Internet Video

Game On: Xbox Tops for Non-PC Video

5/21/2012 12:01 AM Eastern

In the small-but-fast-growing multiscreen video
universe, Microsoft’s Xbox 360 game console has become
a rising star to watch.

The Xbox was the top non-PC platform for viewing adsupported
professional digital video content and in the first
quarter of 2012 — beating out iPad,
iPhone and Android devices, according
to ad-management firm FreeWheel.
Xbox captured 28.2% of all non-PC/
Mac video viewing in Q1 2012, versus
the iPad at 27.1%, FreeWheel found.

Given that the Xbox has higher
penetration (26% of all U.S. households,
according to Nielsen) than
iPads (15%) — and combined with
the recent content deals Microsoft
has struck with Comcast, HBO, Epix,
YouTube and others — “it is likely that
Xbox viewing volume will continue to
increase,” FreeWheel said in its Video
Monetization Report – Q1 2012

Microsoft last month expanded its
advertising program for the Xbox 360,
which lets content owners place 15-
and 30-second spots in video content
on the Xbox Live subscription service,
adding ESPN and CBS Interactive’s GameSpot and to
the network. The new ad features were enabled via an Xbox
360 upgrade in December. Its “Xbox Live” subscription service
counts nearly 40 million active members worldwide.

U.S. subscribers to Xbox Live Gold, which costs $60 per
year, spend an average of 84 hours per month on the service,
according to Microsoft. Usage of entertainment apps has more
than doubled year over year in the U.S., and now accounts
for more time spent with Xbox Live than multiplayer gaming.

Still, non-PC/Mac viewing now comprises about 4% of all
professional digital videos viewed, although that’s up from 1%
in Q1 2011, FreeWheel said. Moreover, monetization rates are
lower on Xbox, iPad and other devices: Content viewed on PCs
had nearly one video ad for each video view across all content
lengths, whereas Xbox and iPad are well behind that, at 0.31
and 0.40 video ads per video view, respectively.

“Video-viewing volume on the Xbox and iPad may be on
the rise, but the optimal monetization of these alternative devices
still has room to grow,” FreeWheel said.

Meanwhile, overall first-quarter video ad loads showed no
seasonal dip from Q4 2011, which Free-
Wheel said has historically occurred
because of lower retail advertising volumes
and fewer product introductions
at the beginning of the calendar year.

Another key trend in the first three
months of 2012 was that mid-roll ads
grew at a much faster clip than preroll
ads, increasing in Q1 by 115% vs.
45% year-over-year, respectively, Free-
Wheel said. That indicates that, overall,
additional long-form content is coming
online, and that publishers are making
more mid-roll inventory available, according
to the firm.

“The pre-roll was once considered
the de facto standard for digital video,
but the increase in advertiser usage of
mid-rolls is showing the high value of
ads that live within pods between segments
of professional content,” Free-
Wheel said in the report. Mid-rolls now comprise 23% of all
video ad views, up four percentage points from Q4 2011.

The data in the report is based on ads FreeWheel served on
behalf of its clients. The firm served more than 8.7 billion video
ads in Q1 2012 and made ad decisions for more than 11.6
billion video views.

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