The Second Wave of Online Video

The Second Wave Of Online Video Is Coming. Here’s What It Will Look Like

Somewhere between 300 to 500 hours of video are uploaded to YouTube every minute. By 2020, if you decided to watch every single video that was uploaded in a one-month time frame, it would take you 5 million years. In the same year, Cisco predicts that around 75% of global mobile data traffic will come from video.

On the enterprise side of things, metro police stations can generate up to 10,000 (or more) hours of video a week. As the ability to capture useful data from video becomes more efficient, companies will move more and more to remote video monitoring for security and quality assurance. In fact, internet traffic generated from online video security monitoring doubled in 2015. Video is big, and it’s only going to get bigger.

With serious players like YouTube, Vimeo, BrightCove, and Kaltura, it’s easy to think there’s nothing left for video startups to do. But is there?

Second Mover Advantage

Before we answer that, let’s talk a little bit about first and second movers. The saying “the early bird gets the worm” may be true when it comes to breakfast for winged creatures, but in tech that’s not always the case. While first movers occasionally come out successful (i.e. Coca-Cola, the Sony Walkman, Hoover), more often second movers end up as the real winners.

First movers may have an advantage when it comes to grabbing an early piece of market share, securing patents, and making deals with key partners, but second movers can quickly learn from a predecessor’s mistakes and piggyback on their successes. When it comes to R&D and consumer education, first movers often bear the bulk of the initial expense, while second movers build on their work at much lower costs.

Take Google, for instance. Google was the 21st search engine by some counts and was founded a full 5 years after early search engines. Facebook followed Friendster and MySpace and quickly dominated the social media market. Then there was Apple’s iPhone which swiftly overturned Blackberry’s early successes in the smartphone industry.

In the video industry as it stands today, the dominant parties in early video like YouTube and Brightcove are now playing the role of first movers. They see a second wave of innovation coming and they’re making changes to adjust to the market’s new needs. But they’ve got their own first-wave-era business models working against them. There’s plenty of room for a second mover to take over and dominate the coming wave of innovation in the video industry.

The Wild West Of Video

Back in 2005 and 2006 the tech world witnessed a confluence of events that became the catalyst for the first wave of video. We were on the brink of change. Users were just starting to record video on early smartphones, but there were few ways to store or share their recordings. But then Amazon Web Services launched in the spring of 2006, bringing with it cloud computing. Bandwidth speed increased and became cheaper while the cost of storage for large files decreased from a few dollars a gig to a few cents. The time was ripe for online video to become huge.

No one knew what they were doing. Naysayers swore that there was nothing in video and that consumers wouldn’t watch online content. The rest of us were just trying to figure out how put all of this new tech to good use and make a product consumers would love.

Around that time, I founded a company called Twistage, a P2P content delivery network to help users share large files. We wanted to show off our capabilities, so we created a website called Vlogville that allowed users to upload, store, and share their videos. Once we finished that site and saw what it could do, we were like, “hey, maybe there’s something in this,” and Twistage quickly pivoted to become an online video platform.

Back then, video pioneers, myself included, were so focused on digital rights management and protecting copyright that we almost didn’t notice a little company called YouTube. One day one of our investors asked us “have you heard about utube?” We searched online for this upstart utube and finally came across YouTube and the famous first video of a guy at the zoo.

From the beginning, YouTube had a key advantage: it wasn’t as concerned about digital rights as the rest of us, and it was the first to create a real social video platform. Now users could upload videos, share them, comment on other videos, and follow other users. By the end of summer 2005, YouTube had received tremendous traction and essentially won the race as the platform for online consumer video.

Once Kaltura, Brightcove, Vimeo, Ooyala saw that YouTube was dominating the B2C market, they pivoted to take over other niche markets in the video industry. My company Twistage, also pivoted from B2C to go after B2B. After about 2012 to 2013, the first wave began to level off as the big players either IPO’d, exited the market, or were acquired. OVP never reached the multibillion dollar mark like many people predicted, but at this point in time, most were saying video was done, that the big companies made their mark, and that there was little market share left for startups.

A New Model For A New Era — Video as a Service

Fast forward to 2015. When Stian and his business partner, Kasper, started Fido.Studio, an app that allows production studios to capture live video from cast members, they ran into a problem: they had to choose between an inflexible video CMS or building their own video platform from the ground up — a time consuming and difficult process.

Stian had seen this problem a few years before when he built an app that allowed users to remix musical tracks and add video to them, but with Fido.Studio, the problem became even more clear. Most existing video platforms like Brightcove or YouTube offer little in the way of flexibility. You have to choose from a limited set of options and can’t customize the platform to fit your needs. If you choose to build your own platform, you’ll spend hours upon hours coding like Stian did to build Fido.Studio’s flexible infrastructure.

Stian and Kasper went on to make successful deals with several large production studios. However, they were commonly asked “What’s the infrastructure behind Fido?” They quickly discovered that their customers had the same need as they did: a flexible and affordable video platform.

The big players in today’s video industry got their start over a decade ago during the first wave when video was all about entertainment, education, and content management. Their business models are outdated, expensive, and non-customizable.

When Stian saw the hole in the market, he pivoted from Fido.Studio to build Synq, an API video platform, to give developers the flexibility they need at the price point they can pay. The beauty of this business model is that developers can do anything they want with Synq — video isn’t just for the entertainment and education industries anymore. Insurance companies, manufacturing plants, and large enterprises can now integrate Synq’s API into their systems to efficiently manage, store, transcode, and analyze video data.

Here Comes The Second Wave

Just like the confluence of events in 2005 through 2006 allowed for a storm of video innovation, we’re seeing another confluence now, a decade later. First, with the advent of companies like Twilio and Stripe, API solutions are on the rise throughout the tech world. Developers are now used to being able to integrate payment platforms, voice communications, location data, and site search into their projects with just a few lines of code.

Matt Murphy and Steve Sloane of TechCrunch say it well: “Developers realize that much of the functionality they need to build into an app is redundant to what many other companies are toiling over. They’ve learned not to expend precious resources on reinventing the wheel but instead to rely on APIs from the larger platforms, such as Salesforce, Amazon and, more recently, specialized developers.”

When it comes to video, however, developers’ choices are limited. While the big players in video do offer some options in the way of APIs, they aren’t prepared for this second wave. Their business were built in a different era and aren’t designed for today’s needs when it comes to usability and pricing.

Second, there’s a huge volume of content being produced. Users and enterprises alike are creating thousands upon thousands of hours of video. Police body cams, security and equipment monitoring cameras, and insurance company claims departments all generate huge volumes of video data, and companies need efficient ways to analyze, store, and manipulate that data.

Finally, with artificial intelligence, we can now get deeper insight into the data contained in video. First wave companies weren’t able to drill down into that data. You could get transcription at the time, but we didn’t have the capabilities to offer image recognition, voice recognition, and the like — the kind of intelligence that’s all the rage in every other part of tech. Deep learning integrated with video can help an insurance company’s claims department resolve claims faster, give companies that use remote video monitoring the ability to efficiently escalate security or quality assurance concerns, and allow police departments to quickly analyze videos of incidents.

Video Is Not Done

While the first wave of online video focused on entertainment and education, the second wave is going to be all about video as a service, flexibility and deep learning. . The new technology, more demand, and a new business model mean the industry is ripe for disruption. Video is far from over. In fact, I think we’re just at the beginning.