For the first ten years of mainstream Internet use, online media has been considered alternative - an alternative to television, radio, print and magazines. Online media had a limited audience, largely a result of bandwidth limitations, but also because web builders were still figuring out how to use Internet multimedia effectively.
10 years on, broadband penetration in the home is pushing 40% in the US, and is much higher in some areas of the world. Just as importantly, many sites are finding ways to use online media effectively. For these reasons and others, it looks like 2006 will be a tipping point for online media.
10 Reasons Why 2006 Will Be a Tipping Point for Online Media
1. Free media sharing sites are becoming some of the hottest destinations on the web. While some companies have debated how to move into online video, sites like YouTube have captured the interest of surfers, and are becoming popular and influential destination sites.
2. Content creators are experimenting with eliminating network and station middlemen and are delivering content directly to viewers or listeners. A new police drama, Port City PD, is going straight to iPod. The show is a 30-minute, episodic video podcast, made specifically for an Internet audience, and can be subscribed to for automatic download for viewing on a computer or a portable media player. Production costs are cheap, because of inexpensive digital video gear, computer editing and Internet distribution.
3. The poster child for video podcasting, Rocketboom, recently announced that it was getting 300,000 views per day. They also successfully auctioned a week's worth of advertising on the show for $40,000. These numbers are big enough to demonstrate that content producers can create and distribute video independently over the Internet. This is leading to an explosion of new online content.
4. Online media formats are part of many marketers' plans for 2006:
* Video ads - 27%
* Mobile/Wireless - 20%
* In-house podcasts - 18%
* Sponsoring podcasts - 14%
* Product placement in video games - 10%
5. Existing media companies are realizing the benefits of putting content on the Web. "TV programm[ing] over the internet could revolutionize broadcasting, and prompt a wider, cultural shift in television consumption,� according to the BBC's Director of New Media & Technology, Ashley Highfield. The BBC has found that providing video content over the Internet increases the viewing of BBC programs, extends peak-time and builds loyalty.
6. Media companies are announcing major new broadband initiatives. Discovery has introduced a 24/7 broadband TV network; Disney is experimenting with ad-supported Internet television, offering some of its most popular shows as free downloads; and Fox has announced plans to make prime-time shows available via the Internet for free.
7. Leading-edge companies are becoming multimedia content providers. Land Rover, for example, has launched a new 24/7 broadband TV channel. It may seem like an expensive experiment, but taking the leap and becoming an Internet television station is a fraction of the cost of many broadcast advertising options, it provides a targeted audience and is very measurable. The New York Times also recently announced plans to dramatically expand its online video offerings, driven by audience and advertiser demand.
8. Podcasting and video podcasting have moved beyond first-mover adoption. Even relatively staid institutions are jumping in. PBS has announced plans for major news programs to be delivered via video podcasts, and the Pentagon recently added video podcasting to the Pentagon Channel's offerings for military news and information.
9. People want TV to become more Internet-like. "Consumers still want to watch TV shows and movies on a TV, whether the programs are broadcast or downloaded," said Stewart Wolpin, senior consulting analyst for Points North Group, "Getting Web-based content to the TV should be the industry's primary goal and will unlock by far the biggest revenue opportunities."
10. Many see Internet video eclipsing television in the near future. �Video consumption is exploding on-line and on-demand is going to be the dominant way to consume content,� according to AOL CEO Jonathan Miller. �We will see video-on-demand (VOD) becoming dominant in the next few years,� adding that on-demand programming is clearly what viewers want.
Many see online media being at a tipping point in 2006. "I believe history will look back at 2006 as the year of an unbundled awakening in the media world, ushering in an era of creativity the likes of which we've not witnessed in recent history," writes analyst Terry Heaton. "Unbundled media is clearly what people want, and when that kind of energy bubbles up from the bottom, media companies of all sorts have no choice but to respond."
ADDITIONAL RESOURCES
Rocketboom': So what's all the fuss about?
Planned Spending on Emerging Ad Tactics (PDF)
Land Rover Announces Go Beyond Internet TV Channel
Podcasting emerges as an ebusiness tool
New Drama Goes Straight to iPod
AOL Head Says Internet Video is the Future of TV
Getting Web-Based Video to the TV is Where the Biggest Revenue Opportunity Lies
TV News in a Postmodern World
