2010 Year in Review: Online video--the genie is out of the bottle

The top 5 stories of 2010 in online video? How about the Top 20? The online video industry was abuzz in 2010, with everything from new devices to content deals to new technology--and fights over it--making headlines.

One of the big stories, Comcast's acquisition of NBC Universal, isn't over yet... a decision by the FCC to approve the deal, which is pretty much a foregone conclusion, likely will happen in the first quarter of 2011. New rules for net neutrality, meanwhile, may have been voted on this week, but the impact of the FCC's ruling will likely be a major story next year.

There were also a few stories that weren't in the industry spotlight this year.

Despite a huge increase in streaming video traffic--it makes up some 37 percent of Internet traffic during traditional TV hours; it breaks down like this: 21 percent is Netflix, 10 percent is YouTube and about 8 percent is Flash video--the Internet is still clipping along. No big crash. Business as usual. (I had one exec tell me he really isn't worried about the capacity of the Internet because "Someone will make something that compresses everything just a little bit more and we'll be able to fit everything in it that we want to." I like his style.) The amount of time users spent on the Internet is catching up to the amount of time viewers spend with TV (28 percent compared to 31 percent), yet TV ad spending outpaces Internet advertising 39 percent to 13 percent. This, too, shall change.

Another story expected to be big that seems to be fizzling (OK, my tongue is firmly planted in my cheek on this one, so you pay-TV people out there take notice)? Cord cutting. Despite record subscriber losses in the cable industry, and a first-ever two-straight quarters of subscriber defections in the overall pay-TV industry, ESPN says a study it conducted with Nielsen shows that no one really cuts the cord, all they do is jump to other services. Time Warner chief Jeff Bewkes agrees, even though his HBO subsidiary is expected to lose 1.5 million subscribers this year and is looking at going--wait for it--over the top with its HBO Go product in 2011.

Verizon CEO Ivan Seidenberg, who has seen how disruptive technology can impact a business (does anyone have landlines anymore?), is a little more open in his assessment of OTT and its affect on pay TV: "We take the over the top issue with video very seriously," he said. "I think cable has some life left in its model... but that it is going to get disintermediated over the next several years."

How about a device story that appears to have ground to a halt despite a pretty promising start this year? Try this one: 3D TV looks like a dead duck.

Despite studies in the beginning of the year that predicted huge potential for growth in the segment, and thus potential for growth in the online video segment, newer research shows that the technology is a dud this year. I was at a Best Buy yesterday and I can understand why the company last week in its 3Q earnings report said sales of 3D TVs were way behind projections... Glasses to view 3D TVs were locked away, some displays were empty and signage was woeful. What we've got here, as the Cool Hand Luke line goes, is a failure to communicate--with consumers. We'll see it regather steam in 2011.

That may be the issue as well with Google and its Google TV software platform, which has performed miserably this holiday season. In fact, Google appears to be going back to the drawing board on Google TV, asking CE companies who planned to centerpiece it at the Consumer Electronics Show next month to abort their plans. We're sure to see it again in 2011.

What else didn't we see in 2010? Major consolidation in the OVP segment. Yes, there was some, but nowhere near the amount predicted by all. Maybe it's because, as the saying goes, a rising tide lifts all boats and there was so much business to be had this year that everyone was raking in the cash. More likely, we'll see it in 2011 as the VC on the books runs out.

There were plenty of big stories that have been ridden hard this year. Read on to see my Top 5... and don't be shy (I know you won't) to tell me what I missed. I'll run a follow up soon with your suggestions. Just be kind, after all, it is supposed to be a happy holiday season.

By the way, we're taking a holiday break here at FierceMarkets, but FierceOnlineVideo will be back in your inbox Jan. 5, and I'll be posting any big news before then online, so check back. Until then, have a safe and happy holiday. We'll see you at CES.--Jim

Suggested Articles

Subscription video streaming services are increasing their share of the money consumers spend each year on internet TV and movies.

Facebook just released a batch of new updated features for its video platforms across live, Watch Party and Creator Studio.

A new lawsuit is alleging that AT&T inflated subscriber totals for DirecTV Now (which has been renamed AT&T TV Now) by creating fake accounts for the…