between a quarter and half a year longer before returning to online rental than titles in markets in lower ARPU markets such as France, Germany and the Netherlands. There is less of an obvious correlation with premium SVOD - while larger first run deals with major platforms such as Netflix and Amazon will obviously make an impact on blackout lengths, there is little sign of an impact anywhere outside of the USA.
Even within a specific market, there is often a large amount of variance in the strategies and negotiations of different studios, and particularly the larger studios. Taking the USA as an example, studios such as Warner Bros and Fox have shorter windows, in each case closer to a year, while Sony and NBC Universal more typically take 15 months. On the other hand, most Disney titles which were blacked out during the first half of 2016 were still not back during 2017 - suggesting a longer windowing timeframe of between one and a half to two years. Outside of the negotiating power of the major studios, there is more consistency across the independents and smaller studios, which generally broadly sit at around one and a half year windows. Finally, it is notable that even within individual companies, strategies vary considerably by territory - for example, in the UK both Fox and Warner Bros have considerably longer first windows, at around 65 to 70 weeks long.
The changes in the devices people use to watch video content throughout the day reflects both today's greater availability and accessibility of video content as well as the underlying cycle of life as screen-based technology increasingly substitutes other media from the moment we get out of bed to the time we lay down at night.
More than one in four Saudi Arabian internet users frequently use Snapchat to watch video. However, a constantly changing regulatory environment could be a barrier to further success.
There has been a marked change in the number of distinct titles available on Subscription Video On-Demand (SVoD) services during 2016. As the sector continues to mature, the general market trend has been towards refinement and reduction of content libraries, with the majority of platforms showing signs of tailoring and reducing offerings over the year. However, there are exceptions to this, with the most notable being that of Prime Video, Amazon’s on-demand subscription service, which has increased its content quantity by nearly two thirds over the past 12 months.