The Video Universe Is Expanding, And Video Market Players Must Adapt
In season four of Netflix’s BoJack Horseman, an animated series about the struggles of a former 90s-era sitcom star of the same name, BoJack’s agent Princess Carolyn is pitching a new series starring BoJack. The pitch is to executives at the fictitious WhatTimeIsItRightNow.com, an online source for local times around the world.[i] The website has decided to diversify into original video content and is excited about the prospect of a star like BoJack anchoring its foray into this new line of business. “There are little-hand ideas and big-hand ideas. And that’s a big-hand idea!” says the executive.
While the plot line mirrors a certain DVD rental company’s own unlikely journey from scrappy Blockbuster challenger to global media behemoth, it is also a subtle dig at the latest crop of internet and technology firms with their own “big-hand” ideas of expanding into original video development despite having relatively little prior experience with such endeavors. Amazon, Google, Apple, Facebook, Snap, AT&T, and Verizon are all betting on a future where video is increasingly consumed online rather than via traditional channels like linear TV. And each company believes it has a shot at pulling users’ attention away from these traditional channels as viewing behaviors change. The result — at least in the medium-term — will be an ever more fragmented video market.
With this backdrop, we are debuting the “Forrester Analytics: Video Advertising Forecast, 2018 To 2023 (US)” to help marketers, media companies, cable/satellite providers, and, yes, internet and technology firms make sense of the shifting video landscape. The forecast contains data on the number of video users across 14 format types, online versus offline video time spent, and the segmentation of video ad spending across TV, online video, and social video. In the report, we discuss the user attitudes driving these changes, how they will influence advertising spending, and how marketers and media companies should respond.
Over the next five years, we expect TV and online video ad spending in the US to grow from $91 to $103 billion. While TV ad spending will hold roughly steady and continue to receive the majority of video ad dollars, online video will drive the growth. As a result, advertisers must continue to diversify their video ad budgets to ensure effective delivery of their message in what will be an ever more fragmented environment. And TV networks and distributors must continue to enhance their offerings to remain competitive in an increasingly online-centric video world by offering users greater accessibility, better pricing options, and an improved ad experience.
[i] In connection with its appearance on the show, Netflix purchased the domain name and brought the website into the real world.