Last week Ooyala announced our new content discovery technology that connects viewers with highly relevant video content. We've been demonstrating this technology at the NAB Show and are seeing massive interest from the industry. I wanted to file this report from Las Vegas and show how Ooyala's content discovery technology helps video publishers engage their viewers and earn more money from streaming media.
Leveraging our Big Data expertise and the more than 2 billion data collection events we process every day, Ooyala's new discovery solution uses advanced algorithms to present each user a targeted selection of content that matches their interests. The end result is a personalized viewing experience that generates more revenue for content providers.
This technology has been in pre-release with a select group of Ooyala customers for some time now. I can't tell you who they are, but so far we have seen outstanding results. Most of these customers already had a solution for encouraging their viewers to watch consecutive videos. Compared to existing solutions, Ooyala retained significantly more viewers. After the first video, the existing technology had an abandonment rate of 24%. Ooyala had a 9% abandon rate after one play. This is incredibly impactful. The more viewers are engaged with personalized videos tailored to their tastes, the longer they watch, and the more money publishers earn.
Let's look at the numbers.
Being a Big Data company, we collected and analyzed detailed data on the relative performance of our content discovery technology on viewer abandonment. We used real experimental data to project engagement and potential revenue for a large publisher. In the chart above, we look at a video publisher that attracts 1 million daily visitors. The grey bars represent their existing solution and the blue bars represent recommendations powered by Ooyala's algorithms. After the first video, you can see a significant difference in audience drop off rates. This abandonment trend continues with every subsequent video. By the 10th video, most of the initial audience has whittled away for the existing solution. Almost half of the original viewers are still watching when they are getting content recommended by Ooyala's new data-driven technology.
How does this translate to monetization? Assuming a very reasonable effective CPM, we track the incremental revenue from using our content discovery over the existing solution for a period one month. You can see how the longer watching sessions can result in up to $2M in additional revenue by keeping viewers engaged.
Ooyala gives media publishers ESP by making Every Screen Personalized. Stay tuned for more details as we continue to drive innovations in consumer experience.