The following is Part 2 of our interview with James McQuivey(Ph.D.), Vice President and Principal Analyst at Forrester Research. In Part 1 of our interview, we covered some background on James as well as some of his thoughts regarding the future of video consumption.
In Part 2 (below), James discusses the future of online video monetization, video discovery and video search, and a concept that he has coined, “OmniVideo.”
Below is Part 2 of our Interview with James:
You recently wrote that even though the economy is in the crapper online video will see a boost, what makes you think this will happen?
The best online video is free. People like free. Especially now. The troublesome clouds I see on the horizon for online video are not the result of the economy, they’re the result of hasty removal of content that used to be available. Like CBS.com taking Big Bang Theory and The Mentalist off CBS.com and its affiliates. This suggests that there is dissent in some organizations, whether CBS or Warner Brothers Television. Maybe even with the Screen Actor’s Guild. They don’t want to miss their share and they’ll insist on content coming down until the get their piece.
What are your thoughts on recent announcements by several online video sites to include subtitling in order to increase search engine optimization and accessibility for online video? Do you see this trend continuing to expand to other sites or into a cottage industry in the future?
Whether you subtitle video directly or whether you let speech-to-text engines parse the words automatically — either way, you need your video content to be searchable. Not just searchable, but indexable, meaning that you know the word “hockey mom” was spoken at exactly 1 min 32 seconds so you can scan right to it.
We see some great examples of this today, but it’s not happening on a large scale. And it probably won’t until a year or so from now because people are going to focus on things that bring in easy ad dollars — like new ad formats, ad interactivity. Then they’ll recognize that improving video speech recognition will help their improved ad environments scale up to more viewers and that’s when they’ll prioritize it.
What can you share, if anything, about the power, growth of, or any other comments regarding how online videos are discovered via search?
Search is the number one way people say they find videos. But we also know from our in-depth surveys that people also stumble across a lot of video accidentally. And, remarkably, they watch it, even though they didn’t expect to have to make time for it.
One of the keys in the future of video search is that while it’s fine for people to find a video via search that they were looking for, it will be even more powerful if search can help people find — and easily consume — video when they weren’t looking for video in the first place. In that scenario, the video has to have some way of letting people know whether it’s going to be worth their while. So search isn’t just about finding the right video, it’s about providing the right communication around the video so people know which videos are worth their time.
Where do you see the monetization of user-posted video heading? More interestingly, where will that money be coming from?
That report in March of 2007 started with the assertion that in the linear world, two-thirds of all money spent on video was spent by advertisers, only a third was spent by consumers directly — and most of that to cable and satellite companies where arguably consumers are not spending on video, but on network hardware. Similarly, advertising will be the life blood of online video, whether professional or user-generated. In the user-generated world, the fact is that most of that video is not as interesting to advertisers. It doesn’t engage at the same level as a great episode of House does. So will they advertise adjacent to it? Yes. But at a lower CPM. But the sheer volume of user-generated content suggests there’s a way to make some money from it if you can monetize at scale.
Have you noticed a large shift in advertising money away from broadcast television and into the online video arena?
No shift away from broadcast TV just yet in favor of online video, even though in our surveys, advertisers keep threatening to pull dollars from TV. But they haven’t done so yet — TV advertising is still enormous. In fact, it helps online video tremendously because people in the TV advertising world can understand online video a lot better than banner ads. They feel more comfortable opening their budgets to online video because it feels like TV.
What are your thoughts on the future of video marketing both online and out-of-house?
One of the most important topics I have my eye on for the future is what I call OmniVideo — a scenario in which you have access to all the content you could want, through any device, in any location. There are many ways for that to happen today, but all of them require a tremendous amount of money and patience as well as an engineering degree. But the future of video delivery will gradually change that.
For example: today you can hack your Apple TV to make it show online video from Hulu. Some hackers are even working on ways to get the AppleTV to stream Netflix though it appears the weak processor on the AppleTV might not be up to snuff. But you and I don’t want to hack something. We want to buy something and turn it on. So imagine that next year Roku announces a relationship with Hulu to stream content to a $99 Roku box. Suddenly, you have a replacement for a DVR. Then imagine that Hulu builds an iPhone application so you can have that same experience with your phone. Both of those steps are feasible today — it’s just a question of business model priorities for those companies.
But if they happen, say, a year from now, you have a Hulu experience that you can watch on your TV, your PC, your mobile, all synchronized around your favorites, your recommendations, etc. That’s the future of video. Video from anywhere, to anywhere: OmniVideo. That’s why my blog is called OmniVideo.
Sincere thanks to James for his time and valuable insight into the industry. We highly recommend that you visit James McQuivey’s personal blog – OmniVideo.
Back in November, James did a guest webinar for Ooyala regarding the impact of online video syndication and monetization. This was a great webinar. Here is the video: