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Thursday, March 5, 2015

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Analysis for 'Indie Video'

  • Netflix's Original Content and International Expansion Plans Create New Risks

    Netflix made waves in its recent Q4 earnings report by announcing a massive acceleration of its international rollout, with its goal to now be in 200 countries by the end of 2016, up from 50 today (note there's some murkiness around counting to 200 countries as well). One of the keys to Netflix's successful international expansion is offering a robust content library, which in turn means owning the worldwide distribution rights to marquee programming.

    But a new note from analysts MoffettNathanson observes that studios are increasingly resisting Netflix's proposed global license fee structure, which only allows for a 20-30% markup on the actual cost of producing the shows. Instead, studios are biased to retain international distribution rights because of the potential for far more lucrative distribution deals.

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  • Just a Month Into 2015, Signs of Video's Momentum Abound, With Big Growth to Come

    (Note, I'll share details of online viewing of Super Bowl ads and the game later today…I'm still pulling all of the relevant data together.)

    We're just a month into 2015, and there are already abundant signs of online and mobile video's momentum, with lots more growth to come as the year unfolds. Here's what's hit my radar so far:

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  • YouTube Advertising Momentum Builds, As OpenSlate Unveils New Demographic Campaign Tools

    Not so long ago, content on YouTube was mostly user-generated, leaving advertisers uninterested. But now things have changed dramatically. Content has been professionalized by a vast range of independent creators, who are attracting huge audiences, especially among younger viewers. This was the key context for the 2014 surge in M&A activity among multichannel networks (MCNs) like Maker Studios, Fullscreen, AwesomenessTV, etc.).  

    In parallel, there have been significant innovations in how to monetize YouTube content. The latest is Outrigger Media's new OpenSlate demographic data, allowing advertisers improved targeting across 250K+ YouTube channels and Nielsen-backed audience guarantees in a program called "OpenSlate Select." The demo data complements OpenSlate's traditional "SlateScore" scoring of YouTube channels based on engagement and influence.

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  • VideoNuze Podcast #256 - Our 2015 Video Industry Predictions

    I'm pleased to present the 256th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

    This week Colin and I share our predictions for the video industry in 2015. In addition, we look back at our predictions for 2014 and share how we did (yes, accountability!).

    Listen in to learn more!



    Click here to listen to the podcast (25 minutes, 38 seconds)

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  • Amazon Gets First-Ever Woody Allen TV Series

    In yet another sign of how SVOD is upending the traditional TV industry, Amazon has announced this morning that renowned film director Woody Allen has signed on to create his first-ever TV series. Amazon ordered a full season of the half-hour series, named "Untitled Woody Allen Project." It will available in Prime Instant Video in the U.S., U.K. and Germany at launch. No additional information on release date, casting or subject matter was released.

    In typical Woody Allen fashion, he is quoted in the press release saying "I don't know how I got into this. I have no ideas and I'm not sure where to begin. My guess is that (VP of Amazon Studios) Roy Price will regret this."

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  • Amazon's and Netflix's Golden Globes Underscore OTT's Role as Bona Fide Alternative to TV

    At last night's Golden Globe awards, Amazon's series "Transparent" won Best Comedy, with its star Jeffrey Tambor winning best actor - TV Comedy, while Netflix's "House of Cards" star Kevin Spacey won for best actor - TV drama. Granted, it's just one awards show, and just two programs, but the Amazon and Netflix wins further legitimize OTT as a bona fide alternative source of high-quality programming to broadcast and cable TV.

    The operative word here is "alternative." Note that for years, Netflix in particular has characterized itself as "supplemental" to broadcast and cable TV. And to be sure, with around 37 million Netflix subscribers in the U.S. and cord-cutting still relatively muted, the reality is that today Netflix still is mostly a "supplemental" service.

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  • Vessel is a Huge Willingness-To-Pay Test Case With Broad Ramifications

    Vessel has pulled back the curtain on its long-rumored business model this morning, which essentially boils down to being a huge willingness-to-pay test case. The fundamental question: will online video viewers pay $2.99/month for Vessel's service, which includes a "modest amount of advertising," to gain early access to select online videos that will otherwise be available for free within 3 days or more?

    If the answer is yes, there is no doubt we'll see an explosion of paid early access models from all kinds of video content providers. If the answer is no, then Vessel would have to revert to an ad-supported only business model, which would leave it with a far less interesting value proposition to content creators.

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  • YouTube Talent War Rages With Millennials' Viewing Up For Grabs

    The WSJ is reporting today that YouTube is now offering some of its most popular video creators bonuses in exchange for signing exclusive multiyear deals. The new offers are on top of previously reported deals to underwrite programming for the same creators. All of this is happening primarily in response to pitches ex-Hulu CEO Jason Kilar is making to the same YouTube creators, to provide his new company Vessel with an exclusive 3-day window for these creators' new videos.

    The YouTube talent war is raging because the viewing behaviors of millennials - the primary audience for this type of programming - is up for grabs. The most compelling evidence of this came in last week's Nielsen Q3 '14 Total Audience report. Based on my calculations, live TV viewing by 18-24 year-olds (the core millennial segment) dropped by nearly 20% in Q3 '14 vs. Q3 '13. The reduction represented over 4 hours per week of viewing time, thereby dropping live TV viewing to approximately 17 hours per week, easily the lowest of any age group Nielsen measures.

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  • Minecraft's YouTube Explosion Highlights Video's New Rules

    Late last week, Thomas Owadenko, CEO of Octoly, a marketing software company that released a report on YouTube and video games last June, noted that all-time YouTube views of fan-created Minecraft videos are now up to 47 billion, an increase of 16 billion just since the report was released. Underscoring how robust Minecraft's fan community is, just 228 million of these views occurred on Minecraft creator Mojang's own YouTube channel.

    Minecraft is a true "unicorn," a one-of-a-kind video game empire built with virtually no paid marketing, which partly explains why Microsoft was willing to pony up $2.5 billion for the company in September. But while Minecraft itself may be a unicorn, its success on YouTube says a lot more generally about the video industry's new rules - including serious challenges for industry incumbents.

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  • Perspective What's this? Times, They Are a-Changin' - Online Video Revenues Hinge On Off-YouTube Strategies

    The list of YouTubers who owe their success to YouTube alone is shrinking. After years of dominating the online video market, YouTube is no longer the only place where online video is happening. From big video outfits like Maker Studios, to independent YouTube stars like PewDiePie, video producers who got their start on YouTube are now looking beyond YouTube for their next act.

    Diversify revenue streams. It sounds simple enough, but as smart a move as this is, there are plenty of potential pitfalls in its execution. Because as much as relying on YouTube as your sole revenue stream is a mistake, not fully taking advantage of the alternative distribution channels at your disposal - or using them haphazardly - is an even bigger mistake.

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  • Perspective What's this? Automation Brings Engagement and Scalability to Branded Video

    Consumers are spending more of their time with YouTube videos, which represents an opportunity for brands to connect with consumers with a more personal and engaging message.

    Nielsen has already reported that when they include measuring YouTube's audience later this fall it will debut as the largest destination for video viewing among all cable networks and video websites - perhaps by a wide margin.  YouTube has 1 billion unique monthly visitors globally and it continues to grow fast.  In 2012 YouTube grew 55%. Television viewing, however, according to Nielsen, was down by almost 7% in the first quarter of 2014 among 18-24-year-old.


    There is a new culture developing within the social ecosystem that has been called "Gen C."  Gen C is the YouTube generation.  Gen C describes people who care deeply about creation, curation, connection and community. It's not an age group; it's an attitude and mindset.  While Gen C may not be every brand's target audience, the very notion that this is now labeled a generation underscores how large the movement has become.

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  • Teens Prefer YouTube Stars to Hollywood Celebrities: Research

    Likely not to surprise anyone with a teen in the house, new research commissioned by Variety found that the 5 personalities with the most influence among American 13-18 year-olds are all YouTube stars. As well, half of the top 20 are also YouTube stars, with the other half well-known mainstream celebrities.

    1,500 teens were asked about 20 personalities (10 had the most subscribers on YouTube and 10 had the highest Q score among teens). Questions focused on approachability, authenticity and other measures deemed important to their influence. Answers were then scored on a 100-point scale to determine the final rankings.

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  • VideoNuze Podcast #237 - Is YouTube Indomitable or Is It Vulnerable to New Competitors?

    I'm pleased to present the 237th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

    This week we dive deep into the question of whether YouTube is indomitable or vulnerable to new competitors. Colin observes that the 45% revenue split YouTube keeps has opened the door for everyone from Vessel (former Hulu CEO Jason Kilar's startup) to Yahoo to others to approach YouTube stars about better deal terms. Major MCNs like Maker Studios (acquired by Disney) and Fullscreen (rumored to be acquired by Otter Media) are expanding beyond YouTube with their own properties.

    However, I don't see much changing with the revenue split, except maybe the largest players getting improved terms. For both established and startup content providers, YouTube offers unparalleled audience reach, publishing tools and monetization. I offer a few examples as proof of YouTube's power: PewDiePie (which now has an astounding 29 million subscribers), Vice News (a pure YouTube news channel now able to take over the NYTimes.com's masthead ad) and Sorted Food (a British startup that has gained 870K+ subscribers on YouTube and now tops its Food category).

    For all of these content providers and tons of others, YouTube provides an open, flexible distribution platform unlike anything before it in the media business. Ad splits will continue to be a bone of contention, but YouTube is poised to only get stronger going forward.

    (Related, Colin has a complimentary new white paper on how to win and retain OTT customers available here.)

    Listen in to learn more!

    Click here to listen to the podcast (20 minutes, 19 seconds)


    Click here for previous podcasts

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    The VideoNuze podcast is also available in iTunes...subscribe today!

     
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  • Upstart Vice News Has Taken Over the Masthead Ad Position on NYTimes.com

    Here's a great example of how convoluted the media ecosystem has become: if you visit NYTimes.com today, you'll notice that upstart Vice News has taken over the masthead ad position. I check NYTimes.com every day and this is the first time I've noticed the Vice News ad though it's possible it has run previously. Vice News positions itself as "an international news organization created by and for a connected generation" and still carries a "beta" label.

    The ad itself runs a series of protest scenes from what looks like Ukraine, with periodic statements interspersed like "You go to both sides of the front line," "Look beyond the headlines," "Follow the story wherever it leads" and "Don't just watch the news." Clicking "Watch Now" starts a loop with similar scenes and statements. There is a click through to the Vice News site on YouTube and ability to subscribe (the counter shows 588,220 subscribers so far).

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  • VideoNuze Podcast #236 - Demise of Qplay and Xbox Studios

    I'm pleased to present the 236th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

    This week we discuss the demise of two online video businesses that were short-lived, Qplay and Xbox Entertainment Studios. Qplay was founded by 2 TiVo founders and backed by blue-chip venture capitalists, but lasted in the market just 6 months. Colin provides a cogent analysis of the 4 key challenges the company faced, which it couldn't surmount.

    Xbox Studios was shut down for completely different reasons, and, as I wrote last week, it is just the latest lesson in how difficult it is to create high-quality, long-form content.

    Listen in to learn more!

    Click here to listen to the podcast (20 minutes, 53 seconds)

    Click here for previous podcasts

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    The VideoNuze podcast is also available in iTunes...subscribe today!

     
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  • Microsoft Chops Xbox Studios, A Reminder of How Tough the Premium-Quality Content Business Is

    Microsoft will close down its Xbox Entertainment Studios (XES) as part of a broader, 18,000 employee headcount reduction it has announced. I, for one, am not surprised by this outcome. A year-and-a-half ago, at the D: Dive Into Media conference, I watched an interview with Nancy Tellem, head of XES (and former head of CBS Entertainment) and Yusuf Mehdi, Xbox's chief marketing and strategy officer, that left me wondering whether the company really understood what role it wanted original programming to play or how it would be differentiated.

    Basic questions on whether originals would be included in the current subscription service or cost extra, whether they would be ad-free or ad-supported, exclusive to Xbox or available elsewhere and more were essentially left unanswered, creating a very unfocused vibe. But, since it was still relatively early days for XES, I was inclined to cut them some slack.

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  • "TV is Video, But is Video TV?" [AD SUMMIT VIDEO]

    One of our early sessions at the recent Video Ad Summit was "TV is Video, But is Video TV?" which included Doug Knopper (Co-CEO, FreeWheel), Peter Naylor (SVP, Ad Sales, Hulu), Fred Santarpia (EVP, Chief Digital Officer, Conde Nast Entertainment) and Dan Suratt (EVP, Digital Media and Business Development, A+E Networks), with me moderating.

    The question is highly relevant as it influences how ad spending will evolve and how pay-TV's value proposition will be perceived given the proliferation of online originals. Our panelists offer a range of perspectives, with some consensus that if it's long-form, high-quality, rights-managed and brand-safe online video, there's no practical difference vs. TV. One data point that Peter shares - that 62% of Hulu's content is now viewed on connected TV devices - underscores how mainstream online video viewing has become.

    watch the session video

     
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  • VideoNuze Podcast #234 - Yahoo, CBS, Seinfeld/Crackle and More

    I'm pleased to present the 234th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

    This week we touch on a few different topics that caught our attention, including Yahoo's deal to pick up another season of "Community," after NBC dropped it (plus we discuss Yahoo's other video moves). Then we turn to CBS's research head's reveal that the network generates up to 20% more revenue per viewer online than on TV.

    We also review whether HBO premiering the first episode of its new series "The Leftovers" on Yahoo (plus similar efforts by other premium networks) will succeed. Finally, we're both impressed with Jerry Seinfeld's new Acura ads and how they blur the lines between content and advertising. Seinfeld is a huge online video enthusiast as I noted earlier this year.

    Listen in to learn more!

    Click here to listen to the podcast (18 minutes, 41 seconds)



    Click here for previous podcasts

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    The VideoNuze podcast is also available in iTunes...subscribe today!

     
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  • VideoNuze Podcast #230: Crackle, HuffPost Live and Online Video Ad Growth Ahead

    I'm pleased to present the 230th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

    This week found Colin at the BroadbandTV Con event in Santa Clara where he was impressed by the 2 keynotes, by Eric Berger, EVP, Digital Networks, Sony Pictures Television (Crackle) and Roy Sekoff, President and Co-Creator of HuffPost Live. Eric and Roy provided insights about their strategies and the audiences they're pursuing. Both services are highly successful in their own ways. Colin shares his observations, and compares and contrasts the two.

    One commonality is that both services are free to viewers and ad-supported, which brings us to our next topic, PwC's growth forecast for online video advertising, which I covered this week. We dig into the details and other PwC numbers. Even though PwC projects video ad spending will more than double, to $6.8 billion in 2018, Colin actually believes the forecast is too conservative. He explains why and what would really impress him.

    Listen in to learn more!

    Click here to listen to the podcast (18 minutes, 29 seconds)


    Click here for previous podcasts

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    The VideoNuze podcast is also available in iTunes...subscribe today!

     
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  • VideoNuze Podcast #226 - Maker Studios and the Short-Form Opportunity

    I'm pleased to present the 226th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia. This week we focus on Maker Studios and the broader trend around short-form online video and its appeal to millennials.

    The Maker NewFront earlier this week in NYC, which I attended, underscored for me how well the company is differentiating itself from traditional TV. Rather than trying to emulate HBO (as Netflix is doing) or chase Netflix itself (as Microsoft, Yahoo and others pursuing TV projects seem to be doing), Maker is carving its own path, focused on delivering breakthrough short-form content that resonates with millennials.

    A key success factor is the creative freedom Maker talent has, allowing authenticity which appeals to millennials. Unvarnished and sometimes wacky, Maker's programming exemplifies how unconstrained the web is for the next generation of talent. Of course a key question is if or how things will change under Disney (whose CEO Bob Iger offered his first public comments on the deal this week).

    (Note there's an approximately 5-second dropout in my audio about mid-way through. We're still wrestling with Skype's quality.)



    Click here to listen to the podcast (19 minutes, 13 seconds)

    Click here for previous podcasts

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    The VideoNuze podcast is also available in iTunes...subscribe today!

     
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