The collaborated efforts from AOL and Google’s YouTube, to monetise short-form video through advertising, will boost the over-the-top (OTT) video market and allows development of effective business models and boosts revenue potential, according to report.
According to estimation from IMS Research, there were 693 billion ad-funded video streams in 2011.
IMS Research’s Business Model Evolution in OTT and On-demand Video Markets – 2012 Edition, revealed that premium, long-form content will drive revenues in the OTT video market.
Thus far advertising revenues are projected to reach $13.4bn in 2017 over $20.6bn in revenues created from pay-per and subscription OTT video services.
IMS Research principal analyst Anna Hunt said growth in revenues from in-video OTT advertising will be mainly driven by the growth of OTT video consumption, especially as streaming of short-form content via tablets and PCs becomes even more popular.
"Companies such as Google and AOL will have a significant share of these revenues, as they implement tactics such as forming new strategic relationships to monetize original video assets, directly approaching ad buyers, and offering guarantees for audience delivery."
"Although most companies are not large enough to sustain their business solely on OTT advertising revenues, aside for widely-popular portals such as YouTube, advertising is and will continue to be an effective method of monetizing OTT video.
"IMS Research forecasts that the rate of growth in OTT advertising revenues will become stronger over the next five years."
In the interim, firms exclusively committed to OTT video distribution have been planned around a blend of advertising and models, while larger media companies, broadcasters and channel networks have not to be dependable on ad revenues from OTT platforms, the report revealed.