Video: Veni, vidi, vici

Mar 1, 2014
From YouTube to Netflix, the rise of a powerful advertising medium in the digital world.
Digital communication is an ephemeral medium - perhaps the most ephemeral of all. Every day, a "new Facebook" or "new Google" appears in an expert's analysis. The fantastic speed of technology, the anxiety of analysts to point out trends, and the amount of smart alecks trying to sell cat for hare form this picture. And so, one of the many "next big thing" of the last decade is video. But unlike other bets, video has finally proven to be a format with viable potential - because video really sells. Out of so many bets, videomania is one of the few that will consolidate. And it won't be little.
The industry's bet on video was born on YouTube. Previous predictions of increased video consumption were an academic concept until Google's video property was acquired for about $1 billion. Even with concepts like Metcalfe's and Moore's Laws, no one understood how video could become the atom of the digital world. Video, as conceptualized by the media, is expensive to produce, requires a screen of a specific size, and a narrative that occupies a receiver's attention span that goes against some paradigms established in the web of text and image.
The exponential growth of video production and consumption prompted by Google's acquisition of YT made the market rethink. For the first time, the price of content production reached a value for which the advertising model generated significant money revenue. And the risk of subsequent lawsuits (which is what most analysts feared) proved harmless, as the first amendment (in the US) and the Freedom of Speech Act (Europe) ended up redesigning the concept of copyright. YouTube is the initial milestone in the production of video as a content commodity on the web.
But the exponential growth chart needed confirmation from marketers about the effectiveness of video creation. And it came slowly, but consolidated fabulously. The arrival of competitors like Vimeo and DailyMotion (which compete in slightly different niches, but still deal with the same format) only did well for YouTube in the sense that they created a well-defined market. 2013 was the year in which video production as advertising and the generation of video content as a premium product in the hunt for video dollars consolidated, and the advertising market finally lost its fear and today it is possible to point the format as the filet mignon of the advertising market. The chart on the side shows the excellent evaluation of the advertising market in relation to the most positive faculties of video as a carrier of advertising messages. The full eMarketer article is here(unfortunately, only for subscribers).
As if Google's locomotive wasn't enough, another hurricane also put concrete in the foundations of video in the digital market. Even with Yahoo doubling the value of its shares in a "skull knife" year for Marissa Mayer and Twitter doing its IPO, who won in the techwar on Nasdaq was Netflix, with a valuation of almost 250%. Reed Hastings did for premium video what YouTube did for homemade video. The company's business model supported the production of spectacular drama like the award-winning House of Cards and although it doesn't work with business models that have advertising as a revenue source, it's just a matter of time. Hastings should be able to, in the near future, offer plans that reach even larger segments of the population (at lower prices), producing top-notch content and still maintaining double-digit growth rates.
With video consolidated, the next war arena is mobile. Both YouTube and Netflix are expected to participate in the fight, but they will have several other competitors. Google has already clarified that it wants to own mobile devices (not only through Android, but also by optimizing tools for smartphones, such as YouTube itself). But Netflix already has a foothold in the niche, followed by Facebook and which other giants like Yahoo, Microsoft, and Amazon have shown appetite for. For those who work with video, the horizon is clear - at least for those who understand the platform they want to dominate and forget the TV's mannerisms. It seems easy, but it's not.

© Cassiano Gobbet 2023 - 2024