Value added service providers (VASP), video content management systems (CMS) and ad network revenues combined are forecast to increase 41 percent in 2009 and 38 percent in 2010.

Paul Palumbo

The top four VASPs are in-banner video advertising platforms including Eyewonder, Eyeblaster, Pointroll and DoubleClick, and as a category generated about $225 million in net revenue in 2008.

The remaining top ten VASPs had a combined revenue estimated at $194 million, and included Brightcove, Tremor Media, BBE, Worldnow, the Platform and Internet Broadcasting.

Video services including transcoding, custom player design and widgets are predicted to grow from 8.5 percent share in 2008 to 10.7 percent in 2010. Video indexing and metadata support is estimated to grow from 3.9 percent share in 2008 to 9.3 percent.

"VASPs are selling an ROI model in 2009, which plays well in a tight economy by focusing on ways to save clients money," said research director Paul A. Palumbo.

"Whether that’s more efficient allocation of marketing spend supporting strategic video publishing online or increasing paid media placement, VASPs are betting with their business models they can deliver better content performance."
 

The report, "Online Video Media Spend: 2003-2010," calculates multiple ad sales components corresponding to annual growth  2003-2010 by avail unit: pre-roll, In-banner video, overlays, in-game, podcast, player display and skins.

Pre-roll inventory rose 12.6 percent in 2008 to 18.75 billion total avails, following a 16.8 percent increase in 2007.

AccuStream says significant changes are happening with pre-roll inventory. Insertion frequency for onsite experiences was capped at 1.5 (content views per avail) on average in 2008, down 13.7 percent from 2007.

It is also predicting 27 percent growth in pre-roll inventory in 2009 and 2010 due to offsite exploitation via syndication and indexing engines that find, categorize, store, package and distribute enhanced professional and semi-professional video.

In-banner video impressions grew by 65 percent in 2008, and accounted for $1.5 billion in gross media spend. Video buys made through rep firms totaled $90 million in 2008. Overlay executions related to video added $37. 6 million.

"RFP velocity remained strong throughout 4th Quarter 2008, and while there are patches of caution, 1st Quarter 2009 closings are performing well," commented research director Paul A. Palumbo. 

"Video spend that followed audiences in 2008 are flowing to people, measurability, allocation efficiency and accountability in ’09. Digital appears positioned to grow through the current economic cycle by attracting more ROI buyers."

Paul A. Palumbo, research director at Accustream, told eMarketer that the 22 billion views was a global figure. User-generated videos on U.S. based Web sites attracted 22 billion views from users worldwide.

Accustream said that user-generated videos had an average of 10, 695 views in 2007. Crackle.com, which focused on category expansion and more professional content, had the highest average number of views of the sites that were measured with 216,596 per video.

Harris Interactive asked U.S. adult Internet users about the types of online video they would like to see more. UGV had the lowest response for almost all demographics. Young adults were most likely to want more user-generated video.

A more detailed picture of UGV viewer demographics came from the "Annual Gadgets survey 2007" by the Pew Internet & American Life Project, which examined active adult users of video-sharing sites where many UGVs are hosted. Pew found that over half of the visitors to these sites were 18 to 29 years old.

A separate Pew study found that more than three-quarters of 18-to-29-year-old Internet users had watched some form of online video in February or March 2007, more than half of 30-to-49-year-old Internet users had viewed online video too.

Close to four out of 10 Internet users 65 and older had also watched online video, revealing that the general online video audience is not comprised of only young people.

Online video viewing is common among Internet users of all ages. Marketing that features user-generated video should still probably focus on young adults in particular.
 

Total user-generated videos published in 2007 reached an estimated 1.2 million, along with 26.5 million related comments.

Accustream found that MySpace TV’s library averaged 36.9 comments per video in 2007, while Metacafe videos received an average of 32.3, followed by YouTube at 25.4.

MySpace TV video received more comments than those on the other sites because of a focus on semi-professional and professional content.

Accustream said that comments could be a useful tool for marketers. "User comments are an indication of content engagement intent and underlying motivation," said Paul A. Palumbo, the company’s research director.

"Comments reflect interactive activity meaningful to brands, publishers and advertisers, particularly as a community’s conversation about video becomes intrinsic to CPM value. Video is visual and visceral," Palumbo said.