This week sees the publication of my new report looking at online video strategies in an economic downturn. The question is – with advertisers and consumers looking to tighten their belts – should companies continue to build and develop their online video offerings? Yes they should.

  • Demand for online video continues to rise among Europeans, especially
    given a challenging economic climate in which free content will become
    even more popular.
  • Content owners and media companies must seize the
    opportunity to engage with this audience by making their offerings more
    compelling in terms of both content and user experience.
  • Direct
    monetization is still nascent and will remain so in the midterm due to
    the economic downturn. However, rapid advances in the technology for
    filtering, serving, and syndicating content will accelerate this
    market, while helping drive users to existing revenue streams such as
    DVD sales.
  • Companies must innovate to gain market share now and to
    build foundations for future revenue growth once the economy recovers.
    Those that retrench now risk losing their audience to pirate sites.

I spoke to one company who admitted that their online media offering had been described internally as a "strategic initiative" – a euphemism for a project that tests the water but loses money, and precisely the kind of thing companies are looking to cut back on. Yet 12 months on from launch, it is now a leading revenue centre. Elsewhere a content brand (I discuss this in the report) saw sales of their DVDs via Amazon rise by 23,000% after engaging with their audience on YouTube. The audience is already there and now successful ways of monetizing the content are emerging.

Now is not the time to retrench to business models that worked before. The ground is shifting and the winners will be companies who innovate now. As one of the performers quoted in my report puts it, talking about online video, "Stick with it, there may be money to be made."

If you are press and would like to discuss this with me, please contact PRESS at FORRESTER dot com.