Contentinople's Top 10 Predictions for 2009

Written by Ryan Lawler

Wednesday, December 31. 2008 at 02:00 PM EST Post a comment

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The digital media industry saw a whirlwind of change in 2008, with professionally produced video rapidly drawing viewers to consume more content online, and for longer periods, than ever before.

In a very short period of time, eyeballs that once were glued to YouTube Inc. 's user-generated, short-form videos have been drawn to broadcast-quality episodic video enabled by sites like Hulu LLC . So what's next for online video, and digital media in general?

Here are Contentinople's top 10 predictions for what's to come in 2009. 

10. Internet video will be stuck on PCs -- for now
Contentinople believes that at some point in the future, consumers en masse will be well equipped to view all kinds of Internet video fed directly into their TV sets. But those who think that transition will happen in 2009 should think again.

That's because, with no standard way to watch Internet videos on the TV, the number of consumers that will rely on their new wide-screen HDTVs to access programming from Hulu and other video sites in 2009 will be limited to early adopters curious enough to buy products like Blockbuster and 2Wire Inc.'s digital media player, Sony's Bravia Internet Link, Microsoft Windows Media Center extender devices, Apple TV, or LG's Blu-ray Disc players. Sure, there are plenty of options to choose from, but who wants to choose the wrong one?

Until one Internet-connected device emerges as the clear leader, or until service providers like Comcast and Time Warner Cable decide to activate broadband services through Internet-connected set-top boxes that consumers already have in their homes, IP video on the television won't be available to the masses. That might happen in 2010, but probably not next year.

9. Royalty issues will kill streaming music sites
If you're an avid listener to streaming music, you may want to begin weaning yourself off the good stuff now before your favorite sites slowly (or perhaps not so slowly) start to disappear.

Of course, these are just predictions, but this one may not be too far off. In an interview at the Web 2.0 Summit earlier this year with Tom Conrad, CTO of Pandora Media Inc. , Conrad noted that streaming music sites that allow users to create playlists and embed those playlists into other sites are actually breaking the rules.

"Interestingly, BMI and ASCAP licenses -- the rights organizations that represent songwriters -- those licenses explicitly forbid you from doing that. Many music companies do it anyway," he said. (Not mentioning any names, Imeem.) "It'll be interesting to see what happens to some of these other services that are smaller than us but are doing these embeddable-style players when it's entirely crystal clear the license doesn't allow for it."

Following the rules doesn't necessarily mean Pandora is in the clear, however, as the site, which is licensed under terms of the Digital Millennium Copyright Act, has been embroiled in a bitter licensing debate since 2006 when copyright royalty judges set the rate of licenses at triple what they were. This issue has been widely declared as one that could kill Internet radio, and Conrad seems duly aware of that fact. "At triple the rate even in a fully-monetized form... there's just no question there's no business model that works for Internet radio."

8. Online ad spend will start catching up to eyeballs
Here's a curious statistic: The Internet accounts for 33 percent of all media consumption, but only 10 percent of all ad spend. According to Rubicon Project CEO Frank Addante, that means that 23 percent of the time, advertisers are spending money where the eyeballs aren't. [Ed. note: The math is a bit fuzzy, but we'll take his word for it.]

Well, 2009 might be the year when all that begins to change, and nowhere is that more evident than in online video. With Internet video viewing skyrocketing, we expect advertisers to shift more spending to online video ads, running both linear ads, such as pre-roll spots, and non-linear spots, such as interactive overlays.

Internet video ads represented just 2.6 percent of spending in 2008. But with advertising networks such as Tremor Media and Broadband Enterprises selling huge inventories of online ads from Web publishers in targeted advertising packages, media buyers that previously relied solely on search and display advertising will turn more to running video ads to reach viewers.

7. Twitter will pull in 'significant' revenue
Twitter CEO Evan Williams promised us this December that the social networking site would start making money in the first quarter of 2009. It's just too bad that no one can really explain how this is possible. (But can you really blame 'em? I mean, after all, they "can't predict how the businesses [they're] in will work" when they "literally have no business people in the company," according to confidence-inspiring Williams.)

Regardless, Twitter's long been seen as a hot property, with even mighty Facebook making an acquisition attempt in November and speculation mounting that giants like Google, Microsoft, Yahoo, or Verizon could also be interested. If it can map out a plausible strategy, the site's unique concept could bring in revenue that matches its recent rapid growth.

At least one thing we can count on: When Twitter eventually does start bringing in revenues, we can expect it to be equally vague about that.

6. Digital 3-D will go mainstream
Jeffrey Katzenberg, CEO of Dreamworks, has made no secret out of his faith in digital 3-D -- whether he's announcing in September that every new Dreamworks film is now being produced in 3-D, or just beaming a 3-D version of himself into IBC 2008 (complete with 3-D fish in the background!).

Consumers have already shown they are willing to pay more for 3-D flicks, resulting in larger revenues for movies like Journey to the Center of the Earth and Hannah Montana/Miley Cyrus: The Best of Both Worlds Concert Tour... and 3-D will often keep viewers flooding in long after a film's release, making the technology useful in combating declining ticket sales.

Taking all that into account, it's easy to believe that 2009 could be the year that 3-D takes the film industry by storm, despite naysayers like Roger Ebert. Besides, if all Hollywood flicks will be in 3-D in five to seven years, as Katzenberg himself has predicted, we'd better get a move on.