What The Business Of Video Will Look Like In 2012

In the past twelve months we've seen the first generation of web video business models draw to a close and the emergence of devices and business models that will fuel powerful continued growth in the year ahead. Market experts predict that YouTube won't go out of the UGC business; in fact, it will be the exact opposite. You'll see more creative ways to monetize YouTube, including new partnerships with portal players, third-party ad units, and the emergence of important sponsorship and co-branded pages. It's unclear if YouTube will build these offerings, buy them, or partner with others to provide them. But AdSense text ads for video aren't alone going to fund the future of the middle market of video. Instead, you're going to see some number of business users look to take more control over their content, their ad units, and the community around their media. At the same time, the delivery system for video is very much under construction. The so-called "Over The Top" competitors have had a busy year--with Google TV falling flat, but version two looking promising, and Netflix's Qwickster dying a quick death. At the same time, Boxee jumped into the business of providing digital 'rabbit ears' and Hulu briefly auctioned itself before returning to running the business. And now Microsoft moves to gain OTT dominance with a brand-new Xbox interface and more content deals. So, no clear winner here yet. HERE ARE 5 PREDICTIONS YOU CAN TAKE TO THE BANK: Prediction #1. 2012 is the year all video goes a la carte. Remember all the promises of a new 'a la-cart' cable world, where consumers had choice and freedom? Well, you have to hand it to the cable guys, they've been able to keep that commodification of their product just out of arms' reach for as long as anyone can remember. Prediction #2. 2012 will be the year of the OverTheTop revolution. So far, they've been the outliers and early adopters. It's seemed so painfully close--and so many devices had pieces of a solution. Boxee was the leader in the open world of web content. Roku had apps and file playback. Apple TV had a well-scrubbed ecosystem. Tivo had DVR functionality and off-air recording. And Google TV had a broad consumer electronics offering with Logitech. But none of them had the 'killer app' quotient that made them runaway winners. That's all about to change. Boxee is adding a tuner, Roku is connecting with more services. And offerings like Netflix, Hulu, and Amazon Prime Video are making the leap to multiple devices and screens. Services and boxes will merge. Flatscreens will get smarter and more easily connected. The distribution bottleneck will dissolve. Prediction #3. YouTube and Google TV will merge (really this time). It's been five years since Google bought YouTube. Both companies have grown and prospered, but they've remained separate companies. There have been attempts by Google to monetize YouTube with various ad formats, but it hasn't been terribly successful. Why? Because the buyers of text ads don't want to pay a premium for video, and video is notoriously harder to target. Meanwhile, Google video closed its doors, and Google went down the road of content aggregation trying to find value in the search space around video. That too wasn't a huge win. But now, with Google TV 1.0 a distant memory, there's a clear path to profitability for the search giant. Prediction #4. Yahoo will emerge as a big creator and distributor of video. While it's easy to let Yahoo's corporate drama draw your eye, the company continues to make a conserted effort to build a solid video business. While AOL has dipped its toe in the content waters, Yahoo has jumped in feet first. In particular, Ross Levinsohn's well-executed partnership with ABC News is a clue about just how seriously they take video. "In this time of enormous economic and global challenge, the Yahoo! audience will determine the next president of the United States. We're building Yahoo! News to be the source for political coverage, harnessing the voices, opinions and proposed solutions of Americans from across the country to deliver content and reporting focused on the issues and decisions that voters and their families must deal with daily," Levinsohn said. Bravo. Prediction #5. Business video will arrive as a real targetable business opportunity.