Sunday, February 21, 2010

Online Video Gets Serious in 2010, and it's only the Beginning

With almost two months into 2010, the daily news feeds have been filled with updates on the online video space. From funding announcements, M&As, new product and service rollouts, broad market expansion, rapid innovation, and consolidation within the space — it's an industry that is maturing into a serious business, as both the consumption and production of video on the web transitions to mobile devices and broadband-enabled televisions. According to comScore, over a billion videos were consumed daily in December for whopping 33 billion views in the US, and there's no sign of it slowing down. Leading online video platform providers have expanded into new markets, and enhanced their cloud-based video SaaS offerings for delivery to all consumer electronics devices.

But with all the push, there's also been pull and with any market — startups rise and fall, and supply and demand dictate the terms of who survives in the changing environment. Advertisers are still not convinced that online video is the holy grail, and according to eMarketer, companies have yet to convert their spend of about $70 billion they're currently spending on TV advertising to online advertising.

More signs of compression within the space were seen last week, when we saw the first online video platform literally put itself on the auction block, with SesameVault selling itself on eBay (item 160405185640) with a starting bid of $500,000, with no takers so far. In addition, Ryan Lawler reported on the fall of Move Networks as Fox dropped Move Networks for Brightcove, Adobe Flash, and Dan Rayburn covered the news that Swarmcast laid off half of company, and changed focus to target CE devices.

On funding trends, Will Richmond has been tracking the money flowing into online video companies and he called February "a red-hot month" for online video financing. He noted financing rounds just in the last week for Clicker ($11M), YuMe ($25M), TidalTV ($16M) and Vook ($2.5M), adding to those previously announced: ($1.25M), IVT ($5.5M), Voddler ($3.5M), BrightRoll ($10M) and the big whopper of the month Ustream ($75M) though in two tranches. In 2009, he tracked 64 companies which raised close to $470 million, and so far in 2010, the total funding is just short of $150M.

The momentum is building for paid video content models and battles lines are drawn between HTML5, Flash, Silverlight and H.264, and as Brightcove CEO Jeremy Allaire said, the future of web content and mobile apps is really about the Internet’s dominant platform companies — Apple, Adobe, Google and Microsoft — trying to push their value proposition for broader adoption, and we've only seen the beginning.

Before the year marches on any further, here are some highlights of significant online video news stories so far in 2010.

Industry News, Online Video Advertising and Marketing
Online Video Platform and Related News
The State of Online Video
Update 2/22/10 - In an article today, Digital Marketing Guide: Video - Advertising Age - Digital, Michael Learmonth noted that spending on web video advertising may increase by 50%. eMarketer and Piper Jaffray are putting the online video advertising market at or around $1.5B, up from $1.1B in 2009.