In parallel, on demand video streaming services are becoming more affordable at USD 10/month or less. Although Facebook has been focusing on growing its presence in the video market, YouTube continues to win in online viewership with 7+ billion daily viewers, 1.3 billion subscribers, 500+ million hours of daily video views, growing at 60% YoY and 300 hours of video uploaded every hour.
As a consequence, advertisers continue shifting spend from TV to chase online video viewers across multiple platforms, in the US ad spend is the digital space is now larger than in traditional platforms; YouTube is one of the biggest beneficiaries, capturing more than 20% of the total video spend in the US.
The online video ecosystem is evolving to keep pace with changing consumption patterns, to grab eyeballs and to capture a share of the rapidly growing digital ad spend. Brand owners and agencies are moving from passive spend to get in front of audiences to actively engaging with them through branded content and sponsorship. Online video players have transitioned from traditional aggregation, curation and distribution to setting up global, multi-platform, multi-device, multi-revenue content creation factories. Furthermore, they are now taking a leadership position in managing online influencers to build viewer communities and connecting them with advertisers and brands.
Monetisation for such players is also evolving��”�in order to drive revenue growth and build sustainable margins, successful companies are increasingly opening up multiple revenue sources.
Key Success Factors (KSFs) in winning business models
Although online video players have adopted varying business models to meet audience needs; in our view, all successful players show 7 common KSFs irrespective of their business approach
Content: aggregation and creation of original IP
Talent ecosystem: acquisition, development and retention of online talent
Distribution: diversification of network through multiples platforms��”�gaming consoles, digital platforms, iOS, Google, others
Brand relationships: development of strong in-house brand sales teams to drive relationships with agencies and brands
Audience acquisition and retention: decrease of Customer Acquisition Costs, improvement of retention rates by exploiting brand awareness and by leveraging talent ecosystem and influencers network
Analytics: decision making based on analytics of consumer behaviour
Revenue streams: diversification of revenue streams: advertising, branded content, licensing, subscription, micro-transactions, amongst others
Videos play a very important role in the travel industry. Travellers are increasingly experiencing destinations before visiting them through travel videos. According to Google, 2 out of 3 U.S. consumers watch travel videos when they are thinking about a trip and almost 70% of travel related views on YouTube are for brand or professionally released content. Travellers are not only watching these videos. They are looking to establish a connect with creators and brands. As a result Travel blogs and personal stories generate the most interest with blogs generating 4x social engagement vs. other kinds of travel content.It’s time travel startups embrace online video as a way to engage with travellers as this trend is only expected to accelerate.