I'm heading out of the country for a 10 day family vacation starting tonight. I'll be online sporadically and will post a few times next week if there's something interesting happening. Otherwise, I'll be back in the saddle on Mon, July 13th, refreshed and recharged. I suspect many of you will also be taking advantage of the July 4th holiday to take some time off. Enjoy!

Below is the 23rd edition of the VideoNuze Report podcast, for July 2, 2009.

This week Daisy shares additional information about ESPN's Ad Lab for emerging media. The Ad Lab, which was first disclosed by ESPN last year, is intended to various ad formats in the ESPN video player. It is one of many different tests and research projects in the market. As Daisy and I say, everyone's trying to learn how best to monetize the nascent online video; this creates a lot of valuable data, which market participants then need to parse through to fully understand.

I get into further details on my post yesterday, "Video Companies Raised $64M in Q2 '09, Notching Another Stellar Quarter." Despite the recession and the slowdown in venture capital investments, at least 26 industry companies have raised at least $219M over the last 3 quarters, which is impressive by any measure. Still, it hasn't been easy, and one indicator of what investors prefer is that not one of the 26 investments is in a content provider or video aggregator.

Click here to listen to the podcast (14 minutes, 24 seconds)

(Note, with vacations planned, our next podcast will be July 24th)

Click here for previous podcasts

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Clearleap announces Atlantic Broadband as first public customer - Clearleap, the Internet-based technology firm I wrote about here, announced Atlantic Broadband as its first public customer. Atlantic is the 15th largest cable operator in the U.S. I spoke with David Isenberg, Atlantic's VP of Products, who explained that Clearleap was the first packaged solution he's seen that allows broadband video to be inserted into VOD menus without the need for IT resources to be involved. Atlantic initially plans to use Clearleap to insert locally-oriented videos into its local programming lineup. It also has special events planned like "Operation Mail Call." which allows veterans' families to upload videos, plus coverage of local sports, and eventually filtered UGC. By blending broadband with VOD, Isenberg thinks Clearleap gives him a "giant marketing tool" to raise VOD's visibility. As I've said in the past, VOD and broadband are close cousins which can be mutually reinforcing; Clearleap facilitates this relationship.

New Balance's "Made in USA" video - Have you seen the new 3 minute video from athletic shoemaker New Balance? Yesterday I noticed a skyscraper ad for it at NYTimes.com and a full back-page ad in the print version of the Boston Globe. New Balance's video promotes the fact that it's the only athletic shoemaker still manufacturing in the U.S. (though it says only 25% of its shoes are made here). There's also a fundraising contest to win a trip to one of its manufacturing facilities. Taking ads in online and offline media to drive viewership of a brand's original video is another way that advertising is being reimagined and customers are being engaged.

Joost - R.I.P.-in-Waiting - There's been a lot written this week about Joost's decision to switch business models from content aggregation to white label video platform provider. Regrettably, I think this is Joost's last gasp and they are in "R.I.P.-in-waiting" mode. Joost, which started off with lots of buzz and financing ($45M) by the co-founders of Skype and Kazaa, is a cautionary tale of how quickly the broadband video market is moving, and how those out of step can get shoved aside. Joost made a critical strategic blunder insisting on a client download based on P2P delivery when the market was already moving solidly in the direction of browser-based streaming. It never recovered. Given how crowded the video platform space is, I'm hard-pressed to see how Joost will carve out a substantial role.

Cablevision wins its network DVR case - Not to be missed this week was the U.S. Supreme Court's decision to refuse to hear an appeal from programmers regarding cable operator Cablevision's "network DVR" plan. The decision means Cablevision can now deploy a service that allows subscribers to record programs in a central data center, rather than in their set-top boxes. This leads to lower capex, fewer truckrolls, and more storage capacity for consumers. There's also an intersection point with "TV Everywhere," as cable subscribers will potentially have yet another remote viewing option available to them. Content is increasingly becoming untethered to any specific box.

• TubeMogul (3M) 4/1 - Trinity Ventures
• ScanScout ($5.1M) 4/13
• FreeWheel ($12M) 4/30 - Foundation Capital
• Azuki Systems ($6M) 5/5
• EveryZing ($8.25M) 5/11 - Peacock Equity
• Grab Networks ($12M) 6/2
• beeTV ($8M) 6/3 - Innogest
• YuMe ($2.9M) 6/12
• Nokeena Networks ($6.5M) 6/25 - Mayfield

(Note that I've included beeTV, which offers a cross-platform TV recommendation system, so isn't a pure broadband or mobile video company. On the other hand, one might argue that Sugar's $16M round should also be included, since the company simultaneously announced the acquisition of video-oriented Shopflick.com and launch of Sugar Digital Entertainment. However, I haven't counted it since Sugar's more of a pure blog network.)

Excluding Sugar, the $64M comes on the heels of approximately $75M raised in Q1 '09 and over $80M raised in Q4 '08. That means over the last 3 quarters - arguably the heart of the current recession - at least 26 companies have raised a total of $219M. To be sure, everyone I've spoken to has told me these rounds have been hard work to raise, but these companies' successes demonstrate the appeal of the broadband video sector to investors and their anticipation for continued rapid growth.

One thing worth noting is that of the 26 companies, not a single one is a video producer itself, or even an aggregator of video. There has been a significant shift in investor sentiment away from content and towards the platforms and tools required to power video. While that's lamentable, it's also completely understandable. The bruising advertising environment, combined with ongoing business model uncertainty and the death of certain independent producers (e.g. 60Frames, Ripe Digital, etc.) has frozen new content investments. Aggregators aren't faring much better. Just today it was reported that Joost CEO Mike Volpi is stepping aside, as the company tries to relaunch itself as a technology provider. Veoh also restructured during the quarter, shedding half its staff and replacing CEO Steve Mitgang (in addition, just yesterday a VideoNuze reader emailed me saying he can't seem to find a working phone number for the company).

Couple all this with the rise of Hulu, the dominance of YouTube, the entry of cable operators and networks with TV Everywhere, and it's clear that on the content side at least, incumbents and earlier market entrants are ascendant, while more recent entrants and startups are having a tough time surviving the downturn. I anticipate this will continue to be the trend, at least until the economy rebounds.

What do you think? Post a comment now.

If you haven't heard of Rhett and Link, you need to check them out to understand another of the myriad ways that video is being democratized, advertising is being reimagined and value is being built in YouTube. My wife brought Rhett and Link to my attention after hearing a report about them on National Public Radio last night.

Rhett and Link are two engineers and lifelong friends who operate out of a North Carolina basement writing and performing short comedic songs. Emboldened by family and friends they've created over 200 videos that have generated 16 million views and a loyal following on YouTube and their own site rhettandlink.com. No doubt you'll agree their songs and videos are funny, clever and very memorable.

Calling themselves "internetainers" and having generated a signature style, they are now being contracted by advertisers to turn their talent toward developing promotion songs. Their folk song drive-through order for Taco Bell has generated almost 1 million views on YouTube. And their hilarious spot for Red House furniture store in Highpoint, NC, which spoofs race relations, has generated almost 1.5 million views. There will certainly be more of these promotional songs in the hopper. That's because given what these advertisers are probably paying for these spots, their ROIs must be off the charts, especially compared to traditional advertising tactics. And with Rhett and Link's following, all new promotional songs now have a built in viral tailwind.

Rhett and Link remind me of Lee and Sachi LeFever of Common Craft, who I recently wrote about. They are all part of an emerging group of talent who would be considered "non-professionals" by the traditional standards of entertainment, advertising and communications. But with their own authentic and engaging approaches and direct access to audiences, they have been able to break through and attract large followings.

A key linchpin to all of their success is YouTube, whose massive audience and viral sharing is unmatched. Even as it strives for partnerships with premium quality video providers, YouTube's value to the Common Crafts and Rhett and Links of the world is undeniable. If leveraged properly, as it has been by these creators (and by others like Demand Media), it can also lead to genuine businesses opportunities.

When I repeatedly say that YouTube has massive franchise value - even though it is currently unprofitable - it's these kinds of examples, which put YouTube in the center of an emerging grassroots video ecosystem, that I'm thinking of. There's no other site that comes close to YouTube's reach, brand awareness or viral sharing potential.

If you have other examples along these lines, please send them along!

What do you think? Post a comment now.

Way back then (!) in 2003 most people in the media business still had a difficult time imagining why broadband video was so strategic and game-changing. Maven's team did a lot of the early spadework in evangelizing broadband's potential and building market momentum. Its reward was being acquired for $160M by Yahoo in February, 2008 in what I believe is still the largest pure play broadband deal.

However, the Yahoo acquisition was never a perfect strategic fit, even before factoring in the well-documented chaotic mess that Yahoo has become in recent years. The problem was that Yahoo is a media company, deriving the majority of its revenue from advertising. On the other hand, Maven was a technology/products company (though some in the industry always questioned the true proprietary value of Maven's technology). The most strategic deal for Maven would have been with a larger technology/products company, where it would have become part of broader suite of video products and services. Yahoo was never really well-suited to support Maven's third party video customers (and in reality it hasn't for a while now), and with all its other troubles, this move was widely expected.

For Maven's founders and investors, the company's acquisition marked a successful exit that others in the industry envy, particularly in this crummy M&A market. Still, the Yahoo-Maven deal is yet another example that when selling a company, price isn't the sole criteria for longer-term success.