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Online Video’s 2008 Predictions Down By 65% to $505 Million

Predicting the Future with a Crystal Ball
Lionseye insights from AC Lion

Article By: Joshua ‘The Red’ Russak (

YouTube, which accounts for more than half of all video views, will generate a mere $200 million in sales in 2008…yet they still are among other “losers” failing to be a profitable company in the Online Video space. According to Dow Jones investors have spilled more than $8 billion into Online Video. Here’s some #’s (though they don’t add up to $8 Billion) that give you an idea of Online Video Spending over the past 3 years:

2005: $1.764 billion
2006: $2.117 billion
2007: $2.009 billion
2008: $453 million (Q1 only)

These numbers come primarily from AlleyInsider’s reporting on the Dow Jones VentureSource, which provided them with a running tally of venture investment in online video startups since 2005. The dealflow includes “video infrastructure (Brightcove), ad platforms (YuMe), service providers (VideoEgg), and consumer sites (FunnyOrDie, Veoh, Joost, etc). Between 2005 and Q1 2008, that tally is $6.06 billion. Add in one big acquisition — the $1.65 billion deal for YouTube ($1.65 billion) — and a few smaller ones — like Sony’s pickup of Grouper/Crackle for $65 million — and the grand total comes to $8.06 billion. Keep in mind this doesn’t include any of the billions invested in Europe or in China.”
Now according to a more recent AI article, Sorry, Investors: The Online Video Pie Just Shrank By 65%, according to eMarketer, “In February, the Web prognosticator said YouTube et al would sell $1.4 billion in ads in the U.S. this year. Now it says it was overzealous: It has ratcheted its estimate back by 64%, to $505 million.”
I really liked how AI broke down the $505mm and decided to copy and paste the text for all to see:

…here’s how a $505 million market would break down this year:

  • YouTube says it will generate $200 million in advertising in 2008.
  • We’ve estimated that Hulu will sell as much as $90 million.

That means the remaining $215 million, then, is divided between the following:

  • Big media companies like ABC/Disney, CBS, Time Warner, Yahoo, News Corp/MySpace, NBC U, and Viacom.
  • Video aggregators like Veoh, Joost, Metacafe and DailyMotion
  • And ad networks like Brightroll, Tremor, Husky and Broadband Enterprises

It’s really hard to see Online Video draw back it’s yearly quote predictions for the 2nd time this year, but there’s hope yet in terms of IAB taking yet another step closer to determining Online Video perameters. This is the first I’ve seen of it: Digital Video Ad Measurement Guidelines by the IAB. 3 CATEGORIES all committed to Online Video, while I find it interesting to see E-Mail only has 1 guideline. EVEN MORE INTERESTING, is the fact that it Digital Video is now a whole new category in “Emerging Interactive Platforms”, along with Games Advertising, Mobile and User-Gen Content & Social Media. I’m interested to see when these will be in full completion and what will take their place as “Emerging”. Either, I hope the best for Video and look forward to seeing YouTube lockdown their Ad-Model and finally bringing in the big bucks!