If your family or extended family is like most, then someone in your home is what Josh Grotstein, CEO of Motionbox, refers to as a "Chief Memory Officer" or family "CMO." That's the person who's responsible for toting the camera/camcorder, uploading, developing and distributing the family's photos and videos to family and friends, and storing the treasures for future use.
And just as the proliferation of digital cameras launched Ofoto, Shutterfly and SnapFish (plus sites like Flickr, Picassa, etc.), who targeted the family CMO to help manage and create further value from their growing digital photo collections, the advent of inexpensive video cameras is creating a new set of companies looking to help CMOs manage their family's video assets.
While still early days, the impending explosion of video-capable smartphones, coupled with cheaper HD camcorders and popular low-end video cameras (e.g. Flip, etc.), all suggests this is yet another growing corner of the market fueled by broadband video's adoption. To learn more I spoke last week with Josh and with Andres Espineira, President and co-founder of Pixorial, which recently emerged from private beta.
These companies and others in the space like iMemories, provide a number of key features and value propositions - uploading new or archived digital video (or sending physical tapes), easy transcoding from multiple formats into multiple formats, storage, online editing to create short movies which can be shared online and offline, and customized hard goods/gifts
The primary play here is to get the CMO engaged in the act of editing raw video footage, to stay organized and/or optimize their memories. Sharing becomes a pretty logical extension though, as does getting other stakeholders involved. For example, these stakeholders could include other moms/dads uploading video from their kids' soccer games to multiple wedding guests who shot their own video. Getting these people to mix and edit (and then share and order hard goods/gifts) is the behavior these companies hope to engender. Since most people don't fancy themselves as video editors, the online tools need to be extremely easy-to-use.
Another point of commonality is that these companies all use some type of "freemium" model, where a base level of service is offered for free, with the goal of converting a percentage of freebies to paid services tiers. The freemium model has become widely used online, and has been further popularized recently by Chris Anderson's new book "Free," which contends "freemium" is the way of the future.
Yet as Josh explained, freemium creates a delicate balance, where user behavior must be carefully monitored. The biggest cost driver is storage, so as more free users look to these services as providing back-up redundancy, a higher percentage of them need to be converted to paying in order to make the whole model work. Josh explained that Motionbox (which has raised $17M to date and is the granddaddy of the category with 2M+ registered users) has continuously tweaked its model to optimize the conversion process. It is moving to a model where free users get a finite number of free uploads, and then beyond that you have to pay. In a world where YouTube is the free standard for video sharing, creating and effectively communicating the value of being a premium sub is all-important.
Assuming this hurdle can be surmounted, the proliferation of convergence devices suggests even more tailwind for the category. Think about being able to easily share and access your movies online through devices like Roku, Xbox, Internet-connected TVs, etc. Even incumbent service providers (cable/satellite/telco) could find value in offering personal video services, white-labeled by these companies.
While video is a more complex media format than photos, as more CMOs shoot more video that they want to save and share, it's likely this category will continue to see plenty of growth.
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