jthibeault

The Rise of Online Video

Blog Post created by jthibeault on Jun 9, 2015

There’s no question that we are watching a greater amount of video online. Over the past couple of years, online video consumption has grown leaps and bounds, so much so that companies like Cisco predict that by 2019, 80% of Internet traffic will be comprised of video. But that doesn’t answer the underlying question of “why?” Why is video viewing shifting from traditional broadcast to online? Why is it so popular?

 

Thinking about those questions, I’ve broken down the answer into a few “mega trends” (the order reflects how they build upon each other) that have shaped the growth opportunity for online video we see today.

 

Digitization

In the traditional television world, content was delivered via an analog signal and transported via tape. Yet over the past few decades or so (driven by FCC regulations in the United States, for example) broadcast content has shifted to digital. This “digitization” of video has enabled content owners and broadcasters to deliver their goods not only via those traditional channels but through the Internet as well[1]. That means television programming that was largely locked into cable provider networks (or even over-the-air) has been unshackled and can be delivered via websites and applications. Even older shows are becoming “digitized” as content owners convert libraries of material for digital delivery.

 

But digitization doesn’t just speak to the content itself, it also speaks to the means by which content is created. As video capture became digital, the technologies could be embedded into countless consumer devices, not just high-end production video equipment, thereby enabling a new generation of content producers.

 

This trend is the foundation upon which online video is built for without the content, there would be no consumption.

 

Mobility

What if we didn’t have devices through which to watch online video? What if we didn’t even have laptops[2]? Would people move themselves from their couches to their desktop computers just to watch their favorite television shows?

 

Mobility has been a significant enabler of online video consumption because it provides consumers with the ability to watch the content wherever they are—standing in line at the grocery store, sitting at the kitchen table, lounging outside in the hammock. Using a variety of devices, consumers are now capable of “tuning” into their favorite content (via a variety of methods including subscription VOD services and IPTV) no matter where they are thus providing them a significant level of freedom.

 

It’s possible that online video would have grown with the SmartTV market (Internet-connected televisions capable of displaying online video content) but it would never have done so at the pace we see today. Given that there are an estimated 2 billion smartphones worldwide, and consumers look at their smartphones over 1500 times per week, mobile devices simply provide more chances to consume video content. They are with us wherever we go and we use them constantly.

 

Only it’s not just the freedom afforded by the devices themselves. The ability to watch is coupled with the availability of content and mobile networks with enough bandwidth to deliver the video content at a high enough quality. Ultimately, what has happened is the opportunity cost has lowered significantly enough to make the activity of watching online content on mobile devices habitual.

 

This trend enables the consumption of that digitized content more easily than fixed means (TV or desktop computer, both of which are immobile).

 

Cloud

Finally, delivering online video can be an expensive proposition. Between infrastructure and bandwidth, organizations can spend thousands of dollars each year buying, upgrading, and operating the equipment required to deliver online video. Think about it. You can’t just have one media server and a little bit of bandwidth. You have to have multiple media servers (for redundancy and capacity purposes; a single server can only serve so many users) and enough bandwidth to serve unexpected traffic spikes. For many organizations, not only is the CAPEX outside normal operating budgets (even if the organization is dedicated to publishing online video like an OTT provider) but it’s outside the scope of the business itself—operating a delivery network is not often core to a business. For most, it’s distracting.

 

That’s why the cloud plays such a pivotal role in the growth and emergence of online video. Not only can the cloud provide the infrastructure in a scalable manner, but it’s also distributed. Furthermore, the cloud is not located in one place. An organization wanting to publish online video can take advantage of this to reach audiences outside their own geographies.

 

This trend provides the means of execution. Without distributed infrastructure capable of delivering content to every corner of the globe (and to every device), the first two trends might have languished.

 

A Note on Consumer Behavior

Of course, all of these trends in-and-of themselves wouldn’t amount to any sort of wide-scale change if it wasn’t for a shift in consumer behavior as well. The ease by which video can be consumed and published today (thanks to those three trends) has effectively reduced the barrier of entry to zero. With a smartphone and wifi, with a public computer and Internet access, with a GoPro and a YouTube account, anyone can effectively consume or produce video content. It doesn’t “cost” anything once the basic necessities have been met.

 

What Can You Do?

So how do you take advantage of these trends if you are publishing video content?

  • First, you publish everywhere—YouTube, Vimeo, your website, mobile applications, etc. Having your content in as many places as possible ensures the greatest opportunity for uptake.
  • Second, you target mobile. Although long-form content is becoming more popular on mobile devices, the behavior is still to watch short clips. That means get your brand front-and-center quickly with your video so that if a viewer bails out, you can be at least ensured of a good brand impression.
  • Third, you use partners. Building out your own content delivery network (CDN) isn’t hard, but it is CAPEX intensive. And it’s hard to operate. In short, running a CDN is probably not core to your business. Get a partner to help.

 

Conclusion

Video becomes digital. Mobility enables users to consume video content more easily. The cloud empowers organizations to deliver video cost-effectively. Together, these three “mega trends” have created a culture of convenience for online video. Without these three underlying components, not only would video never have been unshackled from traditional television broadcasting, but also people would never have adopted it in the volume they are today. It has ultimately become so easy to publish and watch video that consumers think little of the activity.

 

But this tipping point is far from over. According to Nielsen, traditional broadcast still represents the lion’s share of video consumption. The majority of the developed world still consumes the majority of their video content via the television. But as Millennials and subsequent generations continue to shape the video experience by consuming more content from their connected devices, the shift away from traditional broadcast to online video will accelerate. As Wired puts it, Internet TV will become the only TV.


 


[1] IPTV, the delivery of traditional TV via the Internet, has significantly grown over the last few years (http://www.ooyala.com/videomind/blog/global-iptv-growth-2013-outstrips-all-other-pay-tv-platforms)

[2] According to Limelight Network’s The State of Online Video report, the laptop still reigns as the most popular device for watching content with the smartphone coming in a close second amongst Millennials.

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