By Peter Wilmot, CTO and Co-Founder, Traction Labs
2017 is shaping up to be the most transformative year ever for digital media. Audiences are demanding digital, mobile-optimized content — a space currently dominated by social video. The largest players in publishing, broadcast, and brands are learning to adapt and merge, or face dying in this new digital world. Digital media has been seeing seismic shifts with companies like Verizon and AT&T trying to fight the incumbent duopoly of Google and Facebook, all while upstart Snap Inc. has already redefined how an entire generation consumes short-form media.
But let’s take a step back on how we got here.
Digital viewership is exploding, with more video content uploaded digitally every month than the three major US TV networks have created –combined– in the last several decades. Youtube, the current leader in viewer hours, recently hit 1 billion hours of daily viewership, representing a 10X growth from 2012 when they were at ~100M daily hours. Facebook and Snap Inc. are both growing quickly but are still behind, with Facebook reporting 100M hours as of early 2016 and Snap coming in at around 70M hours of daily video viewership in the middle of 2016.
Simultaneously, traditional TV viewership has been crashing for years. Studies show time spent viewing linear TV over the last five years is down for every age group under 65, led by 18–24 year olds who are spending over 40% less time watching TV. This is contrasted by the growth in time watching TV and video on mobile devices, which is up 85% between 2010 and 2016.
This has resulted in a few major trends:
Marriage of Content and Service Providers
For content providers, the goal is to get their content in front of as many eyeballs as possible to advertise or sell subscriptions. This is not necessarily symbiotic with the telecom networks, who carry the actual data on expensive infrastructure — especially since consumers want content now, wherever they are, and in high definition. But, telcos and carriers have found that their customers will leave their services unless they provide access to the content they want. This creates an environment where content really is king and telcos find themselves forced into partnerships, or risk being left out. Powerful positioning for the content giants has pushed several huge mergers, including Comcast and NBC, AT&T and Time Warner, Verizon and AOL and Yahoo, while pushing tech giants like Google, Facebook, Amazon, and Netflix to push into the telecom space to stay competitive.
Scale vs Monetization
Facebook and other social networks have long held the keys to scaling content viewership, but they haven’t provided monetization for that content. This effectively cannibalizes the publishing ecosystem. As time-on-platform has grown, it has squeezed the actual content creators. The New York Times’ revenue has fallen every year since 2012 and Time Inc’s revenue has fallen every year since 2011. The sale of Time Inc. appears to be imminent this year.
Either creators need to lock down their content, as The New York Times and Wall Street Journal have done, or they need to be effectively compensated by distribution platforms. Facebook wants to keep content coming onto its platform and has reaffirmed its promise to help creators monetize, recently announcing it will be rolling out “mid-roll” video ads on both long-form video and live video content, matching YouTube’s revenue sharing offer of 55%.
Not only is Facebook willing to pay content creators but they are also looking to compete directly with them. Ricky Van Veen, one of the co-founders of CollegeHumor, joined Facebook last year to help scale out its content offering with partners. Veen is now actively out pitching creators for long-form, 30 minute episodic content originals to be run on Facebook. Last year, audiences spent an average of 50 minutes a day on Facebook products, not including WhatsApp. We will continue to see this number grow as Facebook enters the fight head-to-head with Netflix, Amazon, and Hulu, amongst others, in the original content war.
Content Duration Will Be Disrupted
Broadcast content is too long at 30 to 60 minutes, while social content has trended too short at 15 to 60 seconds. There will be more of a convergence towards 5 to 7 minute videos, as short-form content, with substance, grows and expands. We’ve already seen a number of these lengths of videos beginning to emerge on Facebook. This will also be true for the growing live content market with a target duration of around 20 minutes.
Broadcasters Making Bets to Access Millennial Audiences
NBCUniversal has invested in Buzzfeed, Vox, and most recently even invested $500M in the Snap Inc IPO. Broadcasters need to keep expanding into the digital realm, looking for way to diversify investments. They’re also aggressively creating and launching their own content mobile apps.
Widespread 360 Video
360 video content is still somewhat inhibitively expensive to create but we can still expect some really innovative and impressive early movers. This will continue to grow, becoming more interactive and mainstream with VR technology improvements over the next few years.
As consumers, our media viewing habits stayed remarkably consistent for over 60 years. In the last five years, we’ve seen these seismic shifts, but no other year will be as transformative as 2017. It’ll be hard to keep our eyes off the action — literally and figuratively.
Peter Wilmot is the CTO and Co-Founder of Traction Labs, an advanced content marketing platform focused on live stream video. Peter is a veteran of the video technology space with deep experience in programmatic, mobile, native, and live streaming. Traction Labs has worked with numerous Fortune 100 companies, including Sony, Salesforce, and Yahoo.