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Online video is going through the roof

Video now accounts for almost half of all time spent on Facebook,” announced Facebook CEO Mark Zuckerberg, during the Q2 earnings call last week.

“Video, in particular, is becoming the primary way that people use our products and express themselves.”

Zuckerberg knows we’ve heard this before, and his infamous “pivot to video” didn’t quite pan out as planned. So he snuck in a mea culpa (almost): 

“I know this is a theme we’ve been talking about for a few years now, but we’ve been executing on this for a while and video has steadily become more important in our products.” 

This time, he just might have a point. 

On the combined Facebook platform, across all forms of video, short-form video like Reels is growing especially quickly. Reels is already the largest contributor to engagement growth on Instagram.

On-demand video, like in Facebook Watch, is also growing quickly and is now growing faster than other types of video or content in the News Feed.

Apparently convinced that this time it’s not a flash in the pan, Zuckerberg also announced, “We’re building a number of new video monetization tools for creators.”

Overall, there’s a lot more to do here, and as it becomes the majority of engagement across our services in the coming years, we’ll continue to focus on this.

Mark Zuckerberg, Facebook CEO

Video is growing across the board

Google’s parent company Alphabet delivered another monster earnings report last week, and its video platform YouTube booked a whopping $7 billion in advertising revenue for the quarter, up 83% YoY.

YouTube is not only a streaming video juggernaut that continues to report mind-bending growth, it is also turning into a key rival to the paid services that dominate the conversation around the future of television. And it has plenty of room to grow.

Steve Kovach, CNBC Technology Editor

Netflix also booked $7.34 billion in revenue during the same period, growing 19.4% from a year ago.

YouTube’s TikTok rival is also growing. Shorts, a short video platform first launched in India, surpassed 15 billion daily views globally, growing 131% compared to the previous quarter.

YouTube’s television viewing is growing faster than ever. Alphabet reported huge growth over the past year in people watching on television sets. 

According to the company, 120 million people watched YouTube on a TV last month, up from 100 million per month last year. 

In other words, YouTube is firmly encroaching on the territories of Netflix (209 million+ subscribers) and Disney+ (103.6 million+ subscribers) in the living room.

YouTube on TV is “the fastest-growing consumer surface that we have,” Philipp Schindler, Google’s chief business officer, said on the company’s earnings call.

Meanwhile, the number of active users of online video in China surpassed 1 billion, and the market value of online video reached 241 billion yuan (US$37.2 billion) in 2020, an increase of 44% on the previous year.

Live streaming remains one of the fastest-growing areas of online video, reaching a market value of 150 billion yuan, an increase of 42% YoY, according to the China Internet Development Report.

The big opportunity for online video is monetising users through commerce, which is already relatively strong but still has plenty of room for growth.

Mark Tanner, MD at Shanghai-based consultancy China Skinny

Online video to lead 2021 global ad-spend growth

Online video advertising will be the fastest-growing digital channel in 2021, rising 26% to $63 billion, estimates Zenith’s Advertising Expenditure Forecasts report.

That’s up more than 6% from the pre-pandemic peak.

The online video landscape continues to transform, fueled by the growth of streaming services and connected TVs.

Benoit Cacheux, Zenith’s global chief digital officer

Social media and online video have eclipsed traditional static display, which is forecast to shrink by 15% this year.

The forecast calls for online video and performance-led eCommerce advertising to add $40 billion, or 11.2%, to global advertising spend, for a total of $669 billion.

Zenith’s latest Advertising Expenditure Forecasts report is available here.

“The global online video platform market is expected to exhibit strong growth during 2021-2026,” according to a recent Research And Markets report.

The shift of consumer viewership from conventional video platforms such as cable television (TV) to OVPs has positively influenced the market growth.

Looking forward, the global online video platform market is expected to grow at a CAGR of around 15% during the forecast period (2021-2026).

Global Online Video Platform Market Report, Research And Markets