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SMBs will drive growth in the online video market
I've had some really interesting discussions with several industry leaders lately about the opportunity in bringing online video to the small to medium-sized business market. After hearing many different opinions on the best way to serve these customers and win business in this niche, I think there are many viable approaches being trialed currently.
Much of the contention I found dealt with the amount of interaction and support an online video company needs to or should provide to these small business customers. While some companies stressed the need for one-on-one interactions and education, others highlighted that busy business owners likely want a really simple solution they can purchase using a credit card.
It also became apparent that interest in and deployment of online video solutions are not endemic to one particular vertical or business niche. None of the people I surveyed could definitively name a specific vertical like healthcare, for instance, that is adopting online video at a faster rate than others. Instead, everyone I talked to said rapid growth was occurring in the space in general. It appears as if the price points and ease of deployment may have hit the inflection point needed for small businesses to begin investing in online video en masse.
I feel this space is crucial to the development of sustainable business models for online video platform companies. The market opportunity in the small business space is orders of magnitude larger than solely providing to big media companies and others who move large amounts of video. Though each specific customer acquisition will be much smaller than bagging Disney or CNN, the sheer number of small business prospects and the margins associated with inbound sales to them make this an exciting space to play in.
I'm certainly not the first to notice this, as all the companies I surveyed are trying to get a bigger slice of this opportunity. I truly believe several of the players will find a way to get very profitable addressing the needs of these companies, as the nascence of the space and the low level of current penetration bode well for multiple winners to emerge.
I'm excited to keep watching the development of the small business market for online video products, and I'm always willing to listen to success stories or hear more about how your company is addressing this market.
Comments
Posted by Lee Williams | July 29, 2009 - 4:17pm
Pete, the SMB market is defintely taking up video faster than corporates, here in New Zealand. Our company silverlinemedia.tv, is the leader here, we've created and marketed ove 1,500 SMB videos in last twelve months. There are some industry trends - tourism, real estate and service industries such as cafes/restaurents. These are busines categories that have embraced the web and understand at the coal-face where they get their true response from.
Posted by Jeff Bach | July 29, 2009 - 8:00pm
Hi Pete,
I agree with you. I also think that there will be a required evolution in the media companies serving this SMB market and that will be difficult. My first thought is the cost of making a sale and the length of the sales cycle for an SMB client, closely followed by all the non-chargeable costs of getting new business.
Let's say that a media company is used to doing 50k projects. What happens when the average project tends towards 5k or less, instead of the 50K? On the upside, some costs will drop, as there will be more of these smaller clients around locally, so travel costs will drop somewhat. But SMBs are just as finicky as larger clients and possibly more prone to sudden cancellations, drops and changes of heart. SMB cash flow can be challenging.
My point is that a media firm that is used to bigger projects will be hard pressed to take their current cost structures and workflow and make them work with smaller clients who may not have the infrastructure the media company is used to dealing with. I also think that getting 10 small projects to replace the one larger project is not going to be easy to do.
I think that SMB clients and the smallish projects they are willing to pay for, will eventually require 1-2 person media companies. A media company with higher fixed costs is going to be hard pressed to make it all work if they depend on SMB clients.
Posted by Simon Gornick @Spotcher | August 2, 2009 - 1:41am
Great piece, Pete. Very insightful. We're targetting SMBs and bloggers with our new app, so it's great to hear that we could be on the right track. Much of this has to do with a greater role for SMBs in the wider economy, and confluence of that development with each company's more acute understanding of their own marketing needs.
Posted by Pete Wylie | August 3, 2009 - 8:38am
Thanks for the great comments everyone. I'll continue to watch this sector closely. Thanks for reading.
Posted by James Wood - HD-Productions.biz | August 7, 2009 - 5:35am
Thanks Pete,
This article bears what we do when working with businesses who need to maximise their online investment, ecommerce, marketing and web hosting. We explain you've already got a domain and server space they've bought.
Buy using video across a range of sites they can quickly and cheaply engage with a worldwide audience 24/7, take orders and enquiries about their product or service and answer them, when they next return to the office.
Online video marketing is more cost effective than print, radio and broadcast options when going by price per 1000.
Companies like ours are creating added value to the SMB sector and extending their reach and reputation with both new and current customers.
James Wood
HD Productions
Online Web Video Marketing and Productions
http://www.hd-productions.biz
Posted by Alan Tone - ProVDN.com | December 14, 2009 - 8:30am
Thanks Pete,
It's reassuring to hear that my startup company is going in the right direction. I own a small video production company in DC and have been a serial entrepreneur since the 90's. While looking for an OVP for my production company I was astounded by the lack of products that were simple to use and affordable.
So I have built my own OVP, www.provdn.com and am launching it Jan, 1 2010. We are geared towards small media companies and business/event videographers with prices starting in the $30s. The platform features On2 encoding is super easy to use, and we have partnered with Highwinds for content delivery. Wish us luck!
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