By Chris Lee

Online video is huge. The largest online video provider YouTube exceeds two billion hits on a daily basis and is one of the most visited sites on the Internet. This increasing demand for online video is altering the way advertisers target consumers and TV content providers operate.

2011 could see further shake up in the online video market so to make sense of it all NMK quizzed a number of leading lights to gain their predictions.

Internet TV comes of age

For Suranga Chandratillake, CEO and founder of video search engine Blinkx, 2010 was a year in which technology companies tried and failed to crack the Internet TV market. This was because companies like Google and Apple tried to replicate the computer experience on the television and, as a result, the experience was not intuitive for users, he told NMK.

“In 2011, we will see the TV industry drive the market. Europe is going to lead the way ahead of the United States with projects like [TV catch-up service] YouView, which comes with the backing and blessing of major broadcasters and content that will drive mass consumer uptake,” Chandratillake said. “But whilst YouView is a compelling proposition for consumers, one of its main challenges will be ensuring that the broadcasters, who naturally compete, are supportive of the project and ensuring its success going forward.”

An advertiser’s dream?

Chadratillake added that developments in the Internet TV space also open up a compelling proposition for advertisers who will benefit from an unprecedented level of targetability for TV, a viewpoint echoed by George Dann, managing director of online and video advertising service Localstars.

“The market is still nascent, but as more advertisers adopt it, they will drive demand for a more complete way of measuring effectiveness than the current standard - which is the CTR (clickthrough rate),” he told NMK. “Video advertising is also about branding, awareness, engagement and interactivity, and as we go into 2011 advertisers will want to see more data including the number of plays, replays, impressions and interactions in order to assess effectiveness.”

But what about the ads themselves? Dann expects them to get even more interactive with features such as on-screen overlays with social networking links – allowing viewers to automatically click and become Facebook fans of an advertiser whose video they’re watching, for example. 

“This kind of interactivity ‘closes the loop’ and means advertisers can start collecting data and forging relationships with their target audiences,” he said.

Evolving distribution

2011 will also be the year that Internet video will shape and reshape business, not just in broadcasting but across a number of vertical sectors. That’s the viewpoint of Barak Bar Cohen, executive vice president of global business development at video services firm KIT Digital.

“In previous years, we have seen IP (Internet protocol) video reach the masses with online video services like YouTube and Hulu. In 2011, we will see brands increasingly becoming broadcasters, niche content reaching viewers via IP broadcasting and enterprises using IP video to reach both internal and external constituents wherever, whenever and however they prefer,” Bar Cohen said. 

Bar Cohen concluded that online video would become pivotal to businesses in 2011 as it provides new revenue opportunities for broadcasters and content owners by enabling them to distribute, monetise and measure live, linear and video-on-demand channels while delivering a high-quality, branded viewing experience.