Verizon today announced that it was buying AOL for an astonishing (at least to me) $4.4 billion.
According to most sources, they were buying AOL because they want to get into the online video business.
I am not sure if AOL is the right way to do this, but clearly the future for anyone is online video.
This is a classic case where the platforms for content (and hence the demand) has vastly outstripped the capacity to produce quality content for those platforms.
The number of video platforms (screens and ‘channels’) has exploded. From 3 billion smart phones to tablets to computers to TV screens to gas pumps to elevators to the sides of buildings – screens and hence video, are everywhere.
But where is the content?
While the platforms have expanded exponentially, the production side is still run as though it was 1986. Studios, expensive gear, complicated production processes.
So there’s a vacuum.
And Verizon is seeking to fill that vacuum- at least in part.
So they’re spending $4.4 billion in the expectation that the ability to produce video content in volume is going to be a big business.
Verizon is very smart, but they don’t produce content.
AOL does.
But I don’t think it’s particularly good or particularly well done.
Never the less, the demand for content is clearly there and it is only going to grow.
The funny thing is that those same smart phones that are the platform for video are also the tools for producing the content – just the kind of content that the vacuum demands – fast, cheap and good.
Video production stands poised to become the biggest growth business of the next 20 years.
The demand is certainly there.
And the tools are… well, in the palm of your hand.
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