9 Predictions for
Online Video in 2018
Online Video in 2018
By Jim O’Neill,
Principal Analyst, Ooyala
Principal Analyst, Ooyala
If you haven’t already
buckled your seatbelt for all the changes in the competitive 2018 digital media
and entertainment landscape, do so now! Expect to see more OTT services
launching, merging and, alas, even folding. It’s gonna be an exciting,
G-Force thrill ride, as many chart new courses or entirely change
direction. Ultimately everyone is going to try to get the proverbial
consumer onboard.
buckled your seatbelt for all the changes in the competitive 2018 digital media
and entertainment landscape, do so now! Expect to see more OTT services
launching, merging and, alas, even folding. It’s gonna be an exciting,
G-Force thrill ride, as many chart new courses or entirely change
direction. Ultimately everyone is going to try to get the proverbial
consumer onboard.
What will 2018 have in
store? Here’s my outlook for the coming year:
store? Here’s my outlook for the coming year:
1.
VR
& AR: Is 2018 the year for both technologies?: While Augmented Reality (AR) – driven by
a significant buy-in from Apple (ARKit), Facebook (Camera Effects platform) and
Google (ARCore) – will blossom during the year. The hallmark Virtual Reality
(VR) 2018 event will be the Winter Olympics. This global event hopes to enlarge
the VR-verse (universe) as companies slowly move away from clunky, 3-D style
headgear. In 2018 expect more lightweight, Google Glass-type wearables; and
suits that can make you feel temperatures, and even pain!
VR
& AR: Is 2018 the year for both technologies?: While Augmented Reality (AR) – driven by
a significant buy-in from Apple (ARKit), Facebook (Camera Effects platform) and
Google (ARCore) – will blossom during the year. The hallmark Virtual Reality
(VR) 2018 event will be the Winter Olympics. This global event hopes to enlarge
the VR-verse (universe) as companies slowly move away from clunky, 3-D style
headgear. In 2018 expect more lightweight, Google Glass-type wearables; and
suits that can make you feel temperatures, and even pain!
2.
OTT
continues to grow and the target on Netflix’s back gets bigger: While Netflix continues to generate huge
consumption figures and subscriber growth, “other” OTT services quietly grow
with it. Niche SVOD services that feature the content Netflix doesn’t have,
including local broadcast stations, sports and events (potentially in the form
of pay-per-view specials) will grow.
OTT
continues to grow and the target on Netflix’s back gets bigger: While Netflix continues to generate huge
consumption figures and subscriber growth, “other” OTT services quietly grow
with it. Niche SVOD services that feature the content Netflix doesn’t have,
including local broadcast stations, sports and events (potentially in the form
of pay-per-view specials) will grow.
3.
Cord
cutting continues: In 2016, pay TV
continued to decline when it lost about 2 million subs; and in 2017, losses in
Q2 and Q3 alone neared 2 million. Losses will be higher in 2018, perhaps as
high as 5 million.
Cord
cutting continues: In 2016, pay TV
continued to decline when it lost about 2 million subs; and in 2017, losses in
Q2 and Q3 alone neared 2 million. Losses will be higher in 2018, perhaps as
high as 5 million.
4.
We’ll see an even more mobile world in 2018: Ooyala saw mobile video plays top 58% of all
video consumption in Q3, the sixth quarter of growth in that segment. That
share will top 60% in the first half of 2018 as more wireless operators push
more OTT content – both SVOD and AVOD – to customers and as mobile data charges
decline across the world. There has been similar growth of long-form video
on mobile devices: smartphones are catching up to tablets as the viewing
device of choice.
We’ll see an even more mobile world in 2018: Ooyala saw mobile video plays top 58% of all
video consumption in Q3, the sixth quarter of growth in that segment. That
share will top 60% in the first half of 2018 as more wireless operators push
more OTT content – both SVOD and AVOD – to customers and as mobile data charges
decline across the world. There has been similar growth of long-form video
on mobile devices: smartphones are catching up to tablets as the viewing
device of choice.
5.
Amazon
– Playing new games with sports: Amazon spent a purported $50 million to stream 11 NFL Thursday Night
Football games this year, a drop in the bucket compared to what it may spend in
2018 as it strives to become a next-gen sports streamcaster. Coming up for
auction in 2018 are, among others, rights to English Premier League soccer,
which carried a price tag of $1.3 billion for rights to the past three years.
Amazon also this year cut a deal for rights to stream 37 live ATP World Tour
tennis events to the U.K. and Ireland. The retailer also will have to decide if
it wants to keep Thursday Night Football rights – which likely will
carry a higher price tag this year.
Amazon
– Playing new games with sports: Amazon spent a purported $50 million to stream 11 NFL Thursday Night
Football games this year, a drop in the bucket compared to what it may spend in
2018 as it strives to become a next-gen sports streamcaster. Coming up for
auction in 2018 are, among others, rights to English Premier League soccer,
which carried a price tag of $1.3 billion for rights to the past three years.
Amazon also this year cut a deal for rights to stream 37 live ATP World Tour
tennis events to the U.K. and Ireland. The retailer also will have to decide if
it wants to keep Thursday Night Football rights – which likely will
carry a higher price tag this year.
6.
The
cost of content will reach new heights in 2018: Netflix is planning to spend $8 billion on
content in 2018; Amazon will spend nearly $5 billion, and HBO, $2 billion.
Apple is willing to spend $1 billion or more, as is Facebook – and, if live
sports rights are included, those numbers could grow even more. Content costs
will continue to rise, driven by the competition among distributors.
The
cost of content will reach new heights in 2018: Netflix is planning to spend $8 billion on
content in 2018; Amazon will spend nearly $5 billion, and HBO, $2 billion.
Apple is willing to spend $1 billion or more, as is Facebook – and, if live
sports rights are included, those numbers could grow even more. Content costs
will continue to rise, driven by the competition among distributors.
7.
Traditional
advertising’s slow death spiral: The advertising industry is finally learning that the future is
interactive ads and more sponsored programming: in short, a true sea change in
how advertising is consumed. Look for lighter ad loads on AVOD sites, better
targeting and snappier campaigns utilizing data and new technology.
Traditional
advertising’s slow death spiral: The advertising industry is finally learning that the future is
interactive ads and more sponsored programming: in short, a true sea change in
how advertising is consumed. Look for lighter ad loads on AVOD sites, better
targeting and snappier campaigns utilizing data and new technology.
8.
Data,
Artificial Intelligence (AI) & machine learning will permeate: This year, more devices will use voice
inputs to help you find your content. Apple’s Siri, Google Home and Amazon’s
Alexa all are leveraging AI and machine learning to help you find what viewers
want to watch without having to type in titles, names or genres. AI will help
with more than just discovery and recommendation: Companies will begin to harvest
the fruit of targeted advertising on mobile devices used at home and beyond.
Data,
Artificial Intelligence (AI) & machine learning will permeate: This year, more devices will use voice
inputs to help you find your content. Apple’s Siri, Google Home and Amazon’s
Alexa all are leveraging AI and machine learning to help you find what viewers
want to watch without having to type in titles, names or genres. AI will help
with more than just discovery and recommendation: Companies will begin to harvest
the fruit of targeted advertising on mobile devices used at home and beyond.
9.
More
M&E M&A: It’s unlikely that the
government will ultimately block AT&T’s proposed $85 billion acquisition of
Time Warner: the key will be the assurances by AT&T that its actions will
be fair. That won’t be the only mega-deal: Disney WILL make its deal for
several Fox assets and I predict a 2019 closing. Those deals will likely spawn
additional deals to feed consumers’ insatiable content appetites.
More
M&E M&A: It’s unlikely that the
government will ultimately block AT&T’s proposed $85 billion acquisition of
Time Warner: the key will be the assurances by AT&T that its actions will
be fair. That won’t be the only mega-deal: Disney WILL make its deal for
several Fox assets and I predict a 2019 closing. Those deals will likely spawn
additional deals to feed consumers’ insatiable content appetites.
I’m sure I’m not the only prognosticator
thinking about the year ahead – I’d like to hear what you feel are the biggest
trends to watch for this year.
thinking about the year ahead – I’d like to hear what you feel are the biggest
trends to watch for this year.
About
the Author
the Author
Jim
O’Neill, Principal Analyst at Ooyala, is an
award-winning industry expert and futurist who specializes in the convergence
of traditional TV and the Internet. His focus includes pay TV, Cloud TV, OTT,
multiplatform media delivery, the ecosystem that surrounds it and consumer
trends. He is a frequent speaker at CES, NAB, Digital Hollywood, Parks
Associates Connections events, Streaming Media and Digital Entertainment World,
among others. O’Neill is the Editor of Videomind, which in the past 2 years has
won awards from Editor & Publisher and Digiday.
O’Neill, Principal Analyst at Ooyala, is an
award-winning industry expert and futurist who specializes in the convergence
of traditional TV and the Internet. His focus includes pay TV, Cloud TV, OTT,
multiplatform media delivery, the ecosystem that surrounds it and consumer
trends. He is a frequent speaker at CES, NAB, Digital Hollywood, Parks
Associates Connections events, Streaming Media and Digital Entertainment World,
among others. O’Neill is the Editor of Videomind, which in the past 2 years has
won awards from Editor & Publisher and Digiday.
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