Monetizing Massive Growth by Tyler Willis , Wednesday, June 10, 2009
Cisco released a report on Tuesday that predicts global Internet traffic will grow four times larger between 2009 and 2013, and that a significant cause of this growth will be the rise in online video traffic (including streaming, live video, video on demand, and video conferencing), which by 2013 will be 60% of total Internet traffic.
There are many fascinating current trends in video, mobile and consumer vs. business Internet usage highlighted in this study. For example, here are some other fun facts taken from the report's executive summary:
-- The sum of all forms of video (TV, video on demand, Internet, and P2P) will account for over 91% of global consumer traffic by 2013.
·- It would take well over half a million years for one person to watch all the online video that will cross the network each month in 2013.
·- Video communications traffic (video chat and video calling) will increase tenfold from 2008 to 2013.
This massive growth raises the important issue of which business models will be poised to take advantage of this trend. While video advertising is predicted to increase steadily, especially as television dollars move online, it won't increase large enough to meet the new demand. According to eMarketer, online video advertising spending is projected to increase by less than 30% yearly into 2010.
There's an urgent need for new business models that will help the market monetize this massive increase in attention. In my last column, I discussed the subscription model, which works well with video communications and provides a potential way to monetize live video and video on demand, but may face serious pitfalls when it comes to other video products (although fellow Video Insider Steve Robinson has written an insightful article about how to change this).
There are many other monetization models out there. I'm guessing that you are likely engaged in crafting, testing, and refining the next models that will define how we pay for the consumption of video. I invite you to discuss your models in the comments. You tell us: What's our future going to look like?
Willis, 22, is director of marketing for Involver, a technology company that helps brands distribute, track and optimize video campaigns on social networks. Willis writes about virality, engagement and monetization at http://blog.involver.com and is @tylerwillis on twitter. He can be reached directly at firstname.lastname@example.org.
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