Last week, my counterpart at DBG, Chris Young, wrote about the seven trends that will shape online video 2011.  Here are nine realities that will shape online video in 2011 and beyond.

1)     Growth will come from online video, but overall dollars will remain small. When the going gets rough, I remind myself that “at least we’re not in the print business.”  Online media continues to grow and online video is its engine of growth.  But the reality is that it remains a fairly small slice of the pie.  According to Magna‘s latest figures, online advertising will overtake newspapers by 2013 but TV advertising will command a 40% share of all ad dollars and gain 7.5% annually through 2016, at which point online video will account for $11.4 billion in global ad spend.  Where online video trumps television advertising is in growth rates.

2)     Will Ferrell, Justine Bateman and company are exceptions, not the rule. The thing is, growth rates excite investors but do little to get talent stoked.  For that reason, I suspect that while we will see more celebrities dip their toes in online productions, “Hollywood” will focus on where the real money is — and that is television.

When the recession hit in 2008, it definitely gave actors an incentive to test the online waters, but as the economy returns and fades away from print and gravitates towards online, television shows no signs of weakness for a few more years to come.

3)     YouTube isn’t mainstream, and never will be. Oddly enough, YouTube is central to online video, with 44% of the video views in the U.S.  But by the same token, YouTube is increasingly becoming a parallel world.  Let’s face it, its most popular prosumer producers (the so-called YouTube celebrities) are irreverently irrelevant to the outside world.  Moreover, most large media companies use their YouTube presence sporadically.  Sure, YouTube is a fantastic promotional platform, but its rigid rules of engagement have made most media companies balk at leveraging the site as a commercial platform.

YouTube remains the product most likely to become the Google of online video. Still, while open to interpretation, the fact that a number of YouTube managers such as George Strompolos and Kevin Yen have left this year suggests that Google is doing everything in its power to prevent that from happening.

4)     Branded content vs. pre-rollIt need not be so black and white, but while branded content will grow in absolute terms, in 2011 it will continue to be more hype than substance.  That is not to say that in 2012 and beyond it won’t become a major revenue driver.

Sure, the 30-second ad has no place online, but with users showing a willingness to sit through 7-, 10-, 15-, or 30-second ads, it won’t disappear overnight, either.

It’s not that marketers aren’t interested in the concept of branded content, it’s just that the production of branded content faces so many headwinds that ad agencies will probably stick to the lower-hanging fruit for the time being: the pre-roll.

Of course, ideally pre-roll and branded content (and what each one represents, mainly) should co-exist.

5)     Viral UGC videos not going anywhere despite editorial and sales pressure. With more ad dollars flowing into the online video ecosystem and marketers continuing to shun user-generated content, increasingly you will see the largest portals and video destinations try to de-emphasize cat videos, skateboarding mishaps and videos of the “America’s funniest home videos” variety.  But that won’t prevent them from capturing a large share of views, which will largely go unmonetized.

6)     Ads as content.  The worst-kept secret is out: some of the most popular videos aren’t UGC but movie and video game trailers.  This phenomenon will actually put a downward pressure on online video advertising growth, because some of the largest spenders of media (entertainment advertisers) will insist on treating their ads as content and push for performance-based pricing models, which will keep spends down.

7)     Dominance of micro content. We also shouldn’t hold our breath for the “I Love Lucy” Moment Young is waiting for.  Back in 2005, AOL livestreamed Live 8 and frankly, that was the” I Love Lucy” moment that made me realize that online had gotten back its mojo and the future of video was promising (it also reminded people that AOL was still around).

The thing is, though, that apart from live events (be it music or sports), concurrent viewership is not something that is economically predisposed on the Web, largely because television continues to garner the real ad dollars and rightsholders are not stupid.

Aggregators and distribution companies will want content owners to believe that they should fully open up their Olympics or World Cup programming — but that won’t happen.

8)     IPO talk will increase. Brightcove, Hulu and Tremor Media are a couple of names you hear marching towards an IPO, but that will not happen in 2011, so the only viable liquidity event for investors remains mergers & acquisitions.

9)     Consolidation will continue. After many years of expected consolidation, 2010 saw a wave of acquisitions:

–        AOL acquired StudioNow

–        AOL acquired 5Min

–        Specific Media acquired BBE

–        Undertone acquired Jambo

–        Tremor acquired Scanscout

There is nothing to suggest that 2011 will be less busy.  Media companies who attempted to build from within have all but failed, and many of those will now look to buy — even though traditional media companies still don’t have a real idea of what they want to do in online video.