TV, movies still drive online video

User-generated content (UGC) or more broadly speaking, short-form video (from services such as YouTube and Dailymotion), has become far more than cats playing the piano, according to ABI Research.

The firm notes that companies are using viral ads to extend brands and reach a wider breadth of customers than traditional media channels. Professionally-generated short-form content also allows consumers to view video (e.g. news) in bite-sized manageable chunks, ideal for today’s hectic lifestyle. The revenue potential for short-form video is expected to approach $13 billion by 2019, carrying a six-year CAGR of 18.5 per cent.

According to Practice Director Sam Rosen, as the overall online video market evolves, ABI Research anticipates the value for short-form video will rise in kind. “Multi-channel networks (MCNs) that work with content contributors and advertising agencies targeting services like YouTube are finding suitors and partners among some of the largest industry players in video. While much of this is linked to preparations for the future, these are aggressive steps forward that could help define the what, how, when, and where we watch content,” he advised.

In the greater context of the online video market, which includes OTT content (mid- and long-form content) and short-form video, the latter’s share of the market is expected to decline, but this is attributable to stronger revenue growth opportunity from OTT services such as Netflix, Hulu, and VUDU, which often generates more revenue per play. Overall the online video market is expected to reach over $56 billion by 2019, with a six-year CAGR of 23.1 per cent.

“Subscription services such as Netflix continue to headline the market, but EST in North America is starting to gain momentum,” added Senior Analyst Michael Inouye. “While initiatives like UltraViolet continue to make progress, many still view the market from a service-centric point of view, leaving opportunities for companies to try differentiation strategies to win consumers. The landscape for video is shifting, but so far it continues to move at a steady pace, rather than in seismic shifts.”

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