Tuesday, May 27, 2008, 9:42 AM ET|Posted by Will Richmond
Last week I moderated 2 panel discussions, one for Streaming Media East in New York, and the other for MITX, the Massachusetts Innovation and Technology Exchange, in Boston. In the former, "Reinventing the Ad Model Through Discovery and Targeting" and the latter, "Driving Audiences to Your Online Video Content: Strategies for Success in a Crowded Market" panelists discussed many of the key themes I continue observing in the broadband video market.Early adopters are heaviest broadband usersDespite research that continues to show broadening adoption of broadband video usage (11.5 billion videos viewed in March, according to comScore), at SME, Nielsen's Jon Gibs confirmed that the vast majority of the market is still very casual users, with only 5-8% of overall users showing more habitual and long-form viewing. For many today, the viewing experience is still limited to watching a YouTube clip emailed to them or found in a friend's MySpace or Facebook page. Plus user attention spans remain short. At MITX, Visible Measures' Brian Shin showed how viewership drops off a cliff following the climactic moment of a hilarious user-generated clip. Broadband is driving significant behavioral change for a segment of the market, but transitioning to a heavily-used mainstream medium will take years.Video proliferatesNonetheless, the number and range of video producers continues to expand, as all kinds of organizations recognize that video is a totally new opportunity to connect with their audiences, whoever that may be. At the MITX event, panelists showed examples from politicians, cultural organizations, small businesses, schools, brands and users themselves. I've said for a while that we're entering a "golden age" of video, with a massive proliferation of the quantity and range of sources. The market is already well into this phase.Discovery is a huge problemWith this massive proliferation comes the huge problem of how users will actually find what they're looking for. At SME, Mike Henry from Veoh discussed promising results of Veoh's proprietary behavioral recommendation engine. At MITX, Tom Wilde from EveryZing showed how it can surface video for search engine discovery by using its speech-to-text engine; while Murali Aravamudan from Veveo explained how its algrorithms can quickly distinguish the video users are truly searching for. All of these approaches improve the users' experience. Yet what's equally clear is that, having never experienced the explosion of video choices we're now witnessing, it's impossible to know what will ultimately end up working. Discovery is an ongoing problem to be solved.Ad market still immatureLast but not least, for the many fledgling and established video providers relying on advertising, the good news is that there's a lot of buyer interest, but the bad news is that it's still a very immature market. At SME we discussed how many media buyers look at broadband video through their traditional TV lenses, leading to a focus on TV's "Gross Rating Points" or GRPs model. But this undervalues the real engagement opportunities that broadband enables. At MITX, Bob Lentz of PermissionTV discussed how broadband is changing the role of ad agencies, traditional stewards of the creative process, allowing them to now do much more. Advertising is the primary business model for content providers, yet the shift of dollars the medium is anything but straightforward.
These were four of the key themes from these two sessions. There was plenty more information exchanged, if you're interested, drop me a line and I'll be happy to discuss.