Insights: It’s Been A Transformative 2016 For Digital Video, But Is A Rugged Shakeout Looming?

By 12/16/2016
Insights: It’s Been A Transformative 2016 For Digital Video, But Is A Rugged Shakeout Looming?

Insights is a new weekly series featuring entertainment industry veteran David Bloom. It represents an experiment of sorts in digital-age journalism and audience engagement with a  focus on the intersection of entertainment and technology, an area that David has written about and thought about and been part of in various career incarnations for much of the past 25 years. David welcomes your thoughts, perspectives, calumnies, and kudos at, or on Twitter @DavidBloom.

This installment of Insights is brought to you by Beachfront RISE. RISE

Over lunch this week, Eunice Shin, who runs the consulting firm Manatt Digital, posed a really good question to me: Have you thought about how much has changed in digital video just in this year?


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She’s right. We started batting around some of the shifts that happened in the past 12 or so months. The list of what’s new, what’s dead, and what’s different just in this year, since amended as I’ve thought of more additions, is a little astonishing to think about.

What we gained:

  • The rise of over-the-top video, as hundreds of niche channels such as Comic-Con HQ, Fullscreen, and Rooster Teeth crowded onto Apple TV, Roku, and other streaming platforms. Amazon began offering access to many of these channels as subscription add-ons to its Prime service. Viewing through OTT apps jumped 65% this year, to about 8% of daily TV time in the key 18-49 demographic, according to a new study by Pivotal Research.
  • The debut of “skinny” TV bundles, such as AT&T’s DirecTV Now, providing much cheaper alternatives to traditional cable- and satellite-TV offerings.
  • Netflix hit a switch at CES at the start of the year, and tripled the number of countries its programming reaches, to more than 190. The company said it would spend $5 billion in original programming in 2016 and more recently said it would spend $6 billion in 2017.
  • Amazon hit a switch at the end of the year, increasing the number of countries with Amazon Prime programming from five to more than 200, or all but four. The company said it would double 2016 original programming spending to $1 billion. With the international expansion, analysts suggested Amazon might need to pony up another $1 billion to $2 billion for even more shows.
  • Amazon’s billion-dollar side gig, Twitch, launched a new “IRL” category of both live and pre-recorded video, giving its game-play commentators a separate place for vlog-like lifestyle  content similar to what has filled YouTube for years. Twitch also will launch mobile broadcasting next year for gamers on the go, the content defaulting to the IRL channel.
  • Google’s YouTube Red subscription-VOD service announced a slew of original movies and shows at mid-year, some with Hollywood notables such as Channing Tatum and wife Jenna Dewine Tatum. Less clear is whether that service is getting significant traction with subscribers.
  • Snapchat’s growth was so explosive that it scared competitors and left investors salivating over an imminent big exit. Late in the year, Snapchat said it would go public in 2017, at an expected  $25 billion valuation.
  • Periscope Live launched.
  • Twitter Live launched, better integrating Periscope Live into the parent company’s platform.
  • Tumblr live-video launched, though it actually just leveraged several other companies’ services so they could more easily reach its vast, angst-filled young audience.
  • staked a claim to the entire mental bandwidth of every girl between the ages of 10 and 14.
  • Yahoo was, tentatively, sold to Verizon for its audience, video ad tools, and key properties such as Tumblr, Yahoo Sports, and Yahoo Finance. But the sale, and the sale price, are both up in the air after Yahoo disclosed it had been hit by the two largest security breaches in Internet history, the most recent affecting 1 billion users.

What we lost:

What’s in play for next year?

  • Net neutrality rules. The President-elect has expressed skepticism about current rules (and there’s reason for some skepticism about how it’s currently implemented). But big changes in the rules, such as allowing ISPs to charge media companies for paid peering on fast servers close to their customers, have major implications for that blooming OTT ecosystem. What happens to the hundreds of niche over-the-top digital channels that have flowered in the current environment? They’re the ones that quickly become vulnerable, perhaps lethally so, if hefty ISP fees are piled on top of their existing operational cost structures.
  • A reshaped FCC. Congress failed to act on the reappointment of FCC Commissioner Jessica Rosenworcel, leaving the commission split 2-2 between Democrats and Republicans. Tom Wheeler, the commission chairman, has just announced he will resign when Trump takes office, setting the stage for major changes ahead. Until the new members are named, however, it’s impossible to know what direction the FCC will take at a time of rapid transformation affecting digital media on the web and on mobile.
  • The Shelf Life of Creators. Creating fresh content week after week for a vast Internet audience is hard. Many current creators have been at it for two, three, four, even 10 years now, an exhausting grind that’s hard to sustain. One reason so many online-media stars look longingly at more traditional Hollywood gigs is that, for all the challenges there, such jobs are far less demanding than the digital-content treadmill. There are hiatuses. There are writers’ rooms. There are marketing departments, and production teams, and ad-sales units. Will we soon see more online-media stars either transitioning to traditional media or moving on with their lives in some other way?
  • The Role of Social Media in a New Administration. Donald Trump used his bully pulpit on Twitter to bully many people and drive his campaign’s success, then didn’t invite Twitter CEO Jack Dorsey to this week’s substance-free summit of tech leaders because it “wasn’t big enough” (or, reportedly, because Twitter wouldn’t allow creation of a “Crooked Hillary” emoji). Facebook and Google, meanwhile, are grappling with implications of their fake-news issues, trying to figure out how to give people more information they want, but also ensure that information is based on something like facts. Facebook announced it has partnered with the Poynter International Fact-Checking Network to fact-check material. A new pop-up on unfounded articles will read: “Before you share this story, you might want to know that independent fact-checkers disputed its accuracy.” That may be a helpful additional step for Facebook users trying to get closer to Factbook. Regardless, the 2016 campaign was the next logical step in social media’s rising political impact, which almost certainly will grow further in 2017 under Trump.

It’s been a heck of a 2016 for digital video in so many ways, as all these shifts above suggest. Just talking through the changes and their implications with Eunice this week provided a very tasty intellectual feast. That sundubu soup at Seoul House of Tofu was pretty great too.

RISEThis installment of Insights is brought to you by Beachfront RISE, the premier app building company that houses all of your content in one place for any device, and monetizes it automatically with their built in programmatic video advertising platform.

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