One month ago, TechCrunch posted several of my predictions for the digital media world in 2015 in an article titled The Future of Digital Media in 2015. I then expanded upon that article here to give my very own Top 10 Digital Media Predictions for 2015. Although we are officially only one month into this brave new year of digital media, many of the predictions are already coming true . . . and in a very big way.
Below are those actual top 10 predictions—juxtaposed against where we stand on each as we enter only the second month of 2015.
PREDICTION 1—this one was really a two-parter:
Part 1—The mobile-driven premium short-form video YouTube economy “grows up,” and traditional media companies finally take notice on a mass scale. Shell-shocked studio executives internalize that digital-first platforms are where they must be to reach smartphone-obsessed Millennials. MCN acquisitions will quicken as more studios jump into the M&A game rather than try to figure out this new content platform themselves. Some leading MCNs ripe for acquisition include . . . sports-focused Whistle Sports (in which Manatt Venture Fund is invested).
THE REALITY FOR PART 1, 30 DAYS LATER—Whistle Sports in early January announced a major $28 million investment from “traditional” media companies BSKYB and Liberty Global. Not M&A, but certainly strategic. Very.
Part 2—International also becomes a major new battleground for these borderless video opportunities.
THE REALITY FOR PART 2, 30 DAYS LATER—Whistle Sports again— both BSKYB and Liberty Global are major international media companies based across the pond. In addition, a deal was announced in late January by mega-media companies Warner Bros., Sony Pictures Television and SingTel to essentially take over the OTT world in Asia. That qualifies in my book.
PREDICTION 2—Major consumer brands follow suit and act in earnest. Massive marketing dollars shift from traditional media to more measurable digital platforms in the form of branded content (not just ads), cannibalizing the former for the first time. Major investments are placed on ad-tech companies to maximize and measure those spends. We see a number of significant ad-tech exits like Yahoo!’s recent acquisition of BrightRoll for $640 million. Several brands go further and invest big to become digital-first lifestyle media companies themselves à la Red Bull, developing and aggregating content. GoPro, Pepsi and Marriott have proudly announced such ambitions.
THE REALITY, 30 DAYS LATER—No major developments here . . . yet! But, keep reading . . .
PREDICTION 3—Seeing all this activity, Silicon Valley investors increasingly make pilgrimages down South to the epicenter of media content – Los Angeles.
THE REALITY, 30 DAYS LATER—Many of us on the Manatt Digital Media team are based here in Los Angeles. We see this happening before our eyes. In fact, we saw it immediately out of the gates of 2015 at CES, where NorCal VCs were seen intermingling with L.A.-based new digital-first video companies up and down the Strip.
PREDICTION 4—YouTube is increasingly under siege by new competing video platforms like Facebook and former Hulu chief Jason Kilar’s Vessel. These “off YouTube” platforms lure content creators away with promises of more compelling care, feeding and economics (including the tantalizing prospect of real subscription revenues).
THE REALITY, 30 DAYS LATER—Vessel officially set sail against the YouTube tide in private beta just in the past week—and Facebook video is at the center of digital media exec conversations everywhere. Oh yes, and don’t forget Snapchat. Snapchat is now officially a media company, having launched an alternative video platform under the name Discover in late January. I’d say this prediction already has been satisfied—and we’re only going into our second month!
PREDICTION 5—Traditional pay TV packages likewise increasingly are under fire in the “Great Unbundling” that began in 2014. What was unthinkable just one year ago (even six months ago!) became reality as HBO, CBS, Starz and others announced stand-alone over-the-top (OTT) services. A parade of others follow suit in 2015.
THE REALITY, 30 DAYS LATER—And so it goes . . . Even the kids aren’t safe! Nickelodeon just announced its own stand-alone OTT service, joining this ever-growing list that we will need to revisit continually throughout the year.
PREDICTION 6—Traditional media companies facing these tectonic shifts in long-established business models – and major tech companies (Apple, Google, Amazon, Samsung) for which content is increasingly critical to fuel their own – take M&A seriously and one pulls the trigger as media and tech converge. . . literally.
THE REALITY, 30 DAYS LATER—We’re only 30 days into the year . . .
PREDICTION 7—On the music side, massive moves are made away from business model-challenged stand-alone services (Spotify and Pandora both are reported to still be operating at a loss). Like Apple buying Beats (which was never about the economics of Beats Music), numerous potential behemoth buyers exist.
THE REALITY, 30 DAYS LATER—It appears that Spotify is looking to find itself some extremely wealthy private buyers (not the anticipated IPO). Spotify has hired our friends at Goldman Sachs to raise a $500 million round. Now watch as reactive sparks fly among the remaining stand-alone services that have any kind of mass. Spotify sings. Now the other guys dance.
PREDICTION 8—Gamers see real action too as app developers increasingly focus on storytelling and compelling characters to build multiplatform media companies à la Rovio with Angry Birds. Rather than take traditional media properties and “gamify” them, these companies flip the model with an apps-first approach. Finland-based Silvermile and Seriously are two companies with Rovio roots to take . . . well . . . seriously. VR also enters the ring with gamers at mass in 2015.
THE REALITY, 30 DAYS LATER—Yes, this is happening . . . at an ever-accelerating clip. But, it is happening behind the scenes for now. No single-story earth-shattering news just yet. But, like I said, we’re only 30 days in.
PREDICTION 9—Which leads to wearables, where we see an Oculus under every hard-core gamer’s tree next year, alongside their parents’ new digital health/fitness watch.
THE REALITY, 30 DAYS LATER—2015 already marked a major milestone for Oculus and VR in general. Not directly on the gaming side. Rather, on the cinema side, as Oculus unveiled the world’s first major cinematic VR “experience” at the Sundance Film Festival. In my book, this qualifies at least as being on the right track. And, remember, we still have about 320 more shopping days until next XMAS—so plenty of time to slip one under this coming year’s tree.
PREDICTION 10—All of this leads to the big one—a concept I floated 1.5 years ago. Apple buys Tesla. Now THAT would be a headline for 2015!
THE REALITY, 30 DAYS LATER—We’re not quite there yet, but Musk just announced a new SOFTWARE UPDATE that actually makes Teslas go faster. Think about the implications of that alone . . .
No matter what you think about these top 10 predictions—or how the digital media world is tracking to them in the early days of 2015—it cannot be denied that the pace of activity continues to accelerate.