Following are 3 video predictions for 2012 from Doug Knopper co-CEO and co-founder of FreeWheel, which provides enterprise-level media companies with the infrastructure needed to create profitable content businesses in the new media landscape.
1. In 2012, tablets and game consoles (Xbox 360, PS3, etc) will together drive more video revenue than connected televisions and mobile phones combined. Programmers and operators view devices like the iPad and Xbox 360 as complementary rather than cannibalistic of the existing TV environment, which is why high-end content (i.e. HBOGo, ESPN3) is getting there sooner. Video on Demand has certainly found its home there and live broadcast is increasingly being allowed off the "managed network" out of the home. Also, it's only a matter of time before a peripheral player throws their hat into the ring to create a virtual MSO, and you can bet the install bases of gaming consoles will be highly attractive for their offering. They would be able to offer digital simulcasting with TV ad loads, which means many more ads per user than what one can find on a connected TV or smartphone. 2. A major online streaming company will add a subscription tier that includes advertising to attract more current television-oriented content. Customers are not only wanting, but are also expecting the content they want to be available on the streaming services they use. Which is why we have seen some of the recent one-off and large content acquisition announcements from companies like Netflix and Amazon. But, hey, that stuff is expensive and it's hard to see how the math adds up for them with just low-cost subscriptions or rentals. With the pressure rising from new entrants like Red Box and possible "virtual MVPD's", and since half of Netflix's streams are for TV shows, look for a major player in the space to offer up a different subscription tier that is also ad-supported (possibly by programmer-sold ads). This added revenue will go a long way to making up the difference with "traditional" distribution and help to bring in more content that is closer to its original airing, which in turn will attract (and keep) subscribers. 3. Santa will report that he found video-playing devices (i.e. connected TVs, tablets, PCs, smartphones, gaming consoles, etc.) on 80 percent of wish lists this holidays season. This isn't necessarily a prediction for next year, rather how the tone will be set going into 2012 and how that will affect the strategy of content providers and distributors. Consumers are watching videos from the nearest available screen, whether it's in their living rooms or in their pockets, and we will see tremendous adoption rates of newer devices to satiate their demand for professional video content. Happy holidays, indeed.
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