As 2011 comes to a close, it is hard to deny that it was a definitive year for online video even against the backdrop of the assertive pace that the industry has been on for the past few years.   The highs and lows of the year seem to be tightly intertwined.  Among some of the prominent ones, Netflix set the high water mark for online video success by becoming the largest video subscription service in the US based on subscriber count, only to come crashing down a few months later for different reasons.  Even though Netflix still has an impressive subscriber count, due to management missteps and decline in investor confidence, it is no longer the invincible juggernaut it appeared to be earlier in the year.  It also demonstrates how volatile an industry we’re in, as do some other examples from 2011.

Recent rumors of Verizon’s interest in acquiring Netflix indicate shifts taking place in the world of PayTV as Verizon extends its video services to OTT.    Similarly EchoStar earlier in the year closed acquisition of the assets of Move Networks, and its related company, Dish, subsequently acquired Blockbuster out of bankruptcy protection.   Combined with Echostar’s prior acquisition of Sling Media, one has to question whether this is a ‘kitchen sink’ approach to addressing the disruption of PayTV by OTT, or something more strategic.  Time will tell.

Meanwhile, another PayTV industry initiative –TVEverywhere – finally seemed to gain traction in 2011, despite prevailing skepticism about it earlier in the year.   Its slow and steady progress in 2011 would suggest that it is gathering steam , augmented by the recent announcement about HBO Go now being available to 98% of HBO subscribers .

Similarly, UltraViolet finally launched with the first few titles in Q4, though it is still early to conclude where it is headed.

Hulu’s aborted exit attempt may also suggest an inflexion point in how broadcast networks view OTT.  Regardless, Hulu hit its stride in 2011 and validated the premise of Hulu Plus by reaching its year-end target of 1 million subscribers by September.

Among the other advances bridging traditional and OTT video, we may look back and realize that 2011 was the year when one or both of Google and Apple finally got their act together after a first ill-conceived attempt of GoogleTV and AppleTV respectively.  This appears to be the subtle message at least for now from ‘…Steve Jobs “I’ve finally cracked it”…’ to the recent upbeat tone of Google’s Eric Schmidt about GoogleTV’s adoption by television manufacturers.   In this vein of bridging traditional and OTT video, second screen applications had their share of controversy and adoption, as various MSOs tried to roll out iPAD applications for linear and VoD content, and meeting resistance from programmers around content rights issues.  Whether the future lies with Connected TVs, second screen applications, or both, it would seem that Google and Apple would both have potentially significant roles to play going forward and 2011 may be the year they found their mojo.

I can’t close out this piece without mentioning the 800 pound gorilla of online video, namely YouTube.  With initiating its quest for premium content and original professionally produced content in 2011, YouTube signaled that indeed the game has changed in online video.  2011 may well be recognized as the year when the definitive bridges were built or the lines were blurred – depending on how you want to look at it – between traditional video programming and OTT.

There were dozens of other noteworthy developments in the industry, some major, such as the emergence of Facebook as a prominent video destination, Amazon offering free video streaming content to Amazon Prime subscribers, and Walmart, the largest DVD retailer, launching its VUDU online video service.  There are far too many to cover here,and having been engaged in the industry since 2004, I cannot overlook the importance of 2011 as a year when a lot of things changed and coalesced.  How this plays out in 2012 and beyond can only get more interesting!

Stay tuned!  If you think I missed noting something that is significant or noteworthy, I welcome your comments on here for everyone to see or drop me a line at sam@21techmedia.com!

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