5 Predictions for Digital Video in 2015

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5 Predictions for Digital Video in 2015

/ Jan 4, 2015

 

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2014 proved to be a transformational year for digital-first video and the YouTube economy. The short-form video world essentially “grew up” and traditional media, major brands, and even previously cynical Northern California investors took notice.

It was easy to see why: 2014 introduced the video content-driven mega-deal. Disney bought leading multi-channel network Maker Studios for up to $1 billion, Otter Media uploaded rival MCN Fullscreen in a deal rumored to be up to $300 million, and European-based RTL Group tried on StyleHaul for a deal that values that vertically-focused MCN up to $200 million.

So, with that backdrop, here are my top five predictions for digital video in 2015:

  1. The pace of MCN acquisitions will accelerate as more studios jump into the M&A game rather than try to figure out this new content platform themselves. Some leading MCNs ripe for acquisition include foodie-focused Tastemade, dance-focused DanceOn, Latino-focused MiTu, sports-focused Whistle Sports, and Collective Digital Studio. (Note: Manatt Venture Fund is an investor in DanceOn and Whistle Sports is a client.)

  1. But the MCN action won’t be just domestic. International becomes a major new battleground in the borderless digital video world. Companies big and small will extend their reach via major partnerships, investment, and M&A. Notable 2014 deals included RTL’s acquisition of StyleHaul, Sky’s $7 million strategic investment in Whistle Sports, and Fullscreen’s partnership with major Indian MCN Qyuki.

  1. Major consumer brands follow suit. For the first time, marketing dollars shift in significant scale from traditional media to more measurable digital platforms. This takes the form of branded content — not just ads. As a result, investors place major bets on ad-tech companies to maximize and measure those spends. We will see a number of significant ad-tech exits like Yahoo’s recent acquisition of BrightRoll for $640 million. Several brands will go even further and invest big to become digital-first lifestyle media companies themselves a la Red Bull, developing and aggregating content. GoPro, Pepsi, and Marriott have proudly announced such ambitions.

  1. Both “traditional” media and YouTube itself are increasingly challenged by this fast-accelerating activity and by new competing video platforms like Facebook and Vessel (which just opened its paid subscription-first MCN kimono). These “off YouTube” platforms will seek to lure content creators with tales of more attention and significantly greater revenues.

  1. Seeing all this activity, and harboring a FOMO mentality, Silicon Valley investors will increasingly make pilgrimages down to LA —  the epicenter of this video content innovation and creativity. After all, even super blue-chip VC Andreessen Horowitz vouched for video via its $50 million investment BuzzFeed. That accelerated pace of investment will only further fan the flames of the vibrant SoCal entrepreneurial scene and the digital-first video revolution.

2014, exciting, transformative times for the media world. And, just a precursor of more (much more!) to come in 2015.

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