Mobile Had Its iPhone Moment -- What Is Online Video's Watershed Event?
Last week I was talking to fellow entrepreneur Sorosh Tavakoli from Videoplaza, who told me that we've yet to see the online video world's equivalent of mobile’s iPhone moment.
That got me thinking: If the iPhone was mobile’s breakthrough, what will be online video’s watershed event? And will that event be technology- or content-driven?
Indeed, in mobile, we measure time as Before the iPhone or after it. The iPhone didn’t simply shatter the carrier grip on the user [in-]experience, it also ushered in the era of the mobile Web. While the Blackberry paved the way for seamless communications, the iPhone fostered a rich media experience powered by video.
But the iPhone initially represented two steps forward and one step back with the lack of Flash support. Over time, html5 became a standard -- and today, video is ubiquitous on the iPhone, which is, of course, the top-selling wireless device.
When the iPad launched, video “pushers” voiced the same concerns -- namely, a lack of Flash support. But with YouTube onboard as a launch partner, the iPad provided enough video content to make that critique moot. Plus, with many websites seeing the writing on the wall, there was no shortage of video available on the iPad via html5.
With the iPad -- and tablets in general -- outpacing the Web in terms of video consumption, it’s clear that Apple’s money-maker is on pace to redefine and reshape how consumers watch video. If you have a child under 5, the iPad is video consumption central -- a fact that helps online video professionals understand Apple’s stock price of late.
YouTube (and company)
While the iPhone and iPad stand out as a sign of what the future presents, the reality is that mainstream consumers still watch videos online, on the Web, on their PCs and Macs -- and nothing is more popular than YouTube (and Hulu, etc). It’s totally conceivable to see YouTube continue its march into wider consumer adoption to become omnipresent not just with online viewers but broader audiences offline, which takes me to…
While cord-cutting may be overstated, the fact remains, it’s definitely happening -- and YouTube is leading the way. Today there are 9 billions connected devices; Cisco predicts the number of connected devices will reach 15 billion by 2015 and the GSMA predicts there will be 24 billion connected devices in the world by 2020.
Of course, video’s Holy Grail may come through content.
I’ve already stated that I don't think we will experience an "I Love Lucy" moment (partly because the Web is too fragmented for there to be only one such moment) but mainly because we've already had it: Live 8 may have been that moment. Live 8 marked AOL’s coming-out party from a walled garden service to a free, ad-supported property. It also showed that streaming live programming could work.
Investment, finally, in content
YouTube, Netflix and Hulu are all investing real dollars into real content: not speculative revenue-share deals that only benefit the aggregator/distributors, but actual licensing deals that offer upfront dollars to content producers. This will certainly pave the way for a turning point for content producers; but until their investment spawns a real, crossover hit, it won’t account to a real game-changer.
Meanwhile, those pillars of online aggregation -- the portals -- have pressed the pedal to the metal and invested in original content. Yahoo, for example, green-lit Tom Hanks’ brainchild which was gathering dust before it saw the light. The list goes on.
The Huffington Post Streaming Network
Don’t laugh. While Arianna Huffington’s attempt to tackle online video could go either way, it does represent -- with a $30 million investment -- a legitimate attempt to challenge existing cable news franchises at the majors.
Of course, when all is said and done, investors and executives will pour money into online video if -- and only if -- they see returns on their investment, and not simply rosy forecasts which are usually matched.
5Min’s exit was a start, but that was for an aggregator. We’ve seen some exits in content, namely Generate and Next New Networks. Until we see positive exits in the video content space, it’s hard to argue that content is king.
Of course, one deal that may inadvertently have a big impact is the IPO for Facebook, which is a popular video site already but actually lacks a cohesive video strategy.
When in Doubt, Think of the Frog
Change comes slowly and progressively. As such, while it’s easy to credit the explosion in mobile to the iPhone, progress came over time through various advances in hardware, software, and content. Similarly, we may be disappointed if we wait for one defining watershed event in online video. This means that incumbents need to charge ahead, but the establishment can’t sit still. After all, if you drop a frog in a pot of boiling water, it will likely jump out. But if you nestle a frog in water and turn the heat on, it won’t react until it’s too late. Now that got me thinking: In this analogy, who’s the frog?