We’re All Video Companies Now
- View Original
- May 11th, 2015
Now, of course, YouTube is a juggernaut, the third most visited site in the world. Video has become essential to the online experience: We watch. We binge. We share. We have Netflix, Amazon, Vine, and Vevo. And we consume a lot of it.
In the past year, though, something new has happened. Video has moved well beyond dedicated video sites, pervading so many of the other services we use each day. Facebook, which started pushing video in a big way last year, launched its own embedding platform in March, shortly after Twitter embraced video. Publishers like BuzzFeed, Vice, The Wall Street Journal, Yahoo, and AOL, to name a few, have aggressively expanded their video teams, too.
And now comes Spotify, which, according to a report last week, is the latest digital media company with dreams of incorporating video. The streaming music service is far from alone in this. Reddit, Gawker, and Refinery29 also announced original video ventures in recent weeks. (Spotify declined to comment.)
As millions of people—many of them young, and inclined to engage with video—are tuning in, these new video companies, or in some cases platforms, are poised to make boatloads of money. And, in the long run, high-quality videos available everywhere, from everyone, could make the Internet as a whole better by making it more like TV.
The simple fact is, people love watching movies and videos. Last month, Facebook announced that its users view four billion videos a day, up from just one billion in September. BuzzFeed has developed an enormous following for its original content, which generates 950 million video views a month. (YouTube, on the other hand, says it gets, loosely, billions of views a day.)
The Rabbit Hole
These videos can be captivating, even addicting, encouraging regular viewers to stick around longer, to check out new clips, and share them with their friends. How many times have you clicked one YouTube video, only to find yourself, an hour later, way down a rabbit hole? Everyone wants a piece of that. “People look to Spotify to be entertained, not just for the music,” explains Jay Frank, the CEO of DigMark, a data-driven entertainment consultancy focused on streaming. That’s true for many social and news sites, too. “Adding in features to enhance that entertainment fits perfectly into their gameplay.”
And where there’s people, there’s money. Advertisers have started to divert some of their notoriously lucrative TV ad budgets into digital video coffers. “Consumers overwhelmingly want to watch more digital video, so advertisers are eager to spend there,” explains Anna Bager, the Interactive Advertising Bureau’s senior vice president of mobile and video. Last year, digital video raked in $3.3 billion (excluding mobile), and Bager expects that number will keep growing. (For perspective, the American TV industry brought in upwards of $70 billion in revenue last year.)
For many media companies, like Spotify, turning a profit is notoriously difficult. Moving into video is therefore “a very sensible move,” says Andrew Sheehy, chief analyst at Generator Research, which follows the streaming industry. Lucrative video ads are a new way to generate revenue, and lots of it. Videos force viewers to fully engage (i.e. you’re actually looking at it, unlike, say a banner ad, which is easily ignored), so advertisers will pay top dollars to be a part of them.
The Little TV In Your Pocket
As social, news, and entertainment sites shift increasingly into offering video, the Internet could become a slightly different place for you. “Cell phones are like carrying around a little TV in your pocket,” says IAB’s Bager.
Or, rather, it’s better than TV. YouTube, Netflix, BuzzFeed, Spotify, and the myriad other high-quality video offerings online all mean you, the viewer, have a veritable smorgasbord. You can pick and choose what you like, play what you want. More options will abound. Spotify may be the new MTV, but this time it’ll be all about you.