Online video "represents the most explosive growth area in the digital space in the next three years," said David Cohen, chief media officer at Universal McCann. EMarketer predicts that the space will grow more than 40% annually for the next three years, before leveling off to a still-robust 20%.
But booms are never evenly distributed. The online-video market was about $1.8 billion last year, with half of that going to just two players: Hulu (about $300 million) and YouTube (about $600 million), according to Brian Wieser, an analyst at Pivotal Research Group.
"While our figure remains ahead of the television industry, growth outside Hulu and YouTube seems to be far from exploding," Mr. Wieser said in a recent research note.
Most of the advertising growth in online video will happen because it steals chunks of the $70 billion spent on TV in the U.S. But simply producing high-quality video doesn't automatically attract vast sums of TV dollars. Those dollars also want TV-like scale, and not many players have both: mainly YouTube and Hulu.
"I have seen almost no evidence of anyone being able to build a sizable audience for these shows," said Tod Sacerdoti, CEO of BrightRoll, which operates a video advertising network and an exchange for video ads.
