In our third annual OVP Predictions piece we look back on the online video space from a general practitioner’s view (mine) and ahead from a leader’s view (the OVP founders, CEOs, VPs, etc.). It’s been another amazing year filled with record breaking events, ups and downs, foundings and shutterings (neither of which are words) and the addition of 10+ new OVPs. It’s a crowded space indeed, a theme you will see often in the words below. Over the years at VidCompare we’ve watched over 100 platforms ebb and flow with the threat of commoditization while roughly 15 OVPs were acquired or rolled-up into other OVPs, and 13 shut their doors. All this while video viewership continued at a breakneck pace. In September 2011 comscore reported that 182 million U.S. Internet users watched online video content for an average of 19.5 hours per viewer. The total U.S. Internet audience engaged in 39.8 billion video views (Wow).
We’ve seen several OVPs begin to specialize in an attempt to pull away from the pack with one OVP in particular making a unique move into the world of cloud-based application management (Brightcove), while Ooyala honed in on analytics and monetization, RealGravity into the world of advertising and syndication, Unicorn Media and Twistage sharpening their workflow management skills, and Magnify.net dominating the world of curated content.
Enough of the obvious, let’s move onto the interesting stuff. This year we’ve culled together an impressive list of predictions from 10 OVPs, and 2 OVP gurus. Continue on to get the inside scoop from those whom have been in the trenches since the early days and don’t forget to leave your comments.
- Increased focus on HTML5 on the front-end, and on highly customized and tightly integrated editorial workflows on the back-end (e.g. deep integration with the CMS, customized ingestion and transcoding flows, flexible metadata schemes etc…). Both of these needs will continue and drive the appeal of open and flexible platform.
- Increased adoption of online video by organizations as part of their ‘social enterprise’ strategy. Most medium/large businesses will have their own internal ‘corporate YouTube’ for internal communication, training, and collaboration, and tie it with their external video use cases such as for marketing and support. This need will increase the demand for systems that can operate well both within the enterprise (i.e. on-premise software optionality, flexible APIs etc…) as well as outside it (i.e. advanced distribution, publishing, analytics etc…)
- Increased demand by VARs and OEMs to integrate custom OVP functionalities into their own suite of cloud services. This will drive demand for flexible platforms that can be hosted on-premise on any cloud, and that enable rapid development and deployment of highly customized multi-tenant services.
Ron Yekutiel, Chairman and CEO, Kaltura
After years of more and more OVPs coming to market we’re finally starting to see a slow-down in the number of new launches. My prediction is that any platform that’s not in the market already doesn’t stand much of a chance in 2012. Already there is a glut of basic, SaaS OVPs at the bottom end of the market, offering little differentiation in terms of features or service. Unsurprisingly at this end there is a race to the bottom on price which will continue into next year.
Meanwhile here in the UK we’re seeing high levels of interest in OVPs from non-traditional media owners – retailers, brands and marketing departments of large organisations who are looking at technological solutions to video delivery for the first time. For these clients, the feature-set is vital – especially analytics. I anticipate that the biggest growth in the market in 2012 will be amongst brands who want to use online video as a strategic marketing tool. Platforms will struggle if they’re too technical, or aren’t geared up to help marketers manage and measure their content.
Steffan Aquarone, Strategy Director, Buto.tv
The venerable OVP space is going to continue to consolidate – no surprise there – but the players who are growing are solving real problems for a space that has made mobile and connected device video more than a novelty.
- The problem of platform proliferation is still growing. There is so much innovation in business models and technology that content producers will continue to be challenged with the need to reach new devices, operating systems and delivery networks. At Unicorn Media we see dozens of new devices accessing our customers’ content each week. The Kindle Fire is just the beginning of a parade of emerging technology such as the Honeycomb (and all its variants), Windows Phone 7.5 (and 8), the long-awaited Apple TV and the many connected TVs expected to surface this year at CES.
- Rise of the “channel”. Netflix is losing its stronghold on content deals and the customer relationship. The number of specialty OTT providers producing channels to reach Roku, LG, Samsung and Apple TVs will begin to swell this year (see Popcorn Flix, FilmBox, Music Choice and others for examples of this today). When the logjam breaks is anybody’s guess, but these entrepreneurs are looking for ways to reach customers – fast. Solutions for Live and Linear channels will become as important as VOD as part of a complete solution for engaging customers.
- REAL-time Analytics and Dynamic Advertising is moving from a concept to a need. The trends above increase the need for solutions that allow video publishers to shape their business model into something that works for them and their customers. OVP providers who cannot supply their customers with real-time analytics that allow for on-the-fly adjustments, advertising content that can change or shift without relying on a Flash client, a device-specific app, or re-transcoding will be greatly challenged to meet ever-increasing customer demand to reach the sea of devices while making real-time decisions that affect their profitability.
Bill Rinehart, CEO, Unicorn Media
Moving into 2012, we’ll see the move to “HTML5 first” for delivery. This will happen first among enterprise, marketing and education categories where reach, search and accessibility are most important. Original content, which still relies on DRM and streaming, will lag behind – at least initially.
Dave Otten, CEO, LongTail Video
Prediction #1. Anything that you can get on cable will find it’s way to an ‘on-demand’ or ‘pay per view’ service. The gap between date of broadcast and the window for PPV will narrow or disappear. Cable content will become on demand content.
Remember all the promises of a new ‘ala-cart’ cable world, where consumers had choice and freedom? Well, you have to hand it to the cable guys, they’ve been able to keep that Commodification of their product just out of arms reach for as long as anyone can remember.
But 2012 will be the year that cable breaks free of it’s terrible tiered chains.
Prediction #2. 2012 will be the year of the OverTheTop revolution. Services and boxes will merge. Flatscreens will get smarter and more easily connected.
While pundits, myself included, have heralded the coming herd of cable cutters – so far, they’ve been the outliers and early adopters. It’s seemed so painfully close – and so many devices had pieces of a solution. Boxee was the leader in the open world of web content. Roku had apps and file playback. Apple TV had a well scrubbed ecosystem. Tivo had DVR functionality and off air recording. And Google TV had a broadly disturbed consumer electronics offering with Logitech. But none of them had the ‘killer app’ quotient that made them runaway winners. But that’s all about to change. Boxee is adding a tuner, Roku is connecting with more services. And offerings like Netflix, Hulu and Amazon Prime Video are making the leap to multiple devices and screens.
Prediction #3. YouTube and Google TV will merge (really this time).
It’s been 5 years since Google bought YouTube. Both companies have grown and prospered, but they’ve remained separate companies. There have been attempts by Google to monetize YouTube with various ad formats, but it hasn’t been terribly successful. Why? Because the buyers of text ads don’t want to pay a premium for video, and video is notoriously harder to target. Meanwhile, Google video closed it’s doors, and Google went down the road of content aggregation - trying to find value in the search space around video. That too wasn’t a huge win. But now, with Google TV 1.0 a distant memory – there’s a clear path to profitability for the search giant. YouTube’s 100 Million dollar content investment will result in a large number of high-
Prediction #4. Yahoo will emerge as a big creator and distributor of video.
While it’s easy to let Yahoo’s corporate drama draw your eye, the company continues to make a conserted effort to build a solid video business. While AOL has dipped its toe in the content waters, Yahoo has jumped in feed first. In particular Ross Levinson’s well executed partnership with ABC News is a clue about just how seriously they take video. Said Levinsohn ”In this time of enormous economic and global challenge, the Yahoo! audience will determine the next president of the United States. We’re building Yahoo! News to be the source for political coverage, harnessing the voices, opinions and proposed solutions of Americans from across the country to deliver content and reporting focused on the issues and decisions that voters and their families must deal with daily.” Bravo.
Prediction #5. Business Video will arrive as a real targetable business opportunity.
There are some basic truisms in business (and in life) and one of them is simply this: ”nothing in this life is free.” For the past ten years, consumers, business, and even media have gorged themselves on the wonderful access to free video serving. The cost of bandwidth has continued to fall, giving the large players an edge, even as ad revenues and CPM’s have continued to fall. Business has been late to the party, but in the past twelve months more and more companies have begun to explore the idea of making and sharing video with their customers. Many of them are using a free UGC uploader, building in some cases large collections of video on 3rd party servers. But the free video party is about to come to an end, as more and more low CPM ads and obtrusive ad formats appear – this is going to give businesses the need to find new homes, and new solutions – providing a boon to the SMB video market.
Steve Rosenbaum, CEO, Magnify.net
The second half of 2011 has been interestingly quiet compared to the first half. I think 2012 will likely be more of the same as companies like Ooyala, Brightcove, Google, KitDigital, and others focus on their distinctive competencies. Video has reached a point where providing video in the cloud is expected and customers (from what I’ve seen) aren’t ooh’ing and aah’ing over video. Users want to find, share, and access content faster – same as it ever was. At the end of the day, video is just another enabler of content, and now that the video honeymoon is (more or less) over, the OVP companies are still faced with finding recipes for content analytics, social integration, mobile offerings. It will be an interesting space to watch in 2012.
Charlie Davis, OVP Connoisseur
Certainly everyone is talking about 2012 continuing to be all about HTML5 and open standards so videos can play across all devices. It seems every OVP is pushing this as a differentiator for their platform. Important as it is, in 2012 OVPs are going to need to start thinking about other ways to differentiate their offerings if they want to stay relevant in the space as it becomes more commoditized. My big prediction for 2012 will be “diversification.” Though there are many paths that this can take, 2012 will usher in the era of innovation as OVPs start to go beyond the current online video experience and think of new ways to “engage” the viewer. As it has been said, “It isn’t just sit and stare anymore.” Look to what creative agencies like Tremor Video and Innovid are doing in the ad space for some examples. Then look for engagement analytics to become more relevant as Marketing Automation companies leverage this burgeoning approach. Brainshark’s partnership with Marketo this past summer is just the beginning.
Doug Broomfield, SVP Customer Success & Professional Services, Veeple
Youtube went live in Dec 2005, which is only six short years ago. It’s fair to say that this date is a good point of reference when talking about the start of this industry. In this space of time, we have seen massive adoption of video by online businesses, publishers and media companies, and the appetite for consumption has matched this. We have seen a huge shift in advertising spend online along with new and innovative methods of delivering these ads. Online video is also becoming an e-commerce necessity, and with this growth the cost of bandwidth has been trending downwards. When looking at the online video landscape, you can see it is made up largely by three main service providers: OVP’s, CDN’s and Ad Networks. I think in 2012 we will see much more consolidation between these providers as the number of competitors vying for a piece of the online video pie cannot sustain themselves at current levels. This will be good for the end users, as they will have more services available from a single provider. Finally, I predict that Google will make an entry into the Enterprise segment of the market through an acquisition.
Ian Snead, VP Sales and Marketing, vzaar
Why OVPs Should Give a Puck
“A good hockey player plays where the puck is. A great hockey player plays where the puck is going to be.” – Wayne Gretsky
The rapid growth of online video industry is one the biggest stories that continues to write itself. Major developments of the past year shape the future and the tools we use to collect and share information. As our connected lives intersect on the web, living room and mobile, we’re moving away from traditional methods, static pages, formats and styles to fully “immersive HD experiences”.
Rather than reading and clicking, viewers now want to see and experience. The presentation layer is about storytelling and for video to move forward in 2012, the OVP industry should pay attention to the three I’s: immersion, integration and implementation.
Immersion – It’s time to go beyond the frame, box, blog and immerse ourselves in storytelling. People want to personalize it and interact with the stories. Applications that offer seamless HD video experiences across the web, tablets and mobile devices will inspire storytellers to expand their narratives to reach every audience. Second screen and web back channel applications will set the pace for great opportunities, innovation and growth in the coming year.
Integration – While video has seen astounding growth over the last year and is predicted to be over 90% of the Internet traffic in the next few years, it’s still a second class citizen. We still have multiple files, formats, players and countless work arounds to make video work. OVPs need to support immersive experiences through an integrated approach and offer value added forward thinking services to differentiate themselves.
Implementation – No matter how good your integration is, it’s only as good as your implementation. It comes down to user experience and user interface. Producers and publishers are looking for consistency across all platforms and devices. OVPs need to execute on products and services and keep an eye on where the puck is going to be, not just where it is.
Acknowledgment: A big ups to my pal @zbutcher for the inspiration on this post.
Living room + tablets. With Google’s impending Ice Cream Sandwich update to Android, we expect Android tablets to become more appealing, and offer a compelling alternative to iPad. Additionally, next June, we expect Google to announce more initiatives at Google I/O relating to Google TV. We’ve been using the Honeycomb update to the Logitech Revue, and while we wouldn’t say it’s a game changer, it does offer a good peek into where things are going.
With all that, here’s some summary of how we expect to serve customers over the next year.
- Publishers want a way to be everywhere without having to rewrite their rules on video production. We expect them to supplement their current workflow with additional tech to get their video on iOS, Android, and to set-top-boxes.
- Small and mid-sized publishers still haven’t found a really good way to extend their reach to multiple devices.
- Next, we hope to see ad networks tailored to different experiences. We’d hope that the ad networks would see an opportunity which hasn’t been properly exploited in reaching users via Roku. We’d expect them to be able to charge higher CPMs, given that the user is experiencing an ad in their living room, in a way which they’re used to.
Robert Kohler, Founder, Castfire, Inc.
Ultimately, I believe enterprise software has to become more accessible and easier to use. To that end, I expect video publishing and sharing tools to rapidly evolve in that direction. For example, we’ve just rolled out a new consumer service, Givit, which makes it easy for people to share video privately with friends and family from any device to any screen. I expect to see similar innovation in online hosting services for ad-based and paid-access content — that is, a shift more towards consumer-friendly publishing, sharing and monetization tools.”
Greg Kostello, President and CEO, VMIX
I hate to do prediction pieces. When future becomes past, I look back at the areas where I was right and chide myself for not going all in. And where my predictions prove woefully off the mark….well, who wants to provide that kind of fodder? Rather than using my gut — or using some animal’s guts (à la Roman extispicy) — I’ll turn to my trusty Online Video Magic 8 Ball.
<shake, shake> Tablets and souped-up browsers will grow in popularity, but Flash video will still trump HTML5 video.
<shake, shake> The winnowing of OVP companies will continue. (But Kit Digital won’t buy most of the them!)
<shake, shake> The winnowing of OVP companies will continue. (But Kit Digital won’t buy most of the them!)
That’s the problem with the Magic 8 Ball. You see the same things over and over. One last shake….
<shake, shake> NetFlix will find Amazon to be an incredibly formidable competitor.
David Wadler, CEO, Twistage
That wraps up our look back on 2011 and forward into 2012. We hope you have a safe and happy holiday and a prosperous new year. Peace from the VidCompare team!