Technology has had a dramatic effect on the video production industry over the last 5 years. A few years ago video production was a highly specialized service that required very expensive equipment. Today anyone can pick up some cheap equipment and start making videos. At the same time many businesses are starting to embrace video, primarily on the web, as a means of reaching their audiences with engaging and persuasive new content. It’s both the perfect storm and the perfect opportunity for providers and purchasers of corporate video production services.

I am often asked about the state industry – how it’s changing, where it’s going, so I created this brief summary of how I see the industry evolving.  The numbers are my own – based on observation, research and discussions with other video productions companies.

Level 1. Equipment Owners
(Trend – Growing number of providers, resulting in both new opportunities and risks for businesses).

For under $5,000 you can pick up an HD camera, a cheap three point lighting system, audio equipment, computer and software to edit the video and just like that, you are now a video production services supplier.  It may take you a few weeks or months to get the hang of it but eventually you’ll be able to produce some decent video: Simple point and shoot projects, talking heads and perhaps even a corporate overview. Most new entrants will start by providing free or virtually free services and most will exit the industry in under a year realizing that, in spite of hype, it’s difficult to make a full time living in video production. We’re bound to see a lot of churn over the next few years.  This trend is not new to the creative services industry. We’ve seen the same thing with photography and graphic design. When anyone and everyone can provide services the market has difficulty in discerning value and as a result, there is bound to be a fair degree of uncertainty and disappointment in the marketplace. Who benefits? – the businesses who find capable low cost video production suppliers and the video equipment manufactures. Those suppliers with both perseverance and talent will evolve to the next level:

Level 2. Experienced Videographers.
(Trend – numbers are growing but the capabilities of this group are also changing quickly)

The two principle distinctions with this group are 1. Experience and  2. They are usually one person businesses. Whatever their legal business structure (i.e. sole proprietor or incorporated business) this group have been shooting for a while – both for their own clients and also doing freelance work for larger video production companies. Some of these guys (over 90% are male for some reason….) specialize in weddings or events and some do mostly corporate work. The big change for this group is that they are doing more now than ever. They are having to sell and promote themselves in different ways. They are being squeezed by the equipment owners on price but they are also competing for the first time with the larger video production companies. It’s okay today if you are a one man band. It didn’t use to be -  primarily because it was very difficult (and expensive) to do it all. Today you can. Many videographers used to be just shooters, either because they didn’t want to do editing or they didn’t want to appear to be competing with their principle source of income -  the next group in the food chain – the video production companies. {Interestingly, you are also seeing video production companies downsizing to three, two or one man operations working from home – again, because the market and technology allow this to happen and also because the ongoing cost pressures demand it.}

Level 3. (Pure) Video Production Companies.
(Trend – this group is experiencing the most pain, the numbers of these providers are shrinking)

The traditional video production companies (two or more staff and lots of experience) are getting squeezed from both ends. They are seeing tremendous price pressure and are not able to sustain the same high rates that used to comfortably pay their overhead. Big studios, lot’s of expensive equipment, layers of management and admin are all luxuries that few production companies can afford today. Most people in this group started in video – doing sound, doing lighting, etc. The entrepreneurs eventually started their own production houses. Having experience isn’t enough, however. Sure, the market will still pay for experience – but what it will pay is a moving (lower) target. The other challenge this group is facing is that they are seeing people with other talents and backgrounds (i.e ad agencies, marketing consultancies, online media companies, etc) jump into the fray. The traditional video production companies will argue that these new entrants don’t have the required video production skills but the reality is that the market places more value on ideas and application than on technical competency. Shaky camera, focus hunting, imperfect lighting and a litany of other video transgressions are not only acceptable today, they are sometimes preferred. New entrants often shape a market in strange and wonderful ways…

Having great video production skills today are becoming table stakes for higher end productions. The next level is application – what do you do with the video.

Level 4. Value-added Corporate Video Production.
(Trend – this group will grow quickly over the next few years)

The ‘value’ in the video production industry used to be in the expensive equipment and the experience in using it. A few years ago ‘corporate video’ meant either a TV commercial or a ten minute video containing a whack of superfluous motion graphics. The number and uses of video are growing faster than anyone can keep track of (here are 51 different types of video being used by businesses today).

The value today is in how you apply video to your market, not in how you make the video. As such, there are a number of new market entrants to video production who are not only creating video but coming up with new ways to apply that video to specific business objectives. Social media, interactive video and mobile video are all examples of purpose-built content to solve a specific business problem. One size doesn’t fit all. You will start to see video production companies specialize in the creation and delivery (creating the video is only the first step) of video. You will also start to see video production companies specialize in certain types of video (like HR or PR) as vertical knowledge will become more important than general video production knowledge. As such, you are seeing either new hybrid companies with marketing or social media capabilities enter the video production industry of you are seeing very tight collaborations (sometimes evolving into new business entities) between creative or marketing agencies with video production companies. Ultimately all of these companies are trying to get to the top of the food chain:

Level 5. Regional Market Leader
(Trend – No change here, every region has a couple of leaders)

By ‘Market Leader’ I don’t mean “Our firm is a Market Leader that provides leading edge expertise in…”  Anyone can lay claim to leadership but there are only a couple of true leaders in every market. The leaders command the big budgets. They are the regional go-to companies for the biggest brands or government agencies. Every services company looks to become the leader for one reason (O.K…. probably more than one): Market Leaders command the largest budgets on jobs – and that means not having to compromise and that also means having the greatest latitude to do the best work. Sure, everyone is being asked to do more with less – but more is better.  These guys are easy to find. Their body of work speaks for itself. The reason they got to where they are will (most likely) be the reason they will also be able to adapt to new trends and changes in the video production industry.

Technology has had a tremendous impact on the corporate video production industry. That said, you still tend to get what you pay for ( you just get more now…)

Salesforce provides cloud-based CRM tools and is a global leader in web-based services.  With over 1500 videos it’s safe to say that Salesforce is fully committed to web video as a means of reaching their customers and driving new business. If the internet is important to your business the above Saleforce video case study will show you how web-based video can support your ongoing business objectives. Saleforce presented this video at a recent Google B2B Think conference.

The video shows why Saleforce has chosen YouTube to manage their video assets,  promote awareness and drive new leads to the company. Some highlights from the video:

- YouTube is now one of Salesforce’s most important online marketing tactics.
- Saleforce equates their YouTube effort to adding 46 sales reps.
- Interestingly, one of the reasons Saleforce chose YouTube as their video delivery platform was that it was one of the most trusted by users.
- They have seen much greater success with video SEO since using YouTube to host their video.
- They have also tested YouTube Display Ads, Promoted Videos and on video Calls to action.

Many businesses today are considering what is the best option for hosting their marketing video. Obviously Salesforce isn’t concerned about issues such as YouTube being blocked by some sites or the possibility of other videos being shown around your video if you happen to click through to the YouTube site itself.  Should they be?

The internet is coming to your TV and it’s going to get ugly… for a while.

I  vividly remember the ‘experts’ confidently defining two distinct media participation modes – ‘lean forward’ (i.e. actively engage in a specific task… on a computer) and lean back’ where you consume passive entertainment (generally on your television). The experts were correct for a couple of years. Then we humans did what we often tend to do – we adapted. Check out your teenager today on a computer watching a video, texting their friends and updating their facebook status, all at the same time. Are they leaning forward or back, and does that distinction even matter? None of the experts even considered the third critical media consumption mode, ‘walk forward’ (mobile). “OK” the experts concede, the ‘lean forward/back’ paradigm really just applied to the television set. You still only lean back in your family room, right? Wrong…

Google has quietly been applying it’s considerable brain power to GoogleTV. Like Apple (and Apple TV) Google is betting that the most important and lucrative screen in the world (your TV) is going to open up into a platform for much more engaging ‘lean forward’ type of activities, and they are looking to put themselves in the middle of your family room.

Everyone is fighting for control. The networks are fighting for their lives to control when you can watch your favorite shows. Apple wants to own the big store that you get all your shows from. The cable companies want to limit what you can and can’t see. Google wants everyone to be happy, free and open as long as every commercial is served through their advertising delivery network. The TV manufacturers all want a piece of the action. The set-top box companies are all scrambling trying to figure out why nothing they have created to date has ever caught on. Microsoft is hoping they can spend their way into your hearts by making x-box the single device that solves all of your integration issues. Netflix wants to provide you access to every bit of media ever created for one low fee. Hulu isn’t really sure what they are doing but the networks that own Hulu are at least trying to stay ahead of the wave and not make the same mistake that the good folks from the music industry made. Exciting times!

What does it all mean? Very, very soon, your TV, if it is not already connected,  is going to be connected to the internet. New micro targeted channels, games, tools, applications,  the long tail of media, new services, cloud-hosted everything and a bunch of stuff we can’t even imagine are all going to be accessible on your TV. It’s the wild west for a number of years until Google or Apple (my guess) or someone else becomes the dominate interface to all content, gaming, applications, and other stuff that you will be leaning forward, backward and sideways to do on your family room ‘TV’.

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An example: Sony has partnered with Google and are introducing Google TV on some of their new displays:

…and a timely example of ugly:

“I’m convinced that the latest iteration of crowd-accelerated innovation, fueled by Web video, is about to ignite the biggest learning cycle in human history.”

Big statement… with even bigger consequences. Imagine the impact on productivity if it’s correct.  Chris Anderson, founder of Future Publishing and curator of the TED Conference  says the rise of web video is driving a worldwide phenomenon he calls Crowd Accelerated Innovation — a self-fueling cycle of learning that could be ‘as significant as the invention of print.’

True to the vision of TED (“Riveting talks by remarkable people, free to the world”) Anderson suggests that video sharing sites like YouTube are driving innovation in thousands of disciplines ranging from the ultra-niche to the sharing of truly world-changing ideas.

Today individuals are driving this radical innovation. Organizations on the other hand, still  have to contend with inertia and institutionalized bad habits. They also need to embrace radical openness in order to tap into the power of this growing phenomenon. That’s a big challenge.

The video is thought provoking and certainly worth a look:

http://www.cnn.com/2010/OPINION/09/18/anderson.youtube.innovation/

Content is king, if you can track it.

Up until… this week, a large disconnect has existed between web-based content creation and content measurement. That chasm may have narrowed significantly since Adobe announced its purchase of Omniture – the online marketing, web analytics (and data collection) company.

Adobe has taken a significant step in moving beyond it’s digital content creation roots into what may turn out to be a much, much larger business. Network and cable television are closed systems. The Internet is an open system. The first company to establish smart, economical and trusted methods of tracking and monetizing any and all types of content on the Internet could become the new platform for web content delivery - that’s a very big deal.

Flash comes as close to ubiquity as it gets on the web (however, Google and Apple continue to shut Adobe out on their own respective ’mobile web’ platforms). Imagine if every flash player also tracked and reported usage, supported trusted digital watermarking processes, facilitated micro payments and helped to connect the social media and viral distribution dots. Adobe is trusted – especially by the creative and development community so it would be comparatively easier for them to set the standards and to ultimately evolve into becoming ’the platform.’

This acquisition could also be seen as a defensive move as Adobe will be under some pressure to add more value to flash because the implementation of the new HTML5 standard (whenever that happens) will include video tags which don’t require a video player plug-in.

The holy grail of marketing has been to find a way to track the results of your marketing program. Adobe has made a very strategic move in purchasing Omniture. Content developers and their customers should look forward to implementing new ‘commerce modules’ with future Adobe product releases.

Nielsen has released a new report  that looks at online engagement by Internet users. John Burbank (above), CEO of Nielsen, provides highlights of the study. Online video and social media lead the way while the rate of growth for  ’traditional’ online activities such as e-mail and search has continued to decrease.

According to the report online video and social media have now surpassed e-mail in terms of online activity.  Why is this happening? Johan Jervoe, CMO for Marketing at Macdonald’s summarized this new behaviour well: ” It’s not about technology and wanting to be online constantly. It’s about wanting to belong and be connected constantly.”

The term ‘Online Video’ encompasses a broad range of business activities.  This has lead to confusion in the media and in the marketplace. For businesses looking to use online video as a means of communicating with their key audiences, the future of online video is indeed bright. For portals and services looking to commercialize the distribution of the millions of videos available online (entertainment, corporate, user-generated… whatever) through advertising or service fees, the future is at best, uncertain.

Déjà vu? We’ve already seen how things will shake out for online video distributors. Remember Napster, Yahoo Music or Viacom’s Urge? The music industry struggled though the same painful consolidation that the online video consolidation and distribution industry is experiencing today. (The Ad Networks are next… the Content Delivery Networks are still in their growth phase.)

The VC’s that invested millions in too many similar ventures have turned off taps. Consolidation in the industry has started and will pick up steam in 2009. That will leave a number of dominant players like iTunes and Amazon on the fee side of things, companies like Hulu and YouTube as portal players and a few other heavy weights like Microsoft and Facebook (and perhaps a couple of the major TV networks) to round out major services.

While the portals and distributors of online video sort themselves out, the use of the online video as a communications medium continues to flourish.