2012: The Year Web Video Turns Into 2 Businesses

[Editor’s Note: The following guest post was written by Steve Rosenbaum, Founder and CEO of Magnify.net and author of Curation Nation. You can follow him on Twitter @magnify.]

In the past twelve months we’ve seen the first generation of web video business models draw to a close, and the emergences of devices and business models that will fuel powerful continued growth in the year ahead.

Is YouTube Still in the Business of UGC? 

Since web video began, User-Generated Content sites have counted on advertising revenue as their economic salvation. Despite the belief in this model, and a steady stream of venture capital, advertisers haven’t bought in. Instead, money has flowed to quality created content, and quality curated collections.

Google looked at the trends and made a massive pivot in the YouTube model, effectively shifting from a neutral content aggregation and delivery platform into a ‘studio’ model that puts them in the position of funding, and promoting content. This is a smart strategic shift, and one that has the potential to give convention cable networks and other emerging distributors a powerful new competitor. At the same time, it further diminishes Google’s interest in what used to be called ‘the long tail.’

My prediction is that YouTube won’t go out of the UGC business, in fact, I predict the exact opposite. I think you’ll see more creative ways to monetize YT, including new partnerships with portal players, 3rd party ad units, and the emergence of important sponsorship and co-branded pages. It’s unclear if YT will build these offerings, buy them, or partner with others to provide them. But AdSense text ads for video aren’t alone going to fund the future of the middle market of video. Instead, you’re going to see some number of business users look to take more control over their content, their ad units, and the community around their media.

What Happening Over The Top? 

At the same time, the delivery system for video is very much under construction. The so-called “Over The Top” competitors have had a busy year – with Google TV v1 falling flat… but v2 looking promising, and Netflix’s ill-fated Qwickster dying a quick death. At the same time Boxee jumped into the business of providing digital ‘rabbit ears’ and Hulu briefly auctioned itself before returning to running the business. And now Microsoft moves to gain OTT dominance with a brand-new Xbox interface and more content deals. So, no clear winner here yet.

The big surprise in the future of video delivery is that it may not be the flat screen at all. Kindle Fire, the newest kid on the tablet block is off to a stunningly fast start as a video and VOD platform. IHS Research projects Amazon will ship 3.9 million units in Q4, recording a 13.8 percent share of global tablets shipped, compared to Apple’s 65.6 share. While the data is still new, all indications are that Kindle Fire is going to burn up the video consumption charts, making Amazon Prime Video a powerful contender for table, OTT, and mobile video consumption.

Everyone’s a Publisher

Meanwhile, on the content side of the world, it appears there is now a consensus that everyone needs to be a publisher. This means Brands, Networks, and Print Media all are vying for a spot in your overflowing content ‘in box.’ What is a publisher in this new world of Digital Overload? It used to be publishers were content creators, but increasingly publishers are taking on the role of content filters. Finding, Organizing, and Presenting coherent content is wrapped in to the role of Curator that brands and media now embrace. Magnify.net sits squarely in the center of this revolution.  As the webs largest video curation platform, we watch as Parenting.com, TEDx, and Patagonia all power their video experiences with our flexible toolkit.

The next twelve months are going to be transformative. Web video will become simply ‘video’ – made everywhere and consumed everywhere. And brands and companies, who’ve contemplated using video to tell their story or connect with consumers, will find that the train is leaving the station. It’s time to get on board the video express,  or be left with an unpunched ticket in your hand. That would be just sad.

Steve Rosenbaum has been working with Curated Content since he created the groundbreaking hit MTV UNfiltered in the pre-web days. Since then, he’s been a storyteller, filmmaker, and executive at media and web properties. He’s produced films for HBO, A&E;, National Geographic, CNN, MSNBC, and Discovery. Now, as the founder and CEO of Magnify.net, he runs a platform company that allows Publishers, Brands, and Web communities to embrace web content with Aggregation, Curation, and user Contributions. Steve is also the author of the book Curation Nation published by McGrawHill.