One of my favorite financial writers is a hedge fund manager named Doug Kass, who writes for TheStreet.com. Each year, he publishes a list of potential surprises to watch out for in the next year. Generally speaking, they are events that have a reasonable chance of occurring, and if they did, would be total surprises to the majority of investors, because they go completely against common thinking. It's a fascinating exercise, if only to test your assumptions and see how prepared you are for the proverbial Black Swan.
Therefore, in the spirit of closing out 2009, here is my list of potential surprises in online video for 2010. You may find yourself in complete disagreement with some or all of them. And that's the point. If the entire industry is leaning in one direction, what will happen when and if the opposite occurs?
1. There will be an uptick in brand advertisers entering the online video space, quickly. It will occur early in the year, and will cause a large inventory shortage. Publishers will be left with a supply issue, just as they have been in late 2009.
2. Pre-roll will continue to dominate. No innovation from Hulu, YouTube or Vivaki will prove as effective as a 0:15 or 0:30 coupled with a companion ad. YouTube gains massive market share with its abundance of pre-roll.
3. The rollout of VAST will be championed by the IAB and member companies in early 2010, but fizzle out completely due to lack of publisher adoption. Little to no progress will be made. We will still be complaining about lack of standardization at the end of 2010.
4. Hulu will attempt to charge ever-higher CPMs, but also begin to see more competition from NBC and Fox as premium video outlets. It will begin to lose share gradually, and then quickly, by mid-2010.
5. A company with game-changing video technology will emerge. Someone other than Google will buy them, setting off a wave of consolidation in the video player and technology space.
6. Many of today's display ad networks, being squeezed out of the space by Right Media's discontinuation of DMX and DSP strategies, will reinvent themselves as video ad networks.
7. National TV broadcast buyers will recognize the opportunity in online video in late 2009 and will begin taking the lead in digital video buying and planning. The entity that will take the lead will not be Hulu, but CW, with its ideal audience and video-rich site.
We'll check in late in 2010 to see how much of these, if any, ring true. If even one does, 2010 will prove to be quite a year for online video. Have a great holiday season, and I'll be back in January!