Finding creative methods to monetize the anticipated growth from online video traffic has been somewhat complicated by confusion over the primary momentum of over-the-top (OTT) video that is being increasingly viewed by consumers.
Initially, the PC was the primary screen where Internet video content was being viewed. That said, as the market matures beyond the early-adopters, Internet-connected digital televisions are starting to go mainstream.
iSuppli forecasts that the total number of Web-enabled sets will grow to between 88 million and 90 million world-wide by 2013 -- representing 40 percent of the television market. Apparently, there are already over 90 TV models on the market that are Web-enabled, and more being introduced at CES in January.
The content supply-side is also evolving. When traditional big-budget producers, such as movie studios and broadcast TV networks, utilize direct to consumer OTT delivery models the content origins and usage patterns are relatively apparent.
In contrast, the so-called long tail of low-budget video is often misunderstood. Questions about the viability of business models seem to be frequently based on erroneous assumptions. Many still believe that a multitude of short amateur videos are driving the YouTube phenomenon.
However, a study last year of YouTube video viewer patterns indicated that the vast majority of traffic was actually being focused on a select group of Prosumer content producers who have attained a relatively high degree of popularity. The top one-percent of these videos are viewed significantly more times than the remaining 90+ percent combined.
The implications of this finding could be significant indeed, as pay-TV service providers evolve their forward-looking video services strategy. There’s compelling reasons to further research the segmentation of online video consumption trends, and thereby gain a better understanding of the future impact on service provider network demand.
Cisco has already been active in this regard, with the establishment of the Video Networking Index, and the launch of network core and edge solutions that enable service providers to prepare a proactive – and in some cases preemptive – approach to addressing both the challenges and opportunities that are inherent within the video services arena.
The market for video content will likely continue to fragment. Moreover, it’s already apparent that there’s lots of granularity in between the two extremes of professionally produced high-quality big-budget video entertainment and low-quality zero-budget novelty videos that are uploaded daily to the Web for people’s amusement.
If an impromptu video of a bulldog on a skateboard can reach nearly ten million views on YouTube, then just imagine the upside potential for truly engaging long-form Prosumer video productions that are based upon meaningful storylines.
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