The State of Online Video


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Article ImageOf all the routine activities that have become ingrained in our daily rituals-from getting dressed in the morning to eating dinner at night-one is climbing the ranks faster than nearly any other: pressing "play" online.

Indeed, watching internet video has arguably become the nation's favorite new pastime, as indicated by the latest data. In September alone, nearly 189 million Americans-87% of U.S. internet users-viewed 46 billion online videos, the average length of which was 5.1 minutes, comScore reports. One hundred hours of video are uploaded every minute to YouTube. And consumer internet video traffic globally will comprise 69% of all consumer internet traffic by 2017, up from 57% tallied in 2012, according to Cisco.

On PC monitors, cellphones, tablets, and smart TVs everywhere, the pervasive explosion of online video is in ample evidence. Whether it's streaming a favorite Netflix show via a Roku box, sharing a viral video on YouTube with friends, enjoying the latest Vine on a Twitter feed, staying current with world events by tuning into HuffPost Live, or watching product videos before making a Zappos.com purchase, online video has grown to be a multifaceted entity that has undergone rapid transformation in a relatively short time. And smart digital publishers and content providers are paying closer attention as they strategize ways to integrate today's innovative video features into their offerings.

"Not long ago, online video meant a little, square, 500-pixel-wide player embedded within a website," says Mark Trefgarne, CEO and co-founder of LiveRail. "Today, viewers are watching full episode, long-form content in a full-screen environment-but with the benefit that it's delivered anytime, anywhere, on any device and on demand. We've seen major breakthroughs-things like Flash video on the web and mobile video via smartphones and tablets. And that's a dramatic shift."

THE YEAR IN REVIEW

In 2013, the widespread ability to create, upload, share, and consume online videos has energized publishers and consumers alike. The expansion of video content servers beyond YouTube-including sites such as Vimeo, Kaltura, and Vzaar-as well as the rising popularity of "snackable" short-form videos supported by Vine and Instagram, have significantly contributed to this phenomenon.

Trefgarne says we've currently reached an interesting point in the evolution of online video. "Consumers are beginning to think of online video as a true TV-like experience. These changes have set the stage for a revolution in the way content is distributed and consumed," says Trefgarne. "We've seen that consumers are willing to embrace new platforms, that they work technically, and that there is a sustainable revenue opportunity for publishers."

That's because creating videos today is a lot easier and less expensive. Improved compression technology and faster devices to access that technology have resulted in wider distribution and consumption, and the ability to monetize video content through preroll ads and other methods have benefited digital publishers and electronic content providers, says Bryan Wetzel, COO of Skubes.

Video ads, in fact, are becoming ubiquitous. comScore reveals that, in September, 22.9 million video ads were viewed by U.S. internet users-representing one-third of all videos seen online and 3.5% of all minutes spent watching video online. eMarketer estimates that U.S. digital video ad spending will nearly double in just 3 years, increasing from $4.14 billion in 2013 to $8.04 billion in 2016.

However, video ads can be a problem as well as a solution; they are one of several challenges faced by online content providers in 2013 and beyond. "Monetization models and the accompanying measurement for online video are still incredibly primitive," says Russ Somers, VP of marketing for Invodo. "Once a viewer has clicked and publishers have genuine engagement, the publisher ruins the moment by shoving preroll [ads] at the viewer. Even with high completion rates, what you're seeing here is tolerance, at best, not engagement."

Instead, users are looking for content that actually makes their lives better, "rather than hijacking their attention to serve up yet another ad impression," Somers says. "But that won't change until monetization evolves beyond broadcast models that have been retrofitted with web metrics and capabilities."

Other major challenges facing online video publishers today continue to be storage space, copyright concerns, the need for faster delivery models, and limited bandwidth. Additionally, platform and device fragmentation present hurdles for content providers.

"It can be complex, time-consuming, and costly to convert videos into the appropriate formats for each platform and to ensure high-performance, quality streaming on every screen," says Steve Rotter, VP of digital marketing solutions at Brightcove, Inc. "And live streaming can be expensive when you consider the cost of hardware encoders and other related technology. But cloud-based encoding and live streaming video delivery technology have emerged that can alleviate these issues, allowing viewers to enjoy their favorite content without buffering, delay, or other streaming problems."

A LOOK AHEAD

For many, the biggest worry going forward for online video is consumer apathy. "We are hit in the face with streaming video so much, people will become desensitized to it," says Wetzel. "Also, there's the need to make your videos more shocking or unusual so people cannot tune out, which means you have to keep one-upping the last shocking video to get attention."

Nicole Tate, CEO and founder of Media In Action, forecasts that, in 2014, more companies will offer product demonstration videos and hop aboard the online video bandwagon. "I also predict that, as we become a more eco-friendly society that has less time to read, how-to videos will replace product manuals," says Tate.

In addition, prepare for internet video to become much more interactive. "With the introduction of HTML5 and several other new technologies, you will be able to click on videos or items within a video and see specialized information," Wetzel says. "For instance, you'll be able to click on the star of the video's shoes and find out how much they cost and where to buy them." 

In the coming years, it's inevitable that people will only get better at making videos-and make a whole lot more of them, Michael Litt, CEO and co-founder of Vidyard, says. "It used to be that publishers were a bit afraid of video, maybe even as recent as 2 years ago, but there's nothing to be afraid of anymore," says Litt, who cites Rap Genius as a publisher that effectively uses video to interact with users. "Video production is very approachable now, and everybody has a 1080p device in their pockets, so [content providers] have a lot of options."