Video

Will Online Video Ever Be Taken Seriously?

Posted by Jay Friedman on August 31st, 2009 at 12:00 am

Online video and its "growth" sure is all the rage lately.  Article after article are written about its weed-like growth.  A real problem for the growth of this aspect of online is that most of the videos being viewed are, well, garbageGarbage that most brands don't want to be associated with.

Look at these two graphs:

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14.2% growth is huge when the base was already over 100MM users.  The problem is that the number of users watching good quality content suitable for most advertisers rather than people jumping off houses into trampolines is not anywhere near 100MM.

In fact, the second graph shows that YouTube streamed more than four times the number of videos that the next nine largest sites streamed combined.  YouTube also had more uniques than all the others combined.  What's on YouTube?  Some quality, but mostly videos of people doing things like jumping off trampolines into houses.

For online video to become a larger part of most brand marketers' plans rather than just a small number of brand marketers' plans, studios and content owners might pay attention to the "figure out the revenue model later" adopted by so many successful online companies.Facebook, Twitter, even Quantcast on the B2B side have had explosive growth and created businesses worth billions of dollars by taking in no money. 

While online video is mostly free night now, it's not free enough.  By that I mean that TV shows and movie content are not easily downloadable AND transferable between any devices unless you are an Apple die-hard (and with Apple having only 7.6% of the PC market, they will not drive this bus).  It's also a universal format issue.  Transferring files from PC to Blackberry, PC to DVD, PC to PSP - you name it - has to be easy enough for Mom and Dad to do it.  Right now, it's a nightmare.

During this so-called explosive period of growth for online video the market caps of TV and movie studios hasn't grown much.  Meanwhile, those who give their product away completely free have businesses worth billions, up from $0 just a few years ago.  Yes, SAG talent needs to be compensated.  Yes, the studios will lose a little to those who cheat the system.  But massive growth among videos of people's dogs on skateboards will not drive online video to be a major chunk of this industry's spending.  Quality content that is easily viewed in any format could drive it through the roof tomorrow.

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