In 2017, consumers spent more time — and advertisers spent more money — on digital media than ever before. Meanwhile, traditional formats remained stagnant or showed signs of deterioration. And Google and Facebook continued their reign as clear winners in the space, controlling the majority of global ad revenue. In the year ahead, digital media companies will aim to diversify revenue streams — with subscriptions, e-commerce, and brand licensing — to reduce reliance on strained ad revenues. Video will continue to be a major focus for brands, publishers, and social media platforms, and consumers will benefit from higher investments in high-quality content. Advertisers will start placing more emphasis on reaching Generation Z, as older members of this cohort begin to enter the workforce and gain immense spending power.

Below are our top predictions for the digital media industry in 2018. These predictions are based on our ongoing tracking, analysis, and forecasting of the digital media market, and conversations with industry executives.

1. Mobile video will hit a tipping point: Users will become more receptive to "leaning back," high-quality content will proliferate, and new revenue models will be tested:

  • Mobile video will become premium. Investments in creating premium video programming for mobile devices will ramp up. High-end short-form series, which are similar to traditional TV programs albeit much shorter in length, will become more common. And efforts on behalf of digital platforms to siphon ad dollars away from TV will accelerate.
  • Social video will become more like TV. Snapchat will continue developing its Snap Shows format and, tapping into its partnerships with television incumbents like Time Warner and NBC, will experiment with higher-end, scripted content. Facebook will continue to refine its Watch content to target an older, more global demographic than Snapchat Shows caters to. Google will keep the course of developing professional original video for both its free YouTube and premium YouTube Red tiers.
  • Traditional TV will become more mobile. Projects like Vivendi’s Studio+, Jeffrey Katzenberg’s New TV, and Blackpills, which is partnered with Vice, picked up on this emerging trend early. AT&T CEO Randall Stephenson, who has been staunchly advocating for an AT&T-Time Warner merger, entertained the idea of creating shorter cuts of Game of Thrones. Netflix has said it’s testing [...]