THE

VIEWER

EVOLUTION

ANDHOWTHEPREMIUMVIDEOMARKETPLACEHASRESPONDED

H12021

TheFreeWheelU.S.VideoMarketplaceReport

highlightsthechangingdynamicsofhow

enterprise-classcontentownersanddistributors

aremonetizingpremiumdigitalvideocontent.

Thedatasetusedforthisreportisoneofthe

largestavailableontheusageandmonetization

ofprofessional,rights-managedvideocontent

H12021 worldwideandisbasedonaggregatedandanonymizedadvertisingdatacollectedthroughtheFreeWheelplatform.

#FreeWheelVMR

TABLEOF

CONTENTS

INTRODUCTION

4

KEYTAKEAWAYS

5

THE2021VIEWER

6

AdViewsContinuetoGrow

The“BigScreen”

RemainsaTopChoice

EntertainmentGenre&Live

ContentareFrontandCenter

THEINDUSTRYEMBRACES

CONSUMERTRENDS

9

StreamingServices

OvertakeTVEverywhere

ProgrammaticStepsUp

toMeetMarket’sEvolution

Addressability

GainsMomentum

CONCLUSION

13

ABOUTTHEAUTHORS

14

GLOSSARY

15

SOURCES

16

INTRODUCTION

As2021unfolds,theworldischartingapathforwardwiththelessonsof2020solidlyinmind.Inadditiontothepandemic,advancesintechnologyandpoliticalturbulencecontributedtodisruptingandreshapinghowconsumersaccess,consumeandrespondtoentertainmentandinformation.

Whileconsumersadjustedtoanewpaceoflife,thepremiumvideoecosystemtooktheopportunitytoadjust,leaningintodigitalandad-supportedservicestokeepconsumersconnected,entertainedandinformed.

TheTVindustrysawincreasedcontentconsumptionduringstay-at-homeorders,withafocusonstreamingvia“bigscreen”devices.Consumerssoughtnewsandentertainmentcontent,forupdatedinformationandabreakfromrealityrespectively.In2021,thesetrendscontinueasrestrictionsebbandflowandbusinessesandconsumersseektosettleintoa“newnormal.”Theindustryhasrealignedandcontinuestoshifttoaccommodateevolvingviewingbehaviors.

Startingin2020andcontinuingwellinto2021,

moreAmericansarestreamingcontent,with

39%addingstreamingsubscriptionsduringthe

pandemic.1Whileconsumersadaptedtotheirnew

realitywithincreasedvideoconsumptionanda

shifttostreaming,contentprovidersandmarketers

doubleddownonstrategiestoincreasereach,

streamlinetargetingandprovidethebestcontent

librarytokeepupwithdemand.

Duringatimeaseconomicallychallengingasit

wasmentallytaxing,programmerslaunchednew

direct-to-consumer(DTC)offerings.Asviewersadded

subscriptions,freead-supportedstreamingTV

services(FASTs)attractedmorefinancially-conscious

consumers.Atthesametime,marketerssoughtto

reachconsumersmoreeffectivelyandefficiently

usingprogrammaticandaddressableofferings.

4|FREEWHEELVMR|H12021|#FreeWheelVMR ?2021FreeWheel.Allrightsreserved.

KEY

TAKEAWAYS

Streamingservicesaccountfor45%ofadviews,overtakingTVEverywhere(TVE)

Programmaticgainsfurtheradoption,withprogrammatictransactionsrepresenting24%ofpremiumvideoadviews,resultingin84%YOYgrowth

ConnectedTV(CTV)accountsfor60%oftotaladviewswithRokuandFireTVdevicescontinuingtoleadmarketsharewith43%and26%ofCTVviews,respectively

TheentertainmentverticalcontinuestoleadthepremiumTVvideoecosystem,with92%ofadviews

Behavioraltargetingincreasesshareduetoadvancesinaudiencetargetingcapabilities,with60%representingbehavioralsegmentsand40%demo

5|FREEWHEELVMR|H12021|#FreeWheelVMR ?2021FreeWheel.Allrightsreserved.

CHART1

ADVIEWGROWTH

H12020vs.H12021

CLICKTODOWNLOAD

+50%

ADVIEWS

Source:FreeWheelU.S.VideoMarketplaceReportH12021.

TheViewerEvolution.

THE2021VIEWER

Consumerbehaviorshiftedandit’simportantforthepremiumvideoecosystemtounderstandtheseshifts.Notably,CTVisthepreferredwaytoconsumevideo,andentertainmentcontentremainsking.

ADVIEWSCONTINUETOGROW

The?firsthalfof2021hasshownthatviewersarestillstreaming.Therehasbeenashiftinhowpeoplewatch?video?withthegrowthofCTVviewershipand?the?launchofnewstreamingplatformsofferingmoreTV-qualityprogramming.Asaresultofincreasedstreaming,wearealsoseeingadviewscontinuetogrow50%YOY.

6|FREEWHEELVMR|H12021|#FreeWheelVMR ?2021FreeWheel.Allrightsreserved.

THE“BIGSCREEN”

REMAINSATOPCHOICE

CTVremainsatopchoiceforviewerswith60%ofadviews.Thiscomesasnosurpriseasconsumersareoptingtoviewonbiggerscreensandspendingmoretimestreamingcontent.RokuandFireTVdevicescontinuetoleadthemarketwith43%and26%ofCTVviews,respectively.SmartTVmakerscontinuetoinvestintheirnativeappsasaplaytogarnermarketsharefromRokuandAmazon.2

CHART3

ADCOMPOSITIONBYCTVDEVICE

H12021

CLICKTODOWNLOAD

CHART2

ADVIEWCOMPOSITIONBYDEVICE

H12021

CLICKTODOWNLOAD

15%

STBVOD

60%

75%

13%

CTV

MOBILE

onthe“BIGSCREEN”

12%

DESKTOP

Source:FreeWheelU.S.VideoMarketplaceReportH12021.

TheViewerEvolution.

43%

26%

8%

7%

6%

10%

ROKU

FIRETV

SMART

CHROMECAST

GAMING

OTHERS

CONSOLES

TVS

69%

Source:FreeWheelU.S.VideoMarketplaceReportH12021.

TheViewerEvolution.

7|FREEWHEELVMR|H12021|#FreeWheelVMR ?2021FreeWheel.Allrightsreserved.

ENTERTAINMENTGENRE&LIVECONTENTAREFRONTANDCENTER

TheentertainmentverticalcontinuestoleadthepremiumTVvideoecosystem,with92%ofadviews.Asstreamingservicesdoubledownoncontent,therearetwoschoolsofthought:thosewhodiversifyandthosewhospecialize.Forexample,Paramount+andPeacockofferconsumersdiversecontentrangingfromsports,comedies,dramasandmovies.Meanwhile,othersarefocusingonaspecificvertical,suchasWarnerMedia’sapproachtohaveHBOMaxdedicatedtoentertainmentandspinCNNintoitsownservicewithCNN+,launchingin2022.3

CHART4

ADVIEWCOMPOSITIONBYVERTICAL

H12021

CLICKTODOWNLOAD

5%

NEWS

92% 3%

ENTERTAINMENT SPORTS

Source:FreeWheelU.S.VideoMarketplaceReportH12021.

TheViewerEvolution.

SimilartolinearTV,digitalplatformsofferdiversecontenttoappealtoabroaderconsumerbase,with51%ofadviewsdrivenbylive,withlong-formondemandnotfarbehindat37%.Live24/7contentfeedsarethecornerstoneoftheFASTsmodelandhavebecomepopularwithconsumerssincetheyarefree,havealargeofferingofdiversechannels,andhavealimitedadload.Accordingtoarecentconsumersurvey,20%ofrespondentswouldbeinterestedinusingfreeplatformstoreplacetheirpaidsubscriptions.4

CHART5

CONTENTCOMPOSITIONBYFORMAT

H12021

CLICKTODOWNLOAD

37%

FULL-EPISODES

51% 12%

LIVE CLIPS

Source:FreeWheelU.S.VideoMarketplaceReportH12021.

TheViewerEvolution.

8|FREEWHEELVMR|H12021|#FreeWheelVMR ?2021FreeWheel.Allrightsreserved.

THE

INDUSTRY

EMBRACES

CONSUMER

TRENDS

Thepastyearchangedthewaycontentisconsumed,andthepremiumvideoecosystemevolvedbyleaningintoDTCstreamingservices.Withmorestreamingcamemoreopportunitytoincreaseadvertisingeffectivenessthroughadvancedprogrammaticandaddressablesolutions.

9|FREEWHEELVMR|H12021|#FreeWheelVMR ?2021FreeWheel.Allrightsreserved.

STREAMINGSERVICESOVERTAKETVEVERYWHERE

DTCstreamingservicesmakeup45%ofadviewsbydistributionplatform,edgingaheadofTVEwhichheldthemajorityshareversusthesametimeperiodlastyear.Thisgrowthisfedbytheintroductionofnewservicesincluding

Discovery+andParamount+whichwerelaunchedinJanuaryandMarch2021respectively.HBOalsointroducedanad-supportedtierofitsHBOMaxoffering,breakingawayfromitstraditionalcommercial-freeapproach.5Theproliferationof

subscriptionandadvertising-supportedstreamingservicesfurtherperpetuatesthecomplexityandfragmentationofviewingchoices,forboththeconsumerandtheadvertiser.

CHART6

SHAREOFADVIEWSBYDISTRIBUTIONPLATFORM

H12021

CLICKTODOWNLOAD

45%

STREAMING

SERVICES

36%

TVE

15%

STBVOD

4%

vMVPD

Source:FreeWheelU.S.VideoMarketplaceReportH12021.TheViewerEvolution.

CHART7

SHAREOFPREMIUMSVODSUBSCRIPTIONS6

CLICKTODOWNLOAD

Q12020vs.Q12021

37%

2020

22%

16%

Q2

8%

6%

5%

4%

NETFLIX

HULU

DISNEY+

HBOMAX

STARZ

PARAMOUNT+

SHOWTIME

29%

2021

19%

17%

Q2

11%

8%

6%

4%

3%

3%

NETFLIX

HULU

DISNEY+HBOMAX

PARAMOUNT+STARZSHOWTIME

DISCOVERY+

PEACOCK

10|FREEWHEELVMR|H12021|#FreeWheelVMR ?2021FreeWheel.Allrightsreserved.

CHART8

ADVIEWSBYTRANSACTIONTYPE

H12021

CLICKTODOWNLOAD

CHART9

PROGRAMMATICADVIEWGROWTHYOY

H12021

PROGRAMMATIC

24%

76%

DIRECT

+84%

YOY

CLICKTODOWNLOAD

Source: FreeWheel U.S. Video Marketplace

Report H1 2021. The Viewer Evolution.

11|FREEWHEELVMR|H12021|#FreeWheelVMR ?2021FreeWheel.Allrightsreserved.

ADDRESSABILITY

GAINSMOMENTUM

Asviewerbehaviorsevolve,advertisers’desiretodeliver

morecustomizedandeffectivelytargetedadexperiences

grows.InJune2021,TVoperatorsintroducedanindustry

initiative,

GoAddressable,

tosimplifyanddriveadoption

ofadvancedaddressableTVadvertising.8Thegoalisto

bettermeettheneedsof92%ofmarketerswhosaythey

areadoptingaudience-basedbuyingtosomedegree,

accordingtoanAdvertisingPerceptionssurvey.9

CHART10

AUDIENCESHAREOF

TARGETEDCAMPAIGNS

H12021

CLICKTODOWNLOAD

40%

DEMO

60%

BEHAVIORAL

Source:FreeWheelU.S.VideoMarketplace

ReportH12021.TheViewerEvolution.

12|FREEWHEELVMR|H12021|#FreeWheelVMR ?2021FreeWheel.Allrightsreserved.

CONCLUSION

Newtechnology,politicaltensionsandaglobalpandemicin2020transformedandacceleratedhowpeopleaccess,consumeandrespondtomediaandadvertisingandwe’veseenthisevolutioncontinueintothefirsthalfof2021.

Advertisers,marketersandtheircontent,distributionandtechnologypartnerscanexpectthechangethatwasspurredin2020andispersistinginto2021tocontinue,ifnotaccelerate.Changingconsumerviewingandbuyingbehaviorwillpushthecontinuedevolutionofdatacapability,accuracyandavailability.

Theindustryisatthebeginningofalong-term,data-drivenevolutionofhowadvertisingandmarketingaredone.Keepingupintheindustrywillrequireafocusonthedatathatprovidesinsightintoviewerbehaviorandwhatimpactsit,andenablesthereach,targetingandreportingthatmarketerscrave.

13|FREEWHEELVMR|H12021|#FreeWheelVMR ?2021FreeWheel.Allrightsreserved.

ABOUTTHE

AUTHORS

JULIAZANGWILL

DirectorinFreeWheel’sGlobalAdvisoryServicesandoverseestheteam’sthoughtleadership.Herareasofexpertiseincludeaddressabilityenablement,monetizationstrategy,andunificationassessment.PriortoFreeWheel,JuliaworkedatViacomMediaNetworksandAMCNetworksinbusinessdevelopment,focusedongrowingadvertisingrevenue.

HANNATRAN

SeniorManagerinFreeWheel’sAdvisoryServicespractice.Herareasofexpertiseincludechangemanagementanalysis,operationstrategy,andscalingoforganizationalcapabilities.PriortoFreeWheel,HannaworkedinthefinancialservicesindustryatGoldmanSachs.

HALEYGLAZER

SeniorConsultantintheAdvisoryServicesteam,workingwithmediaclientstodeliverindustrybenchmarking,networkoptimizationandreportingandanalyticsenhancements.PriortoFreeWheel,sheworkedinadsalesresearchandcorporateanalyticsatScrippsNetworksInteractiveandiHeartMedia,andhasjustcompletedherMaster’sDegreeinDataScience.

GLOSSARY

AdCompletionRate–Measuresthepercentageofadsthatwerecompletedoncestarted

AddressableTV–Theabilitytotargetamessagetoadeviceorindividual.Thosesegmentscouldbematchedormodeledbybehavioral,demographic,andgeographicfactorsfrom1st,2nd,or3rdpartydatasets.

AdView–Occurseachtimeanadisdisplayed

Clip-Videocontentunder10minuteslong

ConnectedTV(CTV)–AtelevisionsetthatisconnectedtotheInternetviaOTTdevices,Blu-rayplayers,streamingboxorstick,andgamingconsoles,orhasbuilt-ininternetcapabilities(i.e.,aSmartTV)andisabletoaccessavarietyoflong-formandshort-formweb-basedcontent

ContentVertical–Contentgenre,e.g.news,entertainment,sports

DealID–Uniquedealidentifierofaprogrammatictransactionthatcanbeusedtomatchadvertisersandpublishersdirectly

Direct-sold–Advertisingdealsmadedirectlybetweenapublisherandanadvertiser

Distributor–Apartyotherthanthecontentrightsownerthatmanagestheplatformuponwhichcontentandadvertisementsaredelivered

DynamicAdInsertion(DAI)–Processofdynamicallyinsertingadsintoacontentstream,suchthatdifferentadscanbeinsertedintothesameadbreak

Linear–Live,adsupportedTVthathasscheduledads.Everyhouseholdthatwatchestheshowatthesametimeseesthesamead.

Longform–Videocontent10minutesorlonger

Mid-roll–Anadbreakthatoccursinthemiddleofcontent

MultichannelVideoProgrammingDistributor(MVPD)–ProvidespayTVservicesdeliveredeitherthroughbroadcastsatelliteorcableTV.ExamplesincludeComcastandVerizon.

Pre-roll–Anadbreakthatoccursbeforecontentstarts

PremiumVideo–Videocontentthatisprofessionallyproduced,rightsmanaged,andlimitedinsupply

Programmatic–Theuseofautomationsoftwareormanagedservicestoexecuteanadvertisingdeal

Publisher–Ownerorlicensorofcontent(contentrightsowner).

Set-topBoxVideoOnDemand

(STBVOD)–Accompaniesacable/broadcast/satellitesetup.ContainsacableinputandoutputstoaTV.

StreamingServices–Adsupported,streamingvideoservicethathaslivefeedsand/orvideoondemand.ExamplesincludePluto,Xumo,Hulu(notHuluLive).

TVEverywhere(TVE)–Servicesthataccompanyacable/satellitesubscription,allowingthecustomertowatchthechannelsintheirpackageanywhere,bothinsideandoutsidethehome,withoutaset-top-box.

VideoView–Accruedafterthefirstframeofvideocontentisdisplayed

VirtualMVPD(vMVPD)–Digital-onlycablealternativesthatofferacce