Future Appears Bright for Online Content Despite Economic Worries

A few people have emailed me to ask what I thought about the effect the economy would have on the online video industry. I’m not really sure, but I feel optimistic for several reasons: 

The bigger industry that is spilling into the web is already in flux. Their main concerns are the spending budgets of big advertisers – the mainstay bread and butter like Coke and Ford – and reducing their own production costs which they have already been doing. So in some ways, this is probably going to hurt the overall bottom line of the big media companies to some degree because many (but not all!) of the major ad companies will inevitably cut back on ad spending budgets first. Advertising spending tends to fluctuate with the economy pretty closely. And this of course means the larger media companies will need to cut their corners quicker and start to think outside of the box more quickly on alternative ways to get out their content and the advertisers messages for cheaper.

According to a recent report (Reuters), adverting spending fell 2% over the last six months and recently dropped 3.7% which is considered massive for the industry, something which hasn’t hasn’t happened since fears following the attacks of September 11th, 2001.

Nevertheless, according to the same report, “internet advertising was the biggest gainer over the first six months, rising 8 percent.” And even as growth is expected to slow in a downturn, experts in the UK are expecting at least 20% growth during a recession in the year ahead (Guardian), while the US can expect 14% growth through what appears to be hard times. (ecommercetimes)

And this is where the opportunity for startups and independents online becomes greater, I think, as the creation, distribution and promotion of content can be so much more effective and economical. Good, inexpensive content that creates a spark will be attractive and more viable to an advertiser looking for a targeted, valuable audience. The better the content, the easier it will be.

Meanwhile, naturally, there is a trend of more and more people coming online to consume media. This is one very nice strongpoint that we all enjoy for living during a period in history where the online population is rapidly growing. Perhaps your desirable audience demographic will grow over the next several months and even years, regardless of the economy. According to another US study released last week (Market Watch) “the number of consumers watching video streamed through a browser has doubled over the past year, going from 32% a year ago to 63% today.” FTW!

While we are often preconditioned in many ways by the society, culture and brick and mortar market right outside of our doors, I like to think of online content creation as having as it’s first principle of distribution, the entire world at it’s door.

WIth regards to the next three months, for the last three years in a row, from this month of September through the end of December, we have always seen a major increase in traffic. Whereas many online websites see the biggest slowdowns of the year around the Thanksgiving and Christmas holidays, we see the biggest increase of traffic for the entire year. 

Having lived a life closely intertwined with a perspective on arts & entertainment, it’s typically the fine arts like the city ballet and orchestra that are the first to lose their budgets because they are often dependent on government funding, however, I have a pretty good sense from everything I have studied, and what intuitively seems to make sense, that quality entertainment will always be in high demand during a state of depression. 

So what does all this mean for the small companies distributing content online? Keep course and take the opportunity to pull ahead by making that content as good as it can be.

The infamous “Phantom of the Opera” Stage 28 which opened in 1925.

Currently in related discussion on startups in general: Loic Le Meur Blog, The Constant Observer, Regular Geek and Startup Chatter