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New Video Frontiers: Taking It Beyond the PC

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—User-generated content gains enough popularity to pull eyeballs away from traditional premium content, shifting some power away from the studios.

—The market pie of opportunity expands so much that old and new players hold on to power, including all content generators, device manufacturers, and service providers.

—Mobile operators find their power increasing as they negotiate for more content and advertising dollars and control more hours of the content-viewing experience.

—Advertisers gain more power because the path to monetization of video content remains heavily weighted toward advertising.

—Telcos gain power as service providers because their all-IP network more readily enables a ubiquitous content experience.

—Cable and satellite providers lose their hold on providing services to consumers and become dumb, fat pipe providers. Content holders and those who provide channels of content, be it the traditional networks or emerging networks, will happily bypass the middle-man service provider to get content directly to the consumer, negating the power of traditional and new service providers.

—Power shifts to new players, such as Apple, Google, Microsoft, and others.

While user-generated content is quite popular—and YouTube, which consists of mostly user-generated content, broadcasts 17 times the number of streams of its nearest rival, Fox Interactive Media—premium, quality content will always be king. Quality brings in money, even if garbage can bring in consumers. According to Steve Robinson, CEO of Panache, an advertising technology company specializing in delivering content into new video networks, although more than 50% of video content is consumed on YouTube, 96% of monetization goes to network-related sites, where more traditional, premium content can be found and legally consumed. As Brendon Mills, CEO of video transcoding hardware company RipCode says, "If you make good art, then you can succeed as a content provider, regardless if you are traditional or new and regardless of what network and device your content is for. But historically, art needs patrons. Who are the patrons of the new age of content?"

So far, the patrons of content continue to be those with deep pockets and ties to traditional content delivery networks—and it’s hard to imagine that changing dramatically within the next 5 or so years. This is particularly true if the networks continue to innovate on ways to aggregate and get content online, much like Hulu does today. Seemingly outside the establishment and offering at least some unique content compared to the partner companies, the online network has been a successful example of innovation.

Lessons From the Past, Trends for the Future
One emerging content area (once predicted to be the raison d’ĂȘtre of internet video but now starting to flounder) is long tail content, which is typically content that is very much focused on a narrow topic, be it a particular sport, language, or ethnic group. The power of IP was supposed to make such channels cost-effective to deliver, even to tiny audiences. In reality, long tail content is anything but the driver for the video growth we’ve seen. According to Robinson, long tail content is proving to be like the Pets.com of the dot-com boom—what seems to be a unique and improved way to deliver something to the consumer turns out to have limited appeal.

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