Ending Soon! Save 33% on All Access

The Video Revolution Will Not Be Televised Viewing habits and advertising trends are poised for a dramatic and sweeping change.

By Kevin Bobowski Edited by Dan Bova

Opinions expressed by Entrepreneur contributors are their own.

In the ongoing fragmentation of media that has already transformed the newspaper and music industries, the television business is the biggest and perhaps last traditional media giant to be dramatically affected.

Netflix and Hulu are eroding the base of this powerful industry. YouTube and Vimeo are destabilizing it. The advertising implications will be enormous as this industry is disrupted.

Billions of dollars of advertising and marketing dollars will be unleashed on nascent but growing digital video platforms. This migration of ad dollars is already happening in a steady trickle. But should the television studios' stranglehold on the video audience break, that trickle may become a flood.

Related: Personalized Marketing Is No Longer a Luxury

The waning power of TV.

Television certainly still holds major advertising power, but that's changing rapidly. Live TV viewership is dropping dramatically and will continue to wane as millennials dominate viewership.

The advertising impact of television (which no longer has to be viewed live) has also waned as DVRs have become prominent, letting viewers skip ads. Television advertising might experience an increase in spending with political ads being placed prior to the 2016 presidential election and because candidate debates appear on live TV. But the long-term trend of younger viewers relying on online methods of viewing is bound to continue.

Licensing is a large revenue source for televison studios but things are changing as companies like Netflix begin to develop their own original programming (witness House of Cards). And when a show is produced by a studio but broadcast online, this represents a transition to online advertising, much the way a newspaper article supported by online advertising represents a transition for publishing companies.

Cable is also facing deep disruption since its lucrative bundling structure may be unraveled.

As Time reported in April, "With all these changes, industry has reason to squirm. In a report last year, media analysts at the investment firm Needham & Company estimated that if all TV content were unbundled, the TV industry would take a $70 billion dollar hit, and all but 15 or 20 channels would disappear."

Related: Advertising Will Soon Reach a Digital Tipping Point

The new wave of digital advertising.

Advertising on cable and broadcast TV is a $78 billion industry, according to Nielsen. But television ad growth is slowing even as spending on digital video advertising is increasing dramatically. It's clear that advertising is following the audience. Online video advertising received 35 billion views in December alone, according to Business Insider, and is averaging 100 percent viewership increases each month in year-over-year comparisons.

With the rise of online media comes the ability to meticulously track impressions and conversions and connect advertising directly to ecommerce. With a traditional television ad, viewership has been the prime measurement of its effectiveness. For online advertising, though, everything from clickthroughs to conversions and impressions can be gauged.

The rate at which digital ad spending is growing is impressive (and is projected to double in four years).

This ad growth is fueling a flourishing of streaming services like Netflix, which reported a steep increase in earnings in the second quarter of this year as the company added 1.7 million new customers in three months.

The proliferation of channels and video sources is being supported by mobile consumers. Thus the annoying "push" advertising of pop-up and banner ads that consumers now largely ignore has given way to "pull" advertising that consumers actively seek out. This "pull" video advertising model has made video ads an effective online ad vehicle, averaging a click-through rate of 1.84 percent, according to Business Insider.

Related: Video Marketing Goes Beyond YouTube. Have You Explored These 3 Options?

Future trends.

This advertising revolution will not be a simple transfer from television screens to online digital sources. It will involve a transformation of how advertising is served, tracked and converted. Instead of a studio-and-agency model of video development and advertising production, more online video will be organically created, crowdsourced and user generated. Viral ads will be developed not in the war rooms of high-priced ad agencies but instead hatched by ambitious creatives with an idea, a camera, a laptop and some editing software. Stars will be minted through YouTube views and multichannel networks.

Television networks will still exist, but I expect they will operate like the newspaper industry today -- with smaller budgets: They will increasing be tied into digital and social channels and no longer serve as the dominant players in the medium.

The successful broadcast and cable television programming of the future will have to be nimble and innovative, capturing audience's attention with full integration with digital channels.

As the audience for television fragments across Netflix, Hulu, YouTube and multichannel networks like Fullscreen and Maker Studios, advertising will become more targeted, more data driven and more connected to social media.

Artful video curation and aggregation will become a valuable commodity. I predict that as the growth of content marketing sends an increasing deluge of video into websites, mobile devices and viewers' social media streams, the companies that manage to organize, curate and manage that overload of video will gain the trust of audiences.

After all, there is only so much content a person can consume. Content fatigue will be headed off by companies that deliver only the most inspiring, relevant and targeted video content to their audience. Waywire offers a good example: The company curates videos that directly appeals to a specific audience

For years now, product and service companies have been working to become content producers. Now they are realizing that they also must be content curators. So much video is flooding the digital world that automated and efficient ways to showcase video can yield dramatic results with minimal effort.

This wave of digital disruption in television will unleash a new round of innovation in video creation, curation and programming. Just like the rapid decline of newspapers set off a round of digital innovation with the arrival of companies like Slate and The Skimm and prompted newspapers like The New York Times to launch innovative digital arms like 538.com, video will also birth new companies and fresh online ventures at traditional television companies.

Advertising will follow the audience into a world of mobile, social and web-based video. The video revolution will not be televised. But it will be increasingly targeted and user-generated and curated. And companies will be launched in a new digital landscape where capturing audiences fragmented across many video platforms will become the new challenge.

The production and curation of video is more accessible than ever to small and midsized entrepreneurs. It can be a powerful tool for companies to gain widespread visual exposure among an audience of young consumers who are turning off television and warching video on smartphones, social networks and streaming services.

Related: What You Can Learn From These 5 Mega Brands On Creating Viral Videos

Kevin Bobowski

Chief Marketing Officer, Act-On sotware

Kevin Bobowski is Chief Marketing Officer of Act-On software, a marketing automation platform that helps marketers do the best work of their career.  Previously he served as vice president of marketing at Offerpop and ExactTarget. 

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Business News

TikTok Reportedly Laid Off a 'Large Percentage' of Employees as the App's Fate in the U.S. Remains Unclear

Laid-off TikTok employees were notified Wednesday night through Thursday morning.

Business News

Four Seasons Orlando Responds to Viral TikTok: 'There's Something Here For All Ages'

The video has amassed over 45.4 million views on TikTok.

Business News

More People Are Exploring Entrepreneurship Because of This Unexpected Reason

More new business applications were filed in 2023 than in any other year so far.

Personal Finance

This Investment Bundle Includes a Trading Course and Stock Screener Tool for $150

Approach the stock market with an increased understanding.

Growing a Business

5 Strategies to Know As You Scale Your Business

Scaling a service-based company requires a comprehensive approach that goes beyond simply increasing revenue. It requires careful planning, strategic decision-making and a deep understanding of market dynamics.