Four Online Video Trends That Will Shape 2016
The following is a guest post from Frank Sinton, CEO of Beachfront Media. It does not necessarily reflect the views of the TV[R]EV staff.
The online video business saw explosive growth and change in 2015, (add link to 2015 trends story), but even the most basic peek ahead suggests 2016 likely will bring even more change. Here’s my list of top trends likely to shape online video in 2016:
1) Virtual Reality. Yes, VR has been a buzz topic for quite a while. The 2016 difference: several major VR companies will release consumer-level devices. Will compelling content follow, and if so, how does it get paid for? There are plenty of questions to be resolved for traditional story tellers, for technology providers, for content distributors and for business models, but VR is pretty much here.
2) Apple Goes OTT. Yes, one flavor of over-the-top programming had a vigorous 2015, helped by TV Everywhere and dedicated apps from companies such as CBS, Showtime, HBO and NBC. But those apps still require an authentication link to a traditional pay-TV provider.
That sort of OTT should continue to grow, if modestly, in 2016. But another sort of OTT is about to take off, one that doesn’t require a link to traditional pay-TV providers. Apple has been expected to roll out its own “TV” service in 2016. Bloomberg just reported that such plans may be on hold for a while because networks are suddenly making it more expensive and difficult to put together. Regardless of timing, when it does arrive, it will be a game changer.
Yes, Sony’s PlayStation Network and Dish’s Sling TV have offered “skinny bundles” for a while. But when the world’s most valuable company gets into the game, things will change. Apple makes markets, and this is a market ready to be made.In a November interview Apple’s Eddy Cue dropped lots of clues about what the company is trying to accomplish: "We want to get to the point where customers are able to buy whatever they want, however they want," Cue said. "We're not fixed into 'There's only one way to buy it.’” Count on Apple to deliver.Apple has already beefed up long-time “hobby” the Apple TV, launched a dedicated app store with more than 1,000 titles and created platform-specific development tools. Apple is finally committing to the platform in a way that it didn’t do before. According to Bloomberg, Apple will focus on that OTT app play and wait out the networks for a live TV bundle. The networks had better hope they don’t wait too long to stake out real estate among the many new online video-viewing options.3) The Bundle is dead. Long live the Bundle? At the same time, it’s worth asking how many standalone apps any user will pay for. Cable cord-cutting continues and price sensitivity there suggests a limited market for $10 to $15 monthly OTT subscriptions.The likely Apple service is one response, but there will be others, testing various business models. I’m betting that a freemium approach will become common for many of these new OTT channels, particularly those based on traditional media content. Consumers are comfortable with the approach, especially if advertising on the "free” side is interactive, intelligent, targeted and inobtrusive. The interactive potential of OTT programming suggests another big opportunity for advertising to evolve.4) Ad-Tech Consolidation. If 2015 was about stamping out bad actors in ad tech, 2016 will be about stamping out the extraneous ones.This will be driven in part by shrinking access to capital, either from weary investors or too-slim operating margins, forcing closures and mergers. Both publishers and advertisers will push to simplify relationships, and big ad-tech players will want to capture more value. Throw in the impact of ad blockers on iOS (and the potential for Google/Android to follow suit in some fashion) and serious consolidation seems near inevitable. To put it simply, if your company doesn’t add value, it’s probably not going to be around much longer.
