As the digital video ecosystem gets more crowded, players that plan for cross-device content delivery and who can partner with multiple platforms will win.
Both Amazon and Yahoo have been working toward this by mastering their respective delivery methods, increasing audience scale and developing premium inventory.
Consider Amazon’s Wednesday launch of its Fire TV set-top box, designed to enable HDTV streaming from content providers like Netflix, Amazon Prime Instant Video and Hulu Plus. The release comes following last week’s rumors that Amazon would roll out a free, ad-supported streaming TV service, a potential competitor to Google and Comcast.
The release of Fire TV indicates Amazon wants more control over digital content.
“[Amazon isn’t] trying to sell the devices for profit itself, but to promote media consumption on their hardware and devices as incentive to buy more content through their platform,” said Aravindh Vanchesan, director of the digital media practice at research firm Frost and Sullivan. “They don’t necessarily have to work with Roku or Apple to stream their own content and keep it in their own ecosystem.”
Similarly, Yahoo is looking to bolster its video content delivery and production initiatives. The Wall Street Journal reported Monday rumors Yahoo is in talks to acquire News Distribution Network (NDN), an online video service that connects 4,500 publishers to premium inventory and access to 146 million viewers monthly through a Digital Media Exchange.
“YouTube gets billions of views every month and Yahoo does not have that same inventory available, so acquisition is the way to go,” Vanchesan said. “I think in terms of monthly views and unique visitors, NDN is fourth or fifth behind YouTube so it’s not that far behind.” (For January 2014, comScore ranked NDN fourth in total unique viewers, behind Google, Facebook and AOL but ahead of its potential acquirer Yahoo.)
Buying NDN would not be uncharacteristic of Yahoo, especially as it tries to strengthen its position in video, particularly mobile video. Yahoo tried last year to acquire a majority stake in French user-generated video company Dailymotion, until its efforts were trounced by French officials.
This represented no huge loss to Yahoo. Vanchesan said Yahoo might find greater benefits from the premium or professionally generated programming that NDN provides versus the user-generated content from Dailymotion. User-generated content scales, but still commands lower CPMs from advertisers.
“There are rumors Yahoo has been talking to a lot of video content generators who are currently exclusive to YouTube to convince them to publish to Yahoo sites as well,” Vanchesan said. “Although this [NDN] deal is not confirmed, it makes total sense in terms of business and strategy for Yahoo.”
But what is YouTube’s position in light of Yahoo’s rumored video acquisition, Amazon’s device launch and AOL’s push into original, long-form content?
Merging as one of its channel creators' most prolific partners, the recently developed trade association Global Online Video Association (GOVA), comprises a number of multichannel networks (MCNs) like Maker Studios and Collective Digital Studio. The organization seeks to help its YouTube channel partners manage content and drive more ad dollars.
During a content and video summit hosted by Mindshare and Taboola Tuesday in New York, Jordan Bitterman, chief strategy officer for Mindshare North America asked Paul Kontonis, GOVA’s executive director, how Google’s video platform is planning for a new crop of competitors.
“GOVA looks at the ecosystem as a whole and realizes YouTube plays a huge role, as does Amazon, Yahoo, AOL and iTunes,” Kontonis said. He added the trade group represents billions of views every month and hundreds of millions of audience members. “We need a dialogue with advertisers, talent organizations, as well as the unions… each of these affect our ecosystem and if we want to raise revenue and awareness of the content we create, we need to optimize around each of those.”
But, according to Adam Singolda, founder and CEO of Taboola, optimization means more than creating the best content.
Stakeholders need to be savvy around syndication and distribution methods. “If you’re able to find a business model that facilitates discussion or views outside of your own site or properties, I think you win,” he said.