Monday, January 13, 2014, 10:49 AM ET|Posted by Will Richmond
Free, short-form mobile video news is becoming a hot area of focus for established media companies. The latest evidence is this morning's announcement by NBCUniversal News Group of a minority investment in NowThis News as part of a broader content development collaboration involving all of NBC's news brands.
The investment follows the December acquisition of leading short-form mobile video news creator Newsy by E.W. Scripps for $35 million. That deal followed the launch by the New York Times, in late November, of the "New York Times Minute," a 3 times per day 1 minute video compilation of 3 top news stories of the moment which itself came on top of many other new video offerings from the Times. Meanwhile, in late December News Corp. acquired Storyful for $25 million to accelerate the use of short user-generated video in its and others' reporting.
And all of these follow numerous clip-oriented video news initiatives by a wide range of established and earlier-stage news organizations across both general and vertical subject areas (e.g. sports, entertainment, travel, etc.).
At least 3 powerful trends are behind all of this activity: (1) the rapid adoption of mobile devices and mobile video, particularly by younger audiences, (2) the rise of social media for content sharing and as a driver of shorter attention spans, and (3) the massive demand for high-quality video ad inventory by brand advertisers.
When it comes to mobile video usage, no surprise, younger users are leading the way. In its Q3 '13 Cross-Platform report, Nielsen found that teens were spending an average of 36 minutes/week with mobile video (compared with 21 minutes/week with online video), while 18-24 year-olds were spending 33 minutes/week with mobile video (compared with 1 hour, 21 minutes with online video). These were the highest usage levels for all age groups measured. Of course, social media is an integral part of the mobile experience, so mobile video (if compelling) also gets the benefit of additional exposure through widespread sharing.
Importantly, none of these mobile video news offerings would be happening if not for the insatiable appetite by advertisers for premium video ad inventory, especially that which targets hard-to-reach younger audiences. The imprimatur of established media brands like NBC, NY Times, Scripps and News Corp. on these mobile video initiatives is extremely important to their legitimacy and CPMs.
One other interesting thing to think about going forward with all of this mobile video news is last week's announcement by AT&T of "Sponsored Data," whereby the advertiser or content provider pays the data charges related to mobile video consumption, rather than the user. It's extremely easy to imagine a model in which targeted news channels are created by mobile video news providers and are sponsored by a brand that pays for their delivery under a "Sponsored Data" format.
This is the kind of mobile video innovation and out-of-home viewing that could result from flipping the model and having the advertiser or content provider pay for mobile data, instead of the user.