The first online video oriented event I ever went to was in Fall 2006. It was called Video on the Net. It was a small, peripheral component of Jeff Pulver’s much larger Voice on the Net conference. You can check out the original lineup here. It was good.
Veoh CEO Dmitry Shapiro talked about content discovery. Brightcove Chairman and CEO Jeremy Allaire discussed the democratization of the tools of production. The ~300-seat conference room wasn’t packed, but it was more or less full and pregnant with excitement about the future of entertainment. After the events of the day, the attendees would meet at whatever local bar and we’d toast to the imminent end of television. It was inspiring and, in retrospect, incredibly naive.
More than five years later, TV viewership is down ever-so-slightly, but the TV business is more or less booming. The internet hasn’t yet caused or created a reason for a mass exodus from television, like entertainment industry titan Michael Eisner (and countless others) foretold. Those of us in the online video industry who once believed in the inevitability of the end of traditional media have had to readjust our expectations. We’ve learned it’s not a zero sum game.
TV will be around for a very long time and it’s success, failure, or status quo is not necessarily inversely proportional to the success or failure of online video. So, at a time like now, when TV is doing a-okay for itself, it’s totally feasible online video could be doing a-okay for itself, too.
And online video is doing pretty well. But it’s poised to do even better.
Insert Dramatic, But Self-Aware Online Video Industry Prediction Here
Individuals involved in the digital/interactive/online video/television industry/space/sector (or whatever combination of those words have ever been used to describe this business) have felt like they’ve stood on the precipice – right on the edge! – of a dramatic paradigm shift in the entertainment industry for quite some time.
But don’t take my word for it. Take Mark Suster’s. The enterpreneur, angel investor, and prolific blogger has been waiting for an entertainment industry revolution to happen in the next 6 to 12 months for the last 20 years.
I know people like me (individuals who write about, and are intimately involved with the online video industry and/or once toasted to the end of television after a conference in 2006) are especially susceptible to writing dramatic end of year posts in which he or she predicts things like, “This very next year will be THE year for online video.” So, it’s with all of that in mind and healthy amount of self-awareness that I’m going to say, “This very next year will be THE year for online video.” There are a few reasons why.
The Conversation Has Changed
Online video was once easily dismissed by entertainment and advertising industry executives as being nothing more than “dogs on skateboards.” More recently, they’ve switched the refrain to “talking fruit.” But important decision makers and purse-string holders at massive media companies and international brands can no longer dismiss online video so easily. That’s because YouTube changed the conversation.
The video sharing site with a global audience that watches over 88.2 billion videos a month recently invested over $100 million in a slate of roughly 100 newly funded original channels. That dollar amount is a rounding error for a corporation with revenues of almost $10 billion a quarter, but still a sizable investment into the burgeoning online video industry.
The investment gives YouTube a new way to approach conversations with brands. The media company now has a slate of (presumably) quality programming against which it can sell major advertisers. The $100 million also gives YouTube a few dozen production partners with a vested interest in wooing brands to spend cash on or against their programs.
If YouTube’s Content Sucks (and maybe it will or maybe it won’t), It Doesn’t Matter
Not all of the channels will be successful enough in garnering views or the advertising dollars needed for YouTube to recoup its investment. In fact, most of the channels will fail. But that doesn’t matter.
YouTube’s $100 million dollar investment is an investment in YouTube content, but it’s also a major marketing initiative for the entire online video industry. The deal has gotten a ton of press and it’s forcing executives at Fortune 500 brands and billion dollar advertising conglomerates to assess their online video strategies.
Even if every single one of YouTube’s new channels initially produces unwatchable programming, the initiative can, in many ways, already be considered a coup for the online video industry. First, it’s showing advertisers YouTube (and the internet at large) can be, in the words of YouTube’s Head of Ad Sales Suzie Reider, “a clean, well-lit place for content.” And second, the content can get better. Just the fact that a lot more of it is going to exist is a big win for online video. (It’s a lot easier to move from 1 to 2 than 0 to 1.)
There’s the Beginnings of a Generational Shift
Individuals who were in their mid-20s in 2006 and watched episodes of Tiki Bar TV and Ask a Ninja when they could steal time away from making coffee and/or copies for their bosses are now in their late-20s and early-30s watching online videos and original web series when they’re not managing multi-million dollar accounts. They have a relationship with the medium, see its potential, and are beginning to incorporate it into advertising and branded entertainment campaigns.
All The Other Reasons
There are a handful of other reasons 2012 will be THE year for online video. And Mark Suster covered them all. If you haven’t yet watched his presentation on the 10 Signs Internet TV is Ready to Disrupt the Industry, you should.
Here’s to 2012.