Content trends and the future of Video

There's an interesting post in the Online Video Insider blog that takes a broad look at the past and future of video content.

• 2006 saw the emergence of User-Generated Content (UGC), culminating in Google's acquisition of YouTube.  Content exploded as everyone could create and (more importantly) share content that while often trivial, was occasionally extraordinary.
• 2007 saw a shift in focus to aggregation - of building systems to help viewers identify and find content of interest by aggregating access and developing improved search and recommendation software.  
• March, 2008 saw Hulu go online, bringing "professional" content in the form of movies and TV programs to the Internet and greatly expanding access to high-quality content.  The move also helped both Apple's and Amazon's nascent online video marketplaces by encouraging "professional" content owners to license their product for digital access.
• 2009 saw the impact of "Technology," in the form of infrastructure and software improvements.  Improved access to high-speed broadband allowed distribution of higher-quality video, and new content management systems (CMS) and content delivery networks (CDN) reduced costs while improving transmission reliability.
• By 2010, online advertising revenues had expanded to the point where incremental distribution could be monetized.  That is, where distributors could profit from more than the most popular content - where specialty and narrow interest content of the "long tail" could drive further expansion of online content of all types.
• Last year, 2011, saw a focus on Content Differentiation, with networks and aggregators starting to subsidize production of unique or distinctive content.  Some on the full professional end, seeking more traditional TV programs and films that they could have exclusive access to and thus distinguishing themselves from the growing number of outlets.  Many also supported a shift to higher production standards from major UGC creators, and the creation of separate narrowly targeted "channels", with the hope of building value and demand.
• Will 2012 see "Madison Avenue become Wall Street"?  The post suggests that one advantage of online options for advertising agencies is the ability to monitor and shift advertising dollars on the fly.  Thus, the market model for ads becomes more of a real-time exchange model (Wall Street) than the traditional (Madison Avenue) model of upfronts and packages.
  "With an increasing number of content creators, publishers and ad networks vying for supremacy, we’ve seen the rise of ad exchanges and real-time bidding that allow marketers to effectively bypass or merge many of the steps involved with media planning and buying."

 The piece concludes that while the online video segment has certainly grown, is likely to continue expanding, and has clearly been at least somewhat successful (generating revenues of $2 billion in 2011), that the numbers remain below some earlier optimistic projections and aren't generating the same level of ad revenues per viewer that traditional broadcasting earns.
  For my view, this is neither unexpected or problematic.  Online video audiences are quite different from broadcast audiences, in both scale and scope - and on that basis should not be expected to be as valuable to most advertisers.  On the other hand, online offers a degree of targeting that is unmatched, and would be more valuable to advertisers seeking that level of targeting and focus.  In addition, online video costs are significantly lower than those of traditional media (by several orders of magnitude), and thus can be more profitable, even at lower revenues and ad rates.  There really is no need for online video providers to "match" traditional media revenue levels.  Finally, long term projections of new media are notoriously inaccurate, often because they're projections from the early stages of diffusion, where the rate of growth is often highest (and clearly unsustainable over the longer term).  So I'm not bothered that the actual revenues are significantly less than what they were projected to be based on where the market was some five years (or more) earlier.

Source - The Seesaw Effect: Trends Shaping Video's Past and Future,  Online Video Insider

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