Pinpointing the official moment the digital video industry “arrived” at last week’s NewFront may be difficult; was it when “Hangover” and American “The Office” star Ed Helms announced his new web show, or was it Sarah Jessica Parker of “Sex and the City” fame? Did indie band The Lumineers’ or Carly Rae Jepsen’s musical set seal the deal? Or was it the 1200+ attendees waiting in line at AOL’s presentation?
Whatever the exact moment was doesn’t really matter; the entire week was the watershed moment the online industry has been waiting for. The Digital NewFronts used to be the kiddie version of the Television UpFronts — the UpFronts being where television companies preview upcoming content for ad and media buyers who then buy or bid on commercial slots. This year marked the end of the Digital NewFronts as child’s play.
“This is the first year they are real,” said Steve Rosenbaum, CEO of video curation and monetization platform Magnify.net, in a brief interview before we took our seats at AOL’s Tuesday presentation. They were “pretending the year before,” he added, right before AOL unveiled 15 new high-quality shows starring or produced by well-known Hollywood celebrities like Gwyneth Paltrow as well as internet personalities like the fashion photo-blogger The Sartorialist and YouTube royalty iJustine. We shared notes on how good Yahoo’s presentation and content looked too; “Erin McPherson loves talent and you can tell,” Rosenbaum and I gushed. “Marissa [Mayer] was smart; she just did the intro and then left the stage to Erin.”
Rosenbaum and I weren’t the only one awed by how serious everyone — from marketers to media buyers to CEOs of tech companies like Yahoo to sites like the Weather Company – is now taking online video programming.
“We are here at the birth of a new popular medium,” Randall Rothenberg, the president and CEO of IAB said in a five-minute video interview with Beet.TV. “We are seeing some of the biggest television and movie stars in the world coming to digital,” he added. Web video provides creative types with a platform for the “kind of creative expression and programming they can’t do on cable or broadcast.”
Musicians are also seriously considering digital video for creative or monetary reasons. The Lumineers performed at Yahoo’s Monday presentation as part of Yahoo’s musical documentary series “On the Road,” and rapper Snoop Lion (formerly known as Snoop Dogg) performed on stage Wednesday for YouTube after recently signing on with Maker Studios, the multi-channel YouTube network.
Rothenberg expressed astonishment at the high level of attendance and the “high caliber” of talent the industry is attracting in his video interview, before mentioning the “enormous enthusiasm” coming from advertisers and marketers for “the burgeoning medium of digital video.” Advertisers are thirsty for high-quality, longer form content on the web they can buy ads on, as they’ve finally realized that is where the 18 – 34 year olds have gone. And teens and children too, actually.
“Those brands that target the 18-to-34 demo should no way hold 80 percent of their dollars for TV,” said James O’Neill, VP at RJP Interactive Media, to Ad Age.
“We have conclusively demonstrated that there’s a robust audience demand for the kind of high quality video content that we’re producing,” Mark Walker, senior vice president of Disney Interactive Entertainment, said to the Associated Press.
According to Jordan Bitterman, Senior VP at integrated advertising agency Digitas, online video is now worth $4.1 billion — double what it was worth 18 months ago. Bitterman is cautious when he mentions the industry’s worth being $9 billion three years from now; if current growth rates sustain, the industry would be worth over $12 billion by 2016.
Profits, famous celebrities, and critical acceptance (Netflix’s “House of Cards” has set the industry standard for digital video excellence) aside, there’s another tell-tale sign that announces the legitimacy of this “new popular medium”: the presses.
Last year both Deadline Hollywood and Ad Age announced tracking tools for YouTube’s premium content channels (recipients of Google’s 200 million initiative into high quality programming), and established magazines and newspapers like Fast Company, Variety and the New York Times seem receptive to online video coverage. In addition to mainstream acceptance, there are now three digital publications dedicated just to covering the business of online video: NewMediaRockstars, Tubefilter and the newly launched trade publication Video Ink. (Full disclosure: I work, or was propositioned to work, at all three of these.) And then there is Beet.TV, which is the video-only publication covering online video.
In the wake of digital video’s sudden legitimacy, however, lies a fear of the bubble.
While cabbing through mid-morning NYC traffic to Blip’s phenomenal rebranding presentation as an original series creator from user generated content, digital video PR pro and veteran Jocelyn Johnson and I couldn’t help but discuss the news of the day: DreamWorks’ $33 million investment into the YouTube network AwesomenessTV. We agreed it was an over-investment — an assessment shared by everyone we spoke to throughout the day — and Johnson compared this over-investment to the dotcom boom and bust of the ‘90s. Her words reminded me of Revision3 CEO and Founder Jim Louderback’s words at the unofficial YouTuber conference VidCon in 2012 during “Industry Day.” Louderback was concerned advertisers are already paying too much for products they don’t understand, and it would eventually lead to a “crash” as far as how much advertisers are willing to invest.
That clearly hasn’t happened yet, and it may be too soon to be all doom and gloom about the finally legitimate online video industry, but it could explain Bitterman’s caution in estimating profits three years from now. Either way, online video is here, and it’s loud and proud.