Youtube turns 8 in a few days. Just a kid, but mature enough to tell us what the future of TV will look like.
According to eMarketer, in 2012 advertising spending on online video in the US was $2.9bn. A sizable market, but less than 5% of the $65bn spent on TV ads.
Not too impressive if it were not because online video grew by 47% year on year. At that rate of growth, it would just take 8 years for online video to surpass TV ads spending. Just by the time Youtube would turn 16.
And there are reasons to believe that the 47% growth we saw this year is just accelerating, led by YouTube. Here are 3 reasons why Youtube will drive an even bigger growth:
1. Better ads.
- Advertisers are increasing their spending. ”YouTube is [...] home for major brand advertisers. On YouTube, our top 100 global advertisers spent over 50% more in 2012 than they did in 2011,” they said in their last earnings call.
- Ads are getting better both for user experience, and for brands. Advertisers like the new TrueView skippable ad format, through which they only pay if viewers watch the ad.
- The potential of Google to better targeting ads to user profiles and context is unmatched.
2. Better Content.
- Growing number of Professional content available: VEVO and Liga BBVA are just two fine examples I love.
- Perfect platform for amateurs to turn pros with an ad-based business model
- Youtube could soon enter the paid-for-content subscription model. This hints they could start making deals for live sport events, one of the strongholds of Pay-TV operators.
3. Better Features.
- HD at 1080p is a reality.
- Multiscreen is a reality. Same content on mobile, tablets, PC and TV
- Social is embedded and there are huge potential for “second screen” options that could potentially integrate better with online TV than with traditional TV
Online TV and traditional TV borders will blur. And when they do, Online has all the advantages to win.
Milestones in Youtube early life:
- First video uploaded (“Me at the zoo”) in April 2005
- Google buys Youtube in October 2006
- 720p launched in December 2008
- One billion daily views in October 2009
- 1080p Full HD launched in November 2009
- 2 billion daily views in May 2010
- Trueview ads launched in December 2010
- 3 billion daily views in May 2011
- 4 billion daily views in January 2012
- First video to reach 1 billion views: Gangam Style – PSY, December 2012
- #2 search engine (bigger than Bing, Yahoo, ASK and AOL combined)
- 800 Million+ monthly unique visitors in January 2013