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Summary:

There has been an explosion of content over the past five years — a trend that shows no signs of abating. In the land of a million channels, the filter will be king. Value will accrue to those that aggregate and filter programming.

crystalball

I was recently asked to prognosticate about the next decade of TV and online video by an analyst. It was flattering and slightly bewildering, as I’m not exactly a visionary but I have been “in the biz” for a while. While the discussion was free-form, in retrospect, it focused around major trends in the video landscape and the fall-out from them:

The explosion of content

Clearly there has been an explosion of content over the past five years — a trend that shows no signs of abating. In the land of a million channels, the filter will be king. Value will accrue to those that aggregate and filter programming.

  • As with traditional television, there will be a handful of new video aggregators that emerge with sustainable businesses. The fact is that aggregating video content today is an expensive proposition. One must have deep pockets to buy the rights and distribution scale to justify the expenditure. In the US, we’re seeing this play out with Netflix, Amazon, YouTube, Apple, AOL, Yahoo and Hulu contending for online rights alongside the cable companies. It will be increasingly difficult for new entrants to make inroads here. There is no shortage of startups trying to be the EPG of online and mobile video.  But the best filters rely on scale and leverage network economies (Amazon reviews, Netflix, Pandora), and so it will be a “winner take all” (or, at least, “most”) outcome.
  • YouTube will be spun out. Google will realize it could get more value from YouTube by spinning it out. YouTube is acting more and more like a traditional programmer of content — buying up rightsfunding original programming and so on –- and getting more “media DNA” will be as important for them as technical talent.
  • The plethora of available content will, paradoxically, mean that live events, especially premium sports with broad appeal (F1, World/Euro Cup, Superbowl, Olympics, IPL, major golf & tennis) will grow in stature and wealth. They will benefit from the scarcity of events with mass appeal given the time-shifted nature of video consumption. This lack of “supply” will result in concerted efforts to create more “tent-pole” events — there’s too much money at stake not to try. The IPL is the best recent example of this but look for more here — World Cup Basketball anyone?

The emergence of the social graph

We are still coming to terms with the power and implications of the social graph. While Facebook was first seen as a pure social networking and communication utility platform, it is increasingly becoming a place to consume media. So I predict that Facebook will overtake YouTube as a video consumption destination in the next five years.

Facebook is already a major media consumption platform with all of the social gaming that currently occurs. Moving into other content categories such as music and video is not a big stretch. In fact they just appointed Reed Hastings to their Board — a signal of their media ambitions not to be ignored. Moreover, they have a music strategy afoot (which I think will be big).

Video content owners today program channels on Facebook but there is no aggregation across channels. This represents a market opportunity for Facebook or another aggregator that would take advantage of their social graph.

Mobile and the cloud

Media consumption on smartphones and tablets is increasing on an exponential basis. At the same time, the “cloud” is enabling on-demand access to software and media, and obviating the need to store and sync files locally. Given these two trends, it seems a smart bet that the smartphone/tablet will be the hub for accessing and displaying content with “dumb screens” such as TVs and computer monitors that will get the signal from them. Smartphone docks are already being built into car dashboards, which could make the radio tuner redundant.

New Players on the World Stage

We will see a challenge to the dominance of U.S. and Western European media companies coinciding with the growing economic power of emerging market economies. There are players in these so-called emerging markets that are already making a splash and this will only continue. Abu Dhabi Media, Naspers, Al Jazeera, Globo, Televisa, Reliance, Mail.ru, CCTV and others will be asserting more influence on the world stage — and on par with the Disneys, News Corps and Universals of the world. Look for a major U.S./Western European network to be bought by an emerging market player. It wouldn’t surprise me to see one of them make a play for Hulu.

Finally, there’s the “wild card.” The above predictions aren’t necessary big leaps of faith to make. More significant will be the wild cards that aren’t even on the radar. After all, YouTube, Facebook and the explosion of social networking and UGC were mere glimmers in the eye 10 years ago.  It will be fun to watch.

Rags Gupta is currently VP at Brightcove, based out of London. He can be found at www.twitter.com/ragsgupta and www.ragsgupta.com. All of the opinions expressed are his own and not that of any companies he is affiliated with.

Image courtesy Flickr user islandguy

  1. Interesting to see your views on premium sports expanding – I’ve actually been experimenting with some sites based around the idea videogame genres are rapidly expanding to the point that specialist insight is being needed into the type of game, much as sports or music currently have…

  2. http://en.wikipedia.org/wiki/FIBA_World_Championship = there already is a “basketball World Cup.” There are already plenty of “tent pole” sporting events in the world. The fact is, the world is becoming “Flatter(Thomas Friedman)” thus causing plenty of sports to grow in international popularity. For example: 2008 was the first time ever that the Soccer World Cup was viewable via a non-pay-per-view(non-ppv) format in The USA. The 2008 World Cup was viewable via the ESPN networks. The World Of Sports does not need a Hollywood choreographer, the world of sports is already the most valuable commodity in TV!!!!!!

  3. Good point, Billy on the Basketball World Cup. I guess my point was that something like that would be elevated to true ‘worldwide’ status (ie hundreds of millions to billion people following it), which I don’t think is there just yet.

  4. An EPG is the gateway to content on TV already. On the web this will be even more powerful given the wealth of analytics it accumulates. I believe that a guide to web video has to rethink the EPG – personalization, social curation etc.

  5. Charlie Davis Friday, July 1, 2011

    Nice article, Rags. Analytics, tagging, and filters need to be a primary focus if we’re to make sense of the noise. Curating content can be exhausting if its done manually and without guidance.

    Interesting point about video consumption in Facebook – I could see Facebook being the front-end and YouTube handling the backend in time. Facebook users primarily link out to video content and playing that content gets tracked back to the source in most cases. Comscore numbers for the last year have shown Facebook is hovering around the top five online video sites, but still hosts a fraction of viewing sessions per month – ~180 million versus ~5.6 billion). Obviously these numbers are around viewing of content, not sites in which they are viewed. If Comscore or Nielsen tracked that info I’m sure we would see some interesting figures close to what you’re saying.

  6. Jonathan Glazier JG Sunday, July 3, 2011

    Very interesting, I predicted that event TV, Live TV was really going to be the life blood of Broadcast TV years before the live viewing fest of today, 15 years ago TV went through a period of recording everything, either through fear or economics, it was the answer to every problem, it resulted in sterile dull TV. Now, it’s not just the sporting events, but the inclusive live events of Celebrity Get me Out of Here, Idol Xfactor, Dancing with the Stars etc. that capyure large audiences. If you look at broadcast TV it is its very reason for being, if you don’t catch it live more and more today there is no point in even thinking about watching those shows VOD or even on the plus PVR services around the world, the results will have been tweeted, facebooked and spoiled before you get close to watching a recording. Live TV puts the audience on the spot, watch this now or miss out. And that gets ratings and that drives the revenue. The interesting thing is that we cant always be sitting in fornt of the family TV when the event is live, in pops mobile live video streaming and you have the answer. NO more discreet headphones and stifled cheers from the congregation at the wedding on cup final day, just the bowed heads of eyes glued to their iphone/htc’s in the car on the way home from saturday sports and the passengers can be glued to xfactor live. And then there are the local and business possibilities, don’t spend the money or time on attending, watch the keynote/AGM/ graduation/wedding – live from where-ever you are. My advice if you are in video get into live streaming.

  7. Pandurang Nayak Monday, July 4, 2011

    Interesting points. I think 5 years is a pretty long timeframe for the Internet. Most of what you have mentioned will happen much sooner.

    I think a big change that will happen is the end-user consumption patterns changing and the “filters” you mention will actually have to be on aggregators who bring the content from various sources into a common experience – companies like Roku are in that direction already. A lot of this behavioral change will also drive technology innovation.

    I also think we will see more advances in fields like 3D, video compression, reducing bandwidth rates, storage costs and many of the big barriers that prevent video to be produced, delivered or consumed without economies of scale. This change could trigger a lot of UGC content bridging closer to premium content. Remember today’s premier content is still made for the traditional medium. Content made specifically for consumption by the online medium is largely in the form of UGC today.

    Finally, there will be some consolidation and some breakthrough innovations – that will add yet-to-be-discovered dimensions to video. This is akin to what Facebook’s social graph did to the Internet as we knew it. There will be something we are yet to see that will change something fundamental. Because 5 years is a lot of time!!!

  8. Good post, and while its hard to predict the future (in any field), I think your suggestions all make sense. As you say, it will be the new and unforeseen events that will make it truly exciting. The social graph is important as you say, especially as most laptops have their own webcams, etc… so the accessibility to creating (even very basic) video is increasing all the time. Cisco said earlier this year that by 2015 most internet traffic will be video. There will always be a natural filter for content though – good, content-driven video will always rise to the surface, although perhaps not as quickly or quite as far as television has influenced previously. In fact, the need and desire for high-quality content will probably rise, as people become bored with 30-second clips of cats on YouTube. Good article, and good read, and, above all, thought provoking. Maybe the biggest question is how future online video will be monitized (the million (billion?) dollar question) ;)

  9. Interesting points. My biggest surprise was you opinion that Facebook will overtake YouTube within 5 years rather than a wild card which is what many others contend.

  10. I’m not a pessimist by any means, but I have a feeling the consumer will slow down a lot of the advancement in the future. 1- of course economic reasons, and 2- I believe the consumer’s cup so to speak is getting kinda full. Future technology is going to be a much harder sell for common folk. Of course we techies will always crave.

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