The financial markets are on the verge of implosion and the economy looks like it's going to hell, but online video is still growing at a ridiculous rate.
Obscene growth doesn't translate to rich profits, though. Just look at YouTube, which is still struggling to make a buck off the millions of videos that are uploaded to the site every minute.
At Streaming Media West, an online video conference that officially kicks off in San Jose, Calif. tomorrow, old-media execs, tech geeks, video gurus and advertising honchos from a range of companies -- including Disney, Amazon and Roku -- will meet up, talk through and work out some of the issues in the space. Among the topics on the agenda: "Can P2P deliver on its Promise for Video Distribution?" and "Maximizing the Monetization of Online Video Content."
It's a particularly desperate time for any business with a financial in video content, and particularly for the broadcast networks. The so-called experts who study the market suspect big advertisers will trim their budgets in 2009, and online video, already a risky investment for advertisers -- is a likely cut. But just because the dollars aren't flowing to online video, doesn't necessarily mean that broadcasters and content providers can afford to cut off their digital media initiatives.
Given that traditional television audiences are dwindling and piracy is rampant, television networks are going where the viewers are -- the internet, which has become their great white hope.
"The cat is out of the bag," says Mark Trefgarne, CEO of LiveRail, an online video advertising company. "The networks have accepted that the internet is the future. If ad revenue slows down, I don't think it's going to necessarily hinder their long-term view of the medium. No executive of a major media company who takes their job seriously would say, 'Ad revenue won't keep up with costs, therefore we won't expand online.' This is the time that they need to build a position online."
And although the ad environment in 2009 could be ugly, Trefgarne thinks there may be a silver lining for the online video market.
"Hopefully, if we see slight pressure on ad budgets, we hope it forces the industry as a whole to respond to the needs of advertisers and to make advertising more reportable," says Trefgarne.
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