User-generated content (UGC) or more broadly speaking, short-form video (from services like YouTube and Dailymotion), has become far more than cats playing the piano, according to ABI Research (www.abiresearch.com).

Companies are using viral ads to extend brands and reach a wider breadth of customers than traditional media channels. Professionally generated short-form content also allows consumers to view video (e.g. news) in bit-sized manageable chunks, ideal for today’s hectic lifestyle. The revenue potential for short-form video is expected to approach US$13 billion by 2019, carrying a six-year CAGR [compound annual growth rate] of 18.5%.

"As the overall online video market evolves we anticipate the value for short-form video will rise in kind. Multi-channel networks (MCNs) that work with content contributors and advertising agencies targeting services like YouTube are finding suitors and partners among some of the largest industry players in video. While much of this is linked to preparations for the future, these are aggressive steps forward that could help define the what, how, when, and where we watch content," says ABI Research Practice Director Sam Rosen.

In the greater context of the online video market, which includes OTT content (mid- and long-form content) and short-form video, the latter’s share of the market is expected to decline, but this is attributable to stronger revenue growth opportunity from OTT [over-the-top- services like Netflix, Hulu, and VUDU, which often generates more revenue per play. Overall the online video market is expected to reach over US$56 billion by 2019, with a sxiyear CAGR of 23.1%.

"Subscription services such as Netflix continue to headline the market, but EST in North America is starting to gain momentum," says ABI Research Senior Analyst Michael Inouye. "While initiatives like UltraViolet continue to make progress many still view the market from a service-centric point of view, leaving opportunities for companies to try differentiation strategies to win consumers. The landscape for video is shifting, but so far it continues to move at a steady pace, rather than in seismic shifts."