The future is aggregation

A new study by market research group In-Stat and reported in MediaDailyNews finds that the market for online video will increase by tenfold in the next four years. The big winners? Content aggregator companies:

As one of its foundational premises, the In-Stat report notes that “within the very near future,” individuals will control what, when, and how they see all the programming of interest to them. Furthermore, In-Stat asserts that this consumer-controlled delivery will be dominated by major content aggregators like AOL, Google, Yahoo, MSN, and Apple–which are increasingly able to “blend professional video with their high-touch services that follow consumers from screen to screen,” Kaufhold (Gerry Kaufhold, a principal analyst for Converging Markets and Technologies) says.

According to In-Stat, 12.8 percent of broadband-equipped households around the world are already viewing content via an online aggregator. And the raw numbers can only grow as broadband penetration jumps from about 194 million households in 2005 to 413 million worldwide by 2010.

Once again, local broadcasters have to adopt two strategies in order to be competitive. One, we must unbundle our content to play in this space and, two, we must get into the aggregator business themselves, and I think this has to happen at the local level.

Funny the report doesn’t mention youTube, the 800-pound gorilla of online video aggregators.

Comments

  1. great site with very good look and perfect information…i like it

  2. Here’s an instructive story.

    Last night, I and my community news blog were on the local TV news. I ran a story today on the site for my readers, so they could check it out. All I needed to do was to link to the story on the station’s website.

    Because the individual news segments on the station’s site are launched by Javascript, there was no way for me to link to them directly. I wasted about 20 minutes trying to figure out how to do it before I gave up.

    I solved this problem by calling the reporter, who gave me the webmaster’s name (he had no contact info the website), and calling the (hard to find) main switchboard at the station and asking for the webmaster. He told me how to structure the link.

    If I weren’t an analyst covering online news, I wouldn’t have spent as much time as I did trying to figure it out.

    Now that’s a news organization that is not ready to be aggregated.

  3. I found the article a little lacking in particulars. While I understand that the future is fluid and none of us are entirely aware of the finer points of what’s likely to happen, I found the final paragraph to be a little vague and overly faux-threatening. It’s interesting that according to that paragraph the Pay-TV operators are “well aware of the threats coming their way from the Internet.” Of course, it seems that their answer is to… create video for online distribution.

    I also noticed the ommission of YouTube. Interesting Freudian slip.

  4. Barry, that’s an interesting point — a lot of content providers are going to have to want to be aggregated, and the evidence is that most would rather drive traffic to their own properties than give it to someone else.

    YouTube has only really existed for seven months or so. But the fact that it came from nowhere really tells something else — with bandwidth and storage so cheap, the barriers to entry for aggregation are practically nil. It’s possible that network effects might make YouTube dominant in its space, à la EBay, but the evidence is that aggregation will become more like cable TV, with sites proliferating and serving particular interests and demographics. In 10 years, but probably more like 5 years, YouTube may be like A&E or Bravo or Nashville/National/TNN/Spike, an early pioneer with a niche audience and a mission that’s changed three or four times.

    Anyway, I enjoy your site a lot.

  5. A great contribution with useful and interesting informations! Thanks and greetings from Thuringia in Germany!

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