Future of online video: Massive but fragmented by multiple devices and user demand

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Jasper Jackson, TheMediaBriefing Experts' Blog, Broadcast

Online video is booming. It's the key driver behind the explosion in online content consumption coming to Europe in the next five years, fuelled by the growth of connected TV and mobile devices

But managing the myriad number of video devices out there is no mean feat - by 2016 there will be more online devices such as games consoles or internet-enabled TVs than traditional TV households in western European living rooms.

So there's a hell of a lot of devices out there, but only three percent of TV revenues currently come from digital, compared to music where 45 percent of revenues are digital. 

All this is according to IHS Screen Digest analyst Richard Broughton, speaking at the IHS Future of Digital Media Distribution conference in London on Thursday, where there were some salient stats and lessons on display for everyone who wants to be big in online video... which is everyone

Sports multiscreen viewing rocketing

Digital sports content distributor Perform has seen some rapid shifts in device uasge in last 12 months, but joint CEO and co-founder Oli Slipper says the shift has all been additive to the total viewership.

-- Slipper says the share of traffic from browsers has fallen from 90 percent 18 months ago to 60 percent now, moving to tablets and smartphone.

-- Connected TVs currently make up a small part of Perform's traffic, but Slipper says will be a big driver for content - at least once Wi-Fi enabled versions become more popular. The firm is currently working with LG and Sony and is shortly set to be available on Samsung SmartTVs.

-- Platform costs: However, he says the cost of investing in different platforms is a burden and connected TV platforms need to consolidate: "Something we constantly tell our investor base is that if there are 20 OTT (over-the-top, internet-based) platforms we want to be on, it means 15 different technical integrations - fragmentation in OTT makes tech investment very onerous. 

"We are willing to do that at the moment and from a consumer perspective, we need to deliver that anywhere. It is definitely suppressing underlying margin at the moment, but bear with it. There will be two or three category winners, but there are return on investment issues at the moment."

It's a mobile device minefield out there

Sorosh Tavakoli, CEO of video ad optimisation firm VideoPlaza, said his firm is also seeing fragmentation across different devices. 

For one VideoPlaza customer, 45 percent of ads are delivered on on IPTV and only a third on PC. Mobile is also big, with 15 percent on mobile but XBox is also a contributor, making up three percent. 

However, while it's a good idea to have lots of different devices for users, for the ad strategy...

"...Do the exact opposite. Offer one audience. Capture all the bits and pieces from iPhone to Sony Bravia TVs, and package as one audience priced in a consistent way for advertisers.

"Otherwise it's difficult to sell your Windows Phone audience separately. Content must be committed to each platform you are developing for developing for, those selling ads against the content have to bundle together the audiences on different platforms."

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