Digital and streaming video continues to accelerate at a rapid pace, both in terms of consumer adoption, advertiser adoption, and technological change. If the news that has already trickled out of the Consumer Electronics Show in Las Vegas is any indication, 2019 is already poised to be a big one for the world of video.
With a young, engaged audience, esports presents a new opportunity for advertisers and marketers looking for the next generation of sports fans, but the relatively nascent genre also brings pitfalls and risks. So teams, platforms and measurement companies are seeking to professionalize, giving marketers with more opportunities and more data, to better integrate their brands into esports content, and to provide a better return on investment.
"It is clear to us that consumers are not going to stand for 16 minutes of ads per hour," Scott Rosenberg, the GM of Roku's platform business, says.
As YouTube makes its premium shows more widely available, marketers are increasingly realizing they don't just have to place their ads next to premium content -- their ads can be the premium content.
For technology-driven video companies like Netflix, Hulu, and YouTube, the product is the platform itself -- the delivery mechanism for the content. These companies have engineers that number in the hundreds (in the case of Netflix and YouTube, in the thousands) perfecting it, iterating it, and improving it.
Legendary cable investor John Malone says Netflix's head start and some key technical advantages from Apple and Amazon mean Disney will need to work overtime to catch up.
"There is a whole generation that expects to see their media [online], they expect to see it on their phone, they expect to see it on their tablet, they expect to see it on their computer. It is a completely different mindset. They don't watch 'Saturday Night Live' the way we watch 'Saturday Night Live,' they are looking at the clips throughout the week," he adds. "My experience is that I come into the office and all the young people are looking at the clips from the late night shows. They are seeing it on their time."
At the heart of streaming's future is the question of commercials. Netflix dominates long-form video and has no ads. CBS All Access and Hulu both offer tiers with almost no advertising. What does that bode for the space?
Hollywood's transformation is reflected in a physical manifestation of the video marketplace, with the biggest houses still owned by legacy media and streaming and tech companies on the rise while linear is on the decline. Business is booming in Hollywood -- and it only seems to be getting better.
While the technology is there, and the consumer sentiment appears to be strong, if there is one thing holding back broadcast's shift to OTT it is the business model. Streaming bundles don't have the profit margins that cable and satellite bundles have, making their long-term futures muddied.