The State of Online Video 2016

Article ImageAll the world's a stage," Shakespeare famously wrote. But if the Bard were alive today, he'd likely write, "All the world's a screen," considering how ubiquitous online video has become on digital canvases big and small. As if you need further proof that online video has conquered consumers, ponder these timely stats: The time U.S. adults devote daily to viewing video on digital gadgets (PCs, mobile phones, over-the-top [OTT] and game consoles, and other devices) has risen from 21 minutes in 2011 to 76 minutes in 2015, based on data published by eMarketer last April. comScore Video Metrix data shows that nearly 195 million Americans watched online videos on desktop PCs last September, and Ooyala's "Global Video Index Q2 2015" report reveals that 44% of all online viewing occurs on mobile devices. And in a recent white paper ("Visual Networking Index: Forecast and Methodology, 2014-2019"), Cisco predicted that, by 2019, consumer internet video traffic worldwide will comprise 80% (compared to 64% logged in 2014) of all consumer internet traffic.

"Today's users seek online video content on the screen of their choice. They should be able to access the video anywhere and virtually anytime they desire," says Matt Smith, chief evangelist for Anvato. "The models may vary, but every screen is the new normal."

The new normal also includes more "snackable content" in the form of shorter videos that cater to smaller consumer attention spans. To wit: Snapchat, which limits user videos to 10 seconds or less, now has 6 billion video views per day.

"Today, more fragmented audiences also continue to drive demand for better video content," says Jason Lucas, executive creative director for Publicis Seattle. "And brands want better continuity within message on a variety of platforms while keeping up with insatiable demand for online video."

Online video in the B2B world nowadays means content is made to be watched, presented, or engaged with on a permanent website and "made to be part of a distribution plan that may include dissemination by email, social media platforms, paid SEO campaigns, organic digital content, and more," says Kathy Berardi, online video producer and founder of Red Clip Video.

Jayson Dubin, CEO of Playwire Media, adds that transparency is a hot-button issue today. For example, players in this space "want more of a guarantee that people are actually watching video advertisements," he says.

The Year in Review

Numerous events unfolded in 2015 that proved to be significant developments in the realm of online video. One of the biggest trends, of course, involved the increased growth of OTT/streaming services, including HBO GO, Showtime, Starz, Sling TV, CBS All Access, Verizon's go90, and Comcast's Stream. The stakes are high. In its "Prospects for Premium OTT in the USA" report, Ooyala forecasts that revenues for premium OTT services such as Netflix are expected to grow from $4 billion in 2014 to as high as $12 billion in 2018.

"The biggest development affecting online video in 2015 was the direct-to-consumer business model for major content owners, which, for the first time, are embracing the OTT revolution," says Jason Thibeault, senior director of marketing strategy at Limelight Networks. "The growth of OTT providers has demonstrated that consumers increasingly want to consume video content from wherever they are-not just the family room couch."

"When Apple aligned the Apple TV operating system to the rest of its OS family-thus enabling developers to create apps like they do for other platforms-they upended the market. Netflix and Amazon Prime now become just an app, Roku gets displaced, and integrating Siri with Apple TV enables voice-based searching and interaction," says Thibeault, who believes that when Apple launches its OTT subscription service in 2016, it will become the most powerful gateway device in the living room.

Live streaming picked up momentum over the past year, as evidenced by the fast success of mobile apps such as Periscope and Meerkat. "These types of applications are going to gain in popularity, and digital marketers will undoubtedly be looking at ways to tap into these platforms," says Avi Levine, executive director for the Digital Professional Institute. "YouTube has given everyone the chance to be a content producer, but letting people broadcast in real time via live streaming is a game changer."

Many experts point to Facebook's renewed focus on taking video share from YouTube as a major story during the past 12 months (Facebook tallied 8 billion video views a day in November, up from 4 billion views logged in April). "If Facebook is planning to make video native to its platform, they'll pull views away from traditional video sites, which could have a massive impact on video publishers-even making them beholden to Facebook for views," Levine says.

Underscoring how pervasive online video watching is on mobile, T-Mobile announced in November that streaming video content from major providers such as Netflix, HBO, and Hulu will no longer count against subscribers' data caps. Additionally, streaming-optimization technology improved in 2015, leading to less buffering and higher sustained online video quality. Advancements such as perceptual filtering now "allow content distributors to reduce the file size and bitrate of the video they deliver up to 20% or more without loss in video quality," says Mark Donnigan, VP of sales and market development for Beamr.

A Look Ahead

Peeking forward into 2016 and beyond, it appears that the challenges are as plentiful as the prospects for those invested in online video. "Online video quality must continue to improve through better compression and delivery technology, until the experience is the same as terrestrial broadcast," Thibeault says.

Donnigan and others expect a greater embrace of OTT/streaming service providers in 2016. "Currently, their delivery efforts are largely limited to TV everywhere solutions, but the trend toward standalone streaming services like Sling TV is just the beginning," says Donnigan. "It's clear that the traditional pay TV service packages will be broken up or splintered off. But rather than let outsiders fragment off a portion of their revenues, pay TV suppliers will experiment with disrupting their own businesses with standalone streaming service packages designed to be played on any modern connected device."

Dubin, who estimates that only 10% of digital publishers actually offer online video, anticipates that number will double or triple in 2016, as "younger consumers expect to receive their content in this format, and brands will grow their inventory of customized video content to reach these audiences."

Moving ahead, you can also anticipate that more publishers and programmers will "move away from client side playback and ad requests in favor of server-side approaches to circumvent the threat that ad blockers propose," says Smith. 

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