A lot of people have recently been discussing the video
advertising outlook for
2008.
Most sites which provide some kind of streaming television, or
video on demand, are rapidly changing their business model to an
in-video advertising funded one.
Research by Yankee Group suggests that revenue attributed to
downloads and in-streaming advertising is forecasted to grow
significantly over next five years.
By 2011, in-stream advertising
revenue is expected to reach $3.89 billion dollars and revenue for
downloads will contribute $850 million.
Important Metrics
Two important metrics driving the growth of these revenue
streams
are the number of users who watch online video and the amount of time
spent watching online video – both of which are on the
rise.
As the
number of users and time spent viewing video increases, advertisers
will bid up the CPMs thus driving higher the top line revenue
attributed to in-stream advertising.
IDC research also suggests that
approximately 1,200 terabytes of data are consumed each day in the U.S.
alone by users watching online video. This number is expected
to grow
to an astonishing 7,800 terabytes/day by 2011.
Pre-Roll Vs In-Stream
Pre-roll and in-stream video ads, whether online or mobile,
represent a
huge opportunity to monetize content.
The opportunity also creates
additional stress on existing transcoding resources, requiring
operators to increase their transcoding capacity to keep up with the
push to monetize more content in more formats.
We agree with Jay Braage, that online video
is the key
to the media castle
– but new approaches to video transcoding is what will help
deliver
video to wider audiences and thus giving operators new opportunities to
cross-market content and open new advertising and revenue streams.
Originally written by Brendon Mills of the RipCode Blog. RipCode offers on-demand video transcoding solutions to ease the process of re-purposing video into multiple viewing formats.
