The paramount importance of digital video to the future of TV and entertainment has become indisputable. New digital-only offerings by TV networks, a dramatic increase of streaming device sales, ever-expanding screen sizes, media conglomerates purchasing digital-first Publishers, and a new generation of platform-agnostic millennial viewers coming of age – all continue to drive advertising dollars to digital channels.

1. VIDEO MONETIZATION
REPORT Q3 2014

2. Ready for its Close-Up
The paramount importance of digital video to the future of TV and
entertainment has become indisputable. New digital-only offerings by TV
networks, a dramatic increase of streaming device sales, ever-expanding
screen sizes, media conglomerates purchasing digital-first Publishers, and
a new generation of platform-agnostic millennial viewers coming of age - all
continue to drive advertising dollars to digital channels.
Meanwhile, digital video Publishers have matured. They are refining their
offerings, developing scalable capabilities, and demonstrating premium
value propositions. After having been touted as an integral part of TV’s
future for some time, it is clear from the behavior of consumers, publishers,
advertisers, and investors that digital television’s time is now.
Executive Summary
“The paramount importance of digital video
to the future of TV and entertaiment has
become indisputable.”
FreeWheel Video Monetization Report Q3 2014 1
The diverse array of viewing platforms evolved significantly this quarter.
Video ad views on smartphones and over-the-top (OTT) devices increased
77% and 208% respectively year-over-year. Whereas desktop and laptop
computers accounted for 86% of video ad views last year, we now see 27%
of monetization coming from smartphone, tablet and OTT environments.
The remarkable growth of OTT devices is particularly critical when one
considers that these devices are overwhelmingly likely to be used by younger
Since last year...
Over-the-Top (OTT) device viewing
has grown 208%
Mid-roll ad break durations are up to an
average of 101 seconds per break
Authenticated ad views have grown
368% accounting for 46% of all
long-form ad views

3. “Wherever you look in digital video, there is
overwhelming evidence that it is rapidly maturing
and growing into its long-awaited role as the future
of television.”
FreeWheel Video Monetization Report Q3 20142
1 Ad and Video View Growth
Q3 2013 vs. Q3 2014
Ad Views Video Views
+23%
+30%
consumers for watching longer, “TV-style” content: 87% of video ad views
on OTT devices came on long-form and live content.
Elsewhere, rumors of TV Everywhere’s imminent demise have proved
to be greatly exaggerated. As Programmers put more content behind
authentication walls, viewers are following in droves: 46% of long-form and
live video ad views now come from authenticated users, up 368% year-
over-year. Authenticated viewing has grown in lock-step with both the rise
in live viewing and OTT devices, now accounting for 56% and 22% of all
authenticated ad views respectively.
The advertising landscape for digital video continues to converge with that of
linear TV. Mid-roll breaks on long-form content averaged 101 seconds in duration
and 4 ads, up from 87 seconds and 3.5 ads in Q3 2013. Publishers are also
working to make the adoption of digital advertising as seamless as possible for ad
buyers by supporting measurement currencies, with 79% of leading Programmer
networks using either Nielsen’s Online Campaign Ratings (OCR) or comScore’s
Validated Campaign Essentials (vCE).
While a 30% growth in video ad views is nothing to sneeze at [see chart 1],
what was truly remarkable about this quarter was the consistency of message:
wherever you look in digital video, there is overwhelming evidence that it is
rapidly maturing and growing into its long-awaited role in the future of television.

4. FreeWheel Video Monetization Report Q3 2014 3
37%
+41%
+33%
YoY
-1%
YoY
Short-form Long-form
and Live
Mid-form
2 Ad View Growth by Content Duration
Q3 2013 vs. Q3 2014
Content
Building industry scale in premium digital video inventory ultimately depends on cultivating a
diverse content mix between:
■■ Short-form (0-5 min.) | video clips, music videos, made-for-web content
■■ Mid-form (5-20 min.) | web series, extended clips, interviews
■■ Long-form (20+ min.) | linear TV shows, live streams, feature films, sporting events
Dual Approach
Video ad views on long-form content grew 41% year-over-year in Q3 2014 [see chart
2]. This strong growth continues a trend we have observed over multiple quarters as
viewers replicate the TV experience in the new digital living room. At the other end
of the spectrum, Publishers are successfully packaging bite-sized clips for digital
platforms as video ad views grew 33% on short-form content. Publishers continue
to grapple with the value proposition of mid-form video, with monetization declining
1% year-over-year.

5. Long-form content continues to account for a majority of all video ad
views for Programmers [see chart 3]. While Digital Pure-Play volume is
still very much driven by video clips and music videos (short-form content
accounts for 83% of their video ad views), long- and mid-form content is
poised to increase share as digital-first Publishers announce plans to use
ad-supported models for original content.
FreeWheel Video Monetization Report Q3 20144
4 Live Ad Views as Share of All Ad Views
Programmers | Q3 2013 vs. Q3 2014
Q3
2014
Q2
2014
Q3
2013
Q4
2013
Q1
2014
+214%
8.6%
21.0%
18.3%
14.4%
9.9%
3 Ad Views by Content Duration
Q3 2014
Programmer
Digital
Pure-Play
Short-form Long-formMid-form
12%
51%
6%
83%37%
11%
Live and Kicking
This was a yet another huge quarter for live viewing. We saw 214%
growth in live video ad views year-over-year, with live accounting for 21%
of all video ad views for Programmers [see chart 4]. Given the cornucopia
of athletic events this quarter, including the tail end of the World Cup and
the early weeks of the NFL season, it comes as no surprise that sports
accounted for the vast majority of live viewing [see chart 5].
5 Ad View Share by Content Type | Live/Simulcast
Q3 2014
Sports
82%
Doc/
Reality
1%
News
11%
Comedy/
Variety
3%
Scripted
Drama
3%
TASTTLIVE/SIMULCALIVE/SIMULCAST

6. FreeWheel Video Monetization Report Q3 2014 5
6 Ad View Share by Content Type | On-Demand
Q3 2014
DEMON-D NDMANDOON-DEMAND
Sports
15%
Doc/
Reality
12%
Music/
Trailer
17%
Comedy/
Variety
9%
Scripted
Drama
13%
News
27% Games
3%
Kids
4%
As live events continue to become synonymous with digital, we expect
Publishers to deploy live offerings as an entry point for new adopters
and as a testing environment for digital viewing; e.g. firing up new
devices and using authentication credentials. With highlights such as the
MLB Playoffs, NCAA Bowl Season, NBA regular season, and mid-term
elections still to come in Q4, we only expect live growth to continue.
Breaking VOD
On-demand viewing was relatively evenly split across content categories
this quarter, with five separate categories each accounting for over
10% of video ad views [see chart 6]. Seasonality patterns in on-demand
viewing appear to mirror those of linear TV, as Scripted Drama and
Comedy/Variety had soft Q3s, accounting for 13% and 9% of video ad
views respectively. Help is on the way, however, in the form of the Fall
TV season. Indeed, in 2013, each of the year’s five highest-rated linear
Dramas and Comedies premiered in the last week of September, and
the two categories went on to account for 20 and 12% of video ad views
in Q4.

7. “Digital-first networks... see a compelling
value proposition around digital viewing
of ‘TV-Style’ content and are successfully
building out their capabilities.”
FreeWheel Video Monetization Report Q3 20146
+64%
Documentary/Reality
Comedy/VarietyScripted Drama
Q3
2014
Q3
2013
12%
5%
2%
16%
6%
6%
7 Ad View Share by Content Type | Digital Pure-Play
Q3 2013 vs. Q3 2014
Further buoying the outlook for “TV-style” content on digital channels
is the trend of Digital Pure-Play Publishers emulating traditional TV
programming strategies. This quarter, 28% of Digital Pure-Play video ad
views came in Scripted Drama, Comedy/Variety, or Documentary/Reality
content categories [see chart 7], an increase of 64% year-over-year.
While digital-first networks do not enjoy the built-in brands, audiences,
and libraries that a linear presence can provide, they see a compelling
value proposition around digital viewing of “TV-style” content and are
successfully building out their capabilities.

8. Device
You Down with OTT?
Over a quarter of monetization in Q3 2014 came outside of desktop
and laptop environments [see chart 8]. While all devices saw double-
digit growth, monetization on smartphones and OTT devices exploded,
growing 77% and 208% year-over-year.
The breakdown of video ad views by device is staggering when compared
to a year ago. In Q3 2013, 8% of monetization came on smartphones,
compared to 14% in 2014. OTT devices were little more than a glimmer
in the eyes of Publishers at 2% of monetization in Q3 2013, growing to
6% this year. The growth of OTT devices marks a new trend in consumer
behavior as shoppers purchase economically-priced devices with the
sole purpose of watching digital video.
OTT Device
6%
+208% YoY
Tablet
7%
+34% YoY
Desktop/Laptop
73%
+20% YoY
Smartphone
14%
+77% YoY
8 Ad Views by Device
Q3 2014
FreeWheel Video Monetization Report Q3 2014 7

9. FreeWheel Video Monetization Report Q3 20148
TV viewing habits continue to be most closely replicated
on tablet and OTT devices, where 57% and 87% of video
ad views come from long-form and live content. Desktop
computers, laptops, and smartphones are used for viewing
shorter content: 70% of desktop computer and laptop
video ad views and 71% of smartphone video ad views are
on content under 20 minutes in duration [see chart 9]. While
these devices vary in size and portability, their similar viewing
habits can be explained by the fact that computers and
smartphones are used to “snack” on content throughout the
workday while tablets and OTT devices tend to live in the
home and are “binge viewing” portals.
9 Ad View Share by Content Duration
Q3 2014
30%
Desktop/
Laptop
Smartphone Tablet OTT Device
29% 57% 87%
70% 71%
43%
13%
< 20 min. 20+ min. and Live
“TV viewing habits continue to be most closely
replicated on tablet and OTT devices.”

10. FreeWheel Video Monetization Report Q3 2014 9
Distribution
Testing the Waters
Video syndication (defined as viewing that occurs outside of a
Publisher’s Owned and Operated properties) has grown in popularity for
Programmers, accounting for 12% of Programmer video ad views this
quarter compared to 10% a year ago [see chart 10]. Just as Digital Pure-
Play Publishers have long leveraged third-party platforms to reach new
audiences (with syndication rates between 45 and 55% in each quarter of
2014), Programmers are dipping their toes in the digital waters in hopes
of capturing additional eyeballs.
Interestingly, Programmers have remained reticent to push their content
to well-known portals: combined, they accounted for 3% of Programmer
video ad views this quarter. Instead, there was tremendous growth in
the usage of MVPD and OTT apps, accounting for 5% of Programmer
monetization this quarter compared to just 2% a year ago.
}}
3%
5%
2%
90%
4%
3%
5%
88%
10 Share of Ad Views by Distribution Platform
Programmers | Q3 2013 vs. Q3 2014
Q3
2013
Q3
2014
MVPD/OTT Owned & Operated
PortalsSyndication Network/Other Web
“Just as Digital Pure-Play Publishers have long
leveraged third-party platforms to reach new
audiences... Programmers are dipping their
toes in the digital waters in hopes of capturing
additional eyeballs.”
10%
of all
ad views
12%
of all
ad views

11. FreeWheel Video Monetization Report Q3 201410
A Less Imposing Wall
Monetization via authenticated viewing (defined as viewing that occurs after viewers enter their MVPD subscription credentials)
grew 368% year-over-year in Q3. The expanded role of authenticated viewing has proved remarkably consistent, maintaining a
growth rate above 200% in each quarter since we began reporting on this metric in Q3 2013. This is reflected in the fact that 46%
of long-form and live monetization came from behind an authentication wall in Q3 2014 [see chart 11], up from just 14% last year.
This quarter marks the first time that we have analyzed the devices that viewers are using to authenticate
and watch digital video. We found that the makeup of devices varied significantly from digital viewing as a
whole; OTT devices accounted for a greater share of authenticated video ad views at 22%, while desktop
and laptop computers (64%) and smartphones (7%) saw lower shares [see chart 12].
11 Authenticated Ad View Rate and Growth
Q3 2013 vs. Q3 2014
+368%
Authenticated
Ad View Growth
46%
Authenticated
Long-form
Ad View Rate
12 Authenticated Ad Views by Device
Q3 2014
Smartphone
7%
OTT Device
22%
Desktop/Laptop
64%
Tablet
7%

12. FreeWheel Video Monetization Report Q3 2014 11
Much of the success that OTT devices have had with authenticated viewing
can be explained by their user experience as well as their customer base. Most
OTT apps require a one-time authentication, often during the registration
phase, and the devices are quite popular with younger, more tech-savvy
consumers. A 2013 NPD Group study noted that 68% of 18- to 34-year-olds
with connected TV sets or devices use them to watch programming from
an MVPD*.
56%
Live
44%
On-Demand
13 Share of Authenticated Viewing
Q3 2014
While in past quarters, we reported that the vast majority of authenticated
viewing occurred on live content (76% of authenticated video ad views were
on live content in Q4 2013), we saw that trend reverse this quarter as 44%
of authenticated video ad views were during on-demand content [see chart
13]. This is additional evidence of live content’s value as an opportunity for
Publishers to capture and train new viewers, reeling them in via “must-have”
live events. Once authenticated, viewers enjoy access to the rich on-demand
libraries that lay behind the wall.
* Source: NPD Group’s Connected Intelligence, September 2014

13. FreeWheel Video Monetization Report Q3 201412
Viewer Experience
Finding the Optimal Ad Break
Another trend that we saw continue in Q3 2014 was the move towards
longer, “TV-style” ad breaks on long-form content. While a year ago, we
noted an average ad break of 87 seconds and 3.5 ads, the average break
grew to 101 seconds and 4 ads this quarter [see chart 14]. While traditional
TV Publishers may have a reputation for being risk-averse, we continue to
observe experimentation and testing in the quest for digital video’s “Holy
Grail”; the optimal ad experience. As Publishers continue to tinker, we expect
to see the digital experience on premium content come even more closely in
line with what viewers are accustomed to on linear TV.
Despite seeing more ads packed into mid-roll breaks, we continue to see
healthy ad completion rates across all content durations [see chart 15]. Not
surprisingly, long-form ad completion rates remain at and above 90%, as
viewers are more committed to the content and tolerant of mid-roll ads. Ad
completion rates on long-form content have not dipped below 90% since we
began reporting this metric. 15- and 30-second spots also maintain relatively
even completion rates, suggesting that viewers will tolerate all creative types
when viewing premium content.
87 seconds (3.5 ads)
2014
Q3
2013
Q3
101 seconds (4.0 ads)
14 Mid-roll Ad Break Duration
Q3 2013 vs. Q3 2014
Short-form Long-formMid-form
15 seconds 30 seconds
71%
90%
74% 76%
92%
78%
15 Ad Completion Rates
Q3 2014

14. FreeWheel Video Monetization Report Q3 2014 13
Advertising
Know Your Audience
The share of Programmer video ad views moving through ad networks and
exchanges dropped this quarter to 4.6% from 4.9% last quarter, and from
4.7% in Q3 2013, bringing the five-quarter average to 5.0% [see chart 16].
While we foresee that networks and exchanges will continue to play a role
in the digital video ecosystem (such as managing for unexpected sales
shortages), we believe that Publishers will continue to limit the amount of
inventory monetized through these channels due to conflicts with direct
sales goals, inabilities to support compliance, and inconsistent fill rates.
Meanwhile, marketers are cautious about buying from these channels due to
fears around quality of inventory, which include content quality, viewability,
traffic fraud, and brand safety on long-tail sites.
Because of the collective concerns of both marketers and publishers, we
are starting to see greater movement toward programmatic reserved deals
(guaranteed deals between the publisher and a brand or agency executing
directly between the DSP and sell-side ad management platform), and a
departure from the use of open exchanges. Publishers, however, still wish to
maintain strict control of their inventory and ensure compliance is maintained.
Another analysis that reflects digital video’s premium positioning is the
adoption of measurement currencies such as Nielsen’s Online Campaign
Ratings (OCR) and comScore’s Validated Campaign Essentials (vCE)
by Publishers. This quarter, we found that 58% of all clients and 79% of
Programmers sold inventory using measurement currencies [see chart 17].
16 Ad Network/Exchange Share of Ad Views
Programmers | Q3 2013 vs. Q3 2014
Q3
2014
Q2
2014
Q3
2013
Q4
2013
Q1
2014
5Q
Average
4.7% 5.0%
6.0%
4.9% 4.6%
5.0%
17 Share of Clients Using Measurement Currency
Q3 2014
All Clients Programmers
58%
79%

15. As digital video currency buys mimic the framework of linear
TV ad sales, the adoption of these currencies only serves
to underline the demand for digital video inventory amongst
traditional TV advertisers. As measurement vendors develop
more sophisticated, scalable offerings (such as providing ratings
on OTT devices), we expect to see these buys account for a
larger share of the market moving forward.
Discerning Clientele
The Consumer Packaged Goods (CPG) advertiser vertical
accounted for 30% of all online video views this quarter: nearly
double any other vertical [see chart 18]. CPG is also the top vertical
for linear TV advertising, according to research by Kantar Media.*
This runs in stark contrast to the rest of the digital advertising
market (e.g. search, display, social) where CPG advertisers only
account for 7% of all ad revenue.** This discrepancy highlights
how advertisers view usage of online video advertising differently
than other formats. Brand building tends to be the central focus for
videoadvertising,whileotherformatsareprimarilyusedfordriving
intent and consideration, and progressing consumers down the
marketing funnel.
Consumer
Packaged
Goods (CPG)
30%
Computing
7%
Auto/Energy/
Manufacturing
11%
Financial
Services
13%
Retail
17%
Other
5%
Telecom
8%
Entertainment/
Media
9%
18 Ad Views by Advertiser Vertical
Q3 2014
** Source: IAB/PwC Internet Ad Revenue Report, HY2014, October 2014
FreeWheel Video Monetization Report Q3 201414
* Source: Kantar Media Network TV Ad Spend by Vertical, January - May 2014

16. FreeWheel Video Monetization Report Q3 2014 15
UK Market Analysis
The Long and Short of It
A trend that has crystallized over the past few quarters is the different
content strategies of Publishers in the US and the UK. As both countries
see differing viewership patterns, Publishers have played to their relative
strengths when monetizing content on both sides of the Atlantic.
American audiences are more accustomed to short-form viewing, and
Publishers in the US monetize short-form content with pre-roll ads at a
much higher rate than their UK counterparts across all devices [see chart
19]. Conversely, Publishers in the UK are far ahead when it comes to
long-form content. The average mid-roll break there is 144 seconds and
5.57 ads, 45% longer than in the US [see chart 20]. Alas, Publishers in
both the US and UK could look to one another for guidance on creating
consumer acceptance of regular pre-rolls and “TV-style” ad breaks.
Desktop/
Laptop
Smartphone Tablet
19 Pre-roll Monetization Rate by Device, UK vs. USA
Short-form Content | Q3 2014
73%
58%
40%
15%
47%
19%
5.57
Ads per
Break
4.00
Ads per
Break
20 Mid-roll Ad Break Duration, UK vs. USA
Long-form Content | Q3 2014
144 seconds
Ad Break Length
101 seconds
Ad Break Length

17. About this Report
FreeWheel’s platform for video ad management and monetization helps
the largest players in the TV industry generate revenue from their ad-
supported content on desktop, mobile, OTT, and traditional STB devices.
The dataset used for this report is one of the largest available on the
usage and monetization of professional, rights managed video content,
and is comprised of over 50 billion video views in the first half of 2014.
The FreeWheel Video Monetization Report is released quarterly and seeks
to highlight the changing dynamics of how enterprise-class content
owners and distributors are monetizing professional digital video content.
As part of this analysis, we group Publishers into two categories:
Programmers:
■■ Includes Programmers and Multichannel Video Programming
Distributors (MVPDs) who generate the majority of their
advertising revenue from linear TV services
■■ Offer diverse content mix on IP-based environments
Digital Pure-Play Publishers:
■■ Generate majority of revenue from IP-based environments
■■ Aggregate third-party content and/or are developing
original content
FreeWheel Video Monetization Report Q3 201416
Summary
Q3 2014 has marked yet another quarter of strong growth and evolution
in the digital TV market, with video ad views growing 30% year-over-year.
In exploring the trends in the digital television industry, we noted the
following key observations:
■■ Live viewing was up 214% year-over-year, driven by significant
growth in sports streaming and news simulcasts.
■■ Monetization continues to move cross-platform, with
27% of video ad views coming outside desktop and
laptop environments.
■■ Authenticated viewing grew 368% year-over-year as 46% of all
video ad views on long-form and live content now come from
behind authentication walls. Authenticated viewing is relatively
evenly split between live and on-demand content.
■■ Viewers are seeing more TV-like ad experiences on long-form
content, yet completion rates remain high.
■■ 58% of all clients and 79% of Programmer clients are using
measurement currencies such as OCR and vCE.
■■ The UK market is more aggressive than the US with regards to
monetizing long-form content and less aggressive with regards
to using pre-rolls on short-form content.

18. For more information on this report:
Brian Dutt
Director, Advisory Services
bdutt@freewheel.tv
Media inquiries:
Laura Colona
Director, Public Relations &
Corporate Communications
lcolona@freewheel.tv
© 2014 FreeWheel. All Rights Reserved.