The future for online video could hardly be brighter. According to the Visual Networking Index published in June by Cisco, by the end of 2010 global internet video traffic will surpass global peer-to-peer (P2P) traffic for the first time, and by then the global online video community will exceed one billion users.
Furthermore, it predicts that by the year 2014 online video, in all its various forms, will comprise 91 percent of all consumer internet traffic.
Unsurprisingly, brands, advertisers and content producers are champing at the bit to take advantage of the way the internet is heading. In the past it was a text-based medium and everyone involved structured their activities accordingly; now the web is a communication tool built around connections and conversations and video sits right at its heart.
How do we know that? Because it’s not just about YouTube any more: video conferencing allows businesspeople around the globe to communicate face to face, while the growth of sites like Chat Roulette shows that appetite for video is not just limited to watching what someone else has made.
Changing behaviours
This change in consumer behaviour has come about due to a major shift in how people consume media online and the available technology that has facilitated that movement.
Today’s ten-year-olds are able to watch video online thanks to faster broadband speeds and the ensuing growth of portals and producers eager to meet their demand. In fact, many of them don’t even bother with television because it lacks the flexibility, immediacy and pinpoint targeting that the digital world can provide at the click of a mouse.
This trend is set to continue in the coming years. In fact, it will be interesting to see how the traditional television channels adapt and cope with rapidly eroding audiences and the ensuing decline in advertising revenues.
Driving hard on the heels of this shifting behaviour is the demand for more and better content. Demand already exceeds supply by quite some margin, not least because video is more expensive to make: just compare the respective production costs of a few pages of text versus a ten- or even thirty-minute show.
So what will we see coming in to fill this gap? Actually, it’s already here: branded content. Producers need a consistent return on investment to justify making more and better content and the best way to do that is to partner with brands and advertisers.
Scale and distribution
Currently this market is in its infancy, but the next few years will see branded content explode onto our monitors to a scale beyond anything available today. And scale is exactly what it needs in order to be effective – along with the right distribution.
The key will be the ability to target and deliver the right content to users where they are most likely to watch it, rather than forcing them to visit a destination site like YouTube. It is a push versus pull distribution format, where the content will be pushed to and consumed by the user rather than relying on pulling them to the site where the content sits.
By delivering branded video to users wherever they already are on the web – in their email, on a social network or reading about last night's big match – that content becomes much easier to discover.
As it stands, portals and destination sites require users to search out this content on their own, which assumes they have the time and that they remember to do so. Pushing content to users enables them to consume the quality video content they want in many more places than they previously could.
Of course, simply reaching massive numbers of people isn't enough: reaching the right audience in a meaningful way is what brands and agencies are looking for. The push model lends itself to targeting based on traditional ad network metadata, including demographics, geography, channels and behavioural targeting, all of which enable the precise delivery of relevant video where it is most likely to be consumed and enjoyed.
The next few years are likely to see a lot more interest in this model. Content producers will be happy because their video is being seen by the audience it was created for, while their brand and advertising partners have similar goals. They know film and TV audiences are moving online and partnering with the right content will enable them to reach those people once more.
Future monetisation
This is all very well, but it means nothing if there isn’t a way to monetise it. The increasing use of subscription-only sites and pay walls highlights the growing need to monetise digital content, and also showcases that people will pay – but only if the content is good enough.
This means we won’t see, as some have predicted, the end of editors and journalists. In fact, with so much user-generated content available, professionals who can create and control quality material will be more in demand than ever.
In fact, producers and brands who want to make money from online video will need to take ‘quality’ as their watchword. A scan of many internet-only web shows reveals production values and innovative ideas as impressive as one might find in any big-budget television programme from a major studio – and in a lot of cases, more so.
After all, if you want to make it pay, you have to make it worth watching.
The future is now
We’re already seeing a major shift in how producers create digital video content, in how brands and advertisers position themselves around it and in how people consume it. The next few years are likely to see these trends accelerate: the technology is there and can only get better; and social and other pressures are driving more viewers online.
The organisations who will succeed in this environment are those who can engage, track and converse with those audiences. That means quality content, combined with scalability and distribution strategies to ensure it reaches the right users when they are at their most receptive.
It’s a change, no question. For years now the internet has been about niches: no matter how obscure your interest, there’s probably a website and a Facebook group devoted to it.
The coming years will see more brands looking to push high-quality video-based content to their most relevant niches, but at a scale that makes it financially viable. The large ad networks and distribution platforms are key to making this happen: they already playing a significant role in delivering online video and this will only get bigger.
Matthew Hunt
Managing Director of Adconion UK