Thursday, October 8, 2009, 9:48 AM ET|Posted by Will Richmond
While many in the industry are focused on the shift of long-form premium content to online viewing - and importantly its financial viability - Metacafe and others are continuing to prove the appeal of short-form premium content online. Although it's tempting for many to see the online video platform as a me-too medium to distribute existing programs, Metacafe's success shows that online video has its own unique usage characteristics which can be exploited. I caught up with Metacafe's CEO Erick Hachenburg recently to learn more.
Metacafe focuses on 5 "hubs": TV, Movies, Music, Sports and Video Games, which was just launched in mid-September with EA as the lead sponsor. There are also "channels" which group content by partner. Metacafe works closely with content partners like studios, TV networks, sports leagues, independent broadband-only producers and video game publishers. It also accepts user uploads, but these are filtered through an internal process before being posted on the site. Erick explained that Metacafe strives for an "entertainment sensibility" across the hubs as a differentiator.
Browsing through the site reveals a combination of clips, trailers and UGC videos. One thing you notice quickly about Metacafe is that it is very orderly. It's not just that content is well presented, but also that videos seem to be where they should be, have accurate descriptions and play with uniform quality. While YouTube can often feel overwhelming, Metacafe feels like a better managed environment. This reflects Metacafe's emphasis on curating everything that goes on its site, so that specific content gets showcased and any duplicates are removed.
The approach appears to be working. In July Metacafe had its best month, attracting 12 million unique visitors in the U.S. according to comScore, up 67% vs. July '08. Because Metacafe doesn't syndicate out its content, preferring instead to build a community-centric destination, it wants to be judged by how well it ranks as a destination video site. By this count according to comScore, it's behind only YouTube, which is a clear #1 with 98 million visitors. Globally Metacafe was #3 in July at just over 50 million visitors, behind YouTube (437 million) and Dailymotion (58 million) according to comScore. Of course because syndication is such a huge trend, the rankings are completely different when this is factored in, with Metacafe falling out of comScore's top 10.
Validating the short-form genre's online appeal, research Frank N. Magid Associates conducted over the summer showed that 37% of consumers it surveyed said they found short professional videos equally or more entertaining than full-length TV shows on their television set. In addition, it found that 8 of the top 10 most watched types of online video are short form, with UGC, news, music videos, movie previews and comedy topping the list. While the Magid research was sponsored by Metacafe, it synchs with what I continue to hear anecdotally. With most online viewership still on the computer, and in-browser, short clips are most natural to watch for many.
Erick also reported that Metacafe is generating 20-25% quarter-over-quarter revenue growth and is poised to break even sometime in 2010. A key ad unit the site uses is a large billboard which dominates the top of the page. Pre-rolls seem to be inserted before every clip viewed; I didn't notice any frequency capping.
Add it all up and Metacafe's focus on curated short-form premium content in entertainment-related categories seems to be paying off, proving that there's success to be had operating in the long shadow of both YouTube and TV-oriented sites like Hulu.
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