When Verizon said it was buying AOL, there was much speculation about whether the telecom giant would want to hang on to the company’s media assets—that is, The Huffington Post, TechCrunch, etc. Many (including me) were skeptical about whether Verizon would want to keep them, since media doesn’t generate a huge amount of income. But for now at least, it appears that HuffPost is sticking around, and it plans to use its new parent’s deep pockets to expand into video in a significant way.
Co-founder Arianna Huffington—who recently signed a four-year deal to remain with the publication she created—told the Hollywood Reporter that the site is staffing up to launch a CNN-style 24-hour video news network called HuffPost 24. The new service will apparently feature live news and short-form video, as well as original TV-style series content and documentaries, and will be available through the website and mobile apps, and through over-the-top and video-on-demand services. Said Huffington:
Huffington Post has had a video offering for several years now, called HuffPost Live, which has focused primarily on interview-style TV show content. What the site is talking about now is turning that video unit into a full-fledged television and movie network known as HuffPost Studios: According to the company’s founder, it will have separate divisions that will create TV and movie projects—including feature-length films—as well as acquiring and licensing them from others.
The site has been working on bulking up its video for some time now, but this is the first time its founder has talked about the full scope of her ambitions in that area, and the fact that Huffington Post wants video to be at least 50% of its content in the future.
It seems clear that HuffPost wants to make full use of the resources of its new owner, Verizon, which just closed its acquisition of AOL a few days ago. For its part, Verizon is no doubt salivating at the prospect of offering all of that video to its mobile users, along with ads targeted with AOL’s ad-serving technology—something many saw as one of the key factors driving Verizon’s purchase.
The only real problem standing in the way of these ambitious video moves is that virtually everyone else in the media industry is either working on or planning the exact same thing, and many of them have far greater skills and even deeper pockets than Huffington.
VICE, for example, has its own HBO channel and is expected to expand that after an investment by A&E Networks that values the company at more than $2.5 billion. It already has a 24-hour news network that it recently launched in Canada (where the company was originally founded as a lifestyle magazine), and co-founder Shane Smith has said he wants to become “the next CNN, the next ESPN and the next MTV.” According to one report, VICE has already sold three years worth of advertising for its channel.
BuzzFeed is also counting on its video division, which it is calling BuzzFeed Motion Pictures, for a large part of its future growth: The unit is run by online-video veteran Ze Frank, who said recently it generates more than one billion views of its video content a month. At the recent Cannes Lions advertising forum in France, co-founder Jonah Peretti said the company—which initially frowned on the idea of creating TV-series-style content—is working on a number of projects.
Another company that has said it is betting big on TV and film content, and has extremely deep pockets, is Amazon (AMZN). Its Amazon Studios division is already a fairly significant player in independent TV and movies, with shows like Transparent and new offerings it is working on with stars like Kevin Costner. It distributes its content through its Netflix-style Amazon Instant Video service, and the company recently said it plans to produce movies and distribute them online.
In addition to these new competitors, the market for video also includes every existing TV and movie provider, as well as established digital players like Netflix and YouTube. And they are all doing it for the exact same reason that Arianna Huffington and Verizon are: Namely, that whatever money there is in digital advertising is predominantly in video. But will that continue to be the case, or is there a video advertising glut looming as all these players converge?