Futurewatch: Media & Entertainment
Consumer Video-Sharing sites
Consumer video-sharing sites are built around user-submitted video, although they are starting to embrace professionally submitted video. This category has largely collapsed into a handful of players, with YouTube the dominant force. Others in the space with scale include DailyMotion, Veoh, and MetaCafe.
All of these sites are attempting to leverage their traffic into meaningful distribution opportunities for mid- to long-tail commercial producers, though there are no major success stories in terms of revenue. The consumer sharing sites continue to be plagued with the challenges of piracy and the low quality of user-generated content. Some of the 2006 players have been shut down, and others are on the chopping block.
Commercial Video Portals
Responding to YouTube’s growth and the multiple challenges it presents to media owners, as well as leveraging (in some cases) existing audiences, a number of viable commercial video portals are emerging. Within this category there are several different models.
In ad-supported content, there are now destination sites and desktop clients. Both are starting to adopt a business model that is more favorable for media owners, which uses a 90/10 or 80/20 revenue split, with content owners controlling ad sales and getting most of the revenue. The portals include MSN Video, AOL Video, Yahoo! TV, MySpace TV, Hulu, and Comcast/Fancast. The desktop clients include VeohTV, Joost, Adobe Media Player (AMP), and Babelgum.
The other major model is paid content, and while that hasn’t achieved the same momentum as ad-supported content, the players in this category bear some mention. The three notable solutions are iTunes, Netflix, and Amazon, but there are many other players in this space as well.
As commercial content libraries open up in response to favorable economics and business deal structures, these outlets are becoming more important pieces in the "distribution toolbox" of internet TV. However, in a world of open distribution, it will be difficult for the commercial video portals to differentiate with content, so they will have to depend on experience, integration with other consumer services, or other means to create competitive advantage.
Social networks like Facebook, MySpace, Bebo, and iGoogle (with its expected introduction of open social-based features) are in many ways tangential to the internet video market. But as these services become platforms, they are starting to emerge as viable outlets for commercial programming. Because they aggregate so much traffic, they’re hard to ignore for any publisher trying to reach new audiences. We expect they will increasingly compete with consumer video-sharing sites and commercial video portals as focal points for consumer usage of online video.
In many ways, the three relevant platform categories are completely different from the aggregators in terms of their business models and how they are deployed on the internet. Platforms run behind the scenes, making it possible for content owners and programmers to build their own branded websites and control their own distribution and destiny. They operate in a business model that is almost always built around charging for usage of their service in one way or another. In 2007, platforms came of age, and that sets up important trends for 2008.
Internet TV Platforms
Unlike end-user destination sites, internet TV platforms act as operating platforms for online video publishing and distribution throughout the web. At their core, internet TV platforms allow media owners of all sizes to operate direct-to-consumer websites and syndicate online video to aggregators. These platforms gain scale and value as more publishers use them and are increasingly able to act as hubs for distribution, advertising, and programming strategies.
This category, which includes Brightcove, really came into its own in 2007 with several other players including thePlatform (owned by Comcast), whose primary focus is acting as a hosted asset management system and good ingest/output mechanisms; Maven Networks, an online video startup that has gone through several incarnations to get to its current state as an internet TV platform; and Move Networks, whose proprietary client-side player technology is used by several major broadcasters for delivering full-length episodes.
Companies and Suppliers Mentioned