The online video content industry has experienced exponential growth over the past few years and the result is a highly competitive industry in a constant state of flux says Oded Napchi, HIRO’s VP of Product & Marketing.
Napchi points to AOL, the multifaceted organization with its varied business interests, as a great case in point. Once renowned for its free internet trial discs, AOL is now making an amazing comeback by means of acquisitions with the singular aim of escalating its online video content market share. AOL’s goal is to “provide various digital brands, products, and services to consumers, advertisers, publishers, and subscribers worldwide,” says Napchi.
AOL wanted to create a “powerful cross-screen solution for brands, agencies and publishers.” To achieve this it begin a series of acquisitions starting in 2010 with the purchase of leading video syndication platform 5 Min Media for $65 million, followed by the September 2013 acquisition of video advertising platform Adap.TV for $405 million. In December 2014, AOL acquired Vidible — a video syndication startup that helps websites expand their video mix by offering alternative content — for an estimated $50 million dollars. This was AOL’s cheapest deal to-date, but make no mistake, it quickly helped the company begin its hike to the top of the online video content market. In fact, all the purchases paid off with AOL surpassing Google as the leading server of online video advertisements.
Currently, AOL continues to grow its collection of video ad and marketing services in its mission to rule the digital and online video advertising domain. It is also resolute that it will “transform the digital media environment by creating an open marketplace for video.”
Besides AOL there are other companies driving cash into video services and startups. In November, Yahoo bought Brightroll for $640 million and Facebook recently bought LiveRail for $400-$500 million. This illustrates that both companies recognize the importance of the online video advertisement arena, which until now has been led by Google’s YouTube.
According to Hiro Media the market is now being driven by massive mergers, which are in turn creating enormous ad networks. He predicts this outcome will be higher-quality product and service offerings and the rise of network, resource, and distribution platforms.
Growth and expansion are also being propelled by an upswing in casual viewership, not just acquisitions. Napchi believes that this is an emerging segment of online videos that parodies the model of daytime TV where viewers unintentionally discover content whilst browsing the net — basically, content is being pushed to viewers rather than being pulled.
In brief, AOL and other mass media companies are fueling the drive for change in online video content and advertisement through acquisitions and invention.