• NBC.com Bolsters Mobile Video Ad Model with Kiptronic's Help

    While broadband video consumption continues to surge, mobile video usage is also now showing strong signs of growth, mainly due to the iPhone's popularity. In fact Nielsen just reported last week that iPhone users are 6 times as likely to watch mobile video as are other mobile subscribers. And for Q4 '08, it reported that 11.2M people watched mobile video, with 51% stating they're new to the medium, viewing for less than 6 months. This is still small compared with the 150M or so people (U.S.) watching broadband video each month, but with an onslaught of new or upgraded video-capable smartphones hitting the market, mobile video is poised to grow rapidly.

    All of this is very good news for content providers, for whom this "3rd screen" (after TV and PC) opens up all kinds of new opportunities. Many have been participating to date in carrier-provided (e.g. VCast, FLO TV) and other (e.g. MobiTV) subscription services that have achieved solid growth. But with still advertising the primary business model for many content providers, they've been eager make ad-supported video available to growing base of mobile video users as well.

    NBC for example has been pursuing ad-supported mobile video, and last summer, made a big mobile push with its Summer Olympics coverage. Still, as Stephen Andrade, NBC.com's SVP and GM and Robert Angelo director web/mobile, told me recently, inserting ads in its mobile-distributed video has been painfully laborious and grossly underoptimized. To address these issues, NBC recently struck a deal with Kiptronic, an ad serving firm that specialized in non web-based content.

    Stephen and Robert explained that their overarching goal with NBC.com video is to "publish once, distribute everywhere" - a goal I often hear from other video content providers as well. However mobile-distributed video was siloed and not fully incorporated into its online/broadband work flows. This was especially problematic on the ad side, where mobile inventory wasn't exposed in DART, on which NBC has standardized its ads. As a result a lot of mobile inventory was unsold, and even when it was sold, advertisers were required to jump through a bunch of new hoops to get their ads to NBC, which itself then "hand-stitched" the ads to its mobile-distributed video.

    After looking at multiple solutions to address these issues, NBC chose Kiptronic's kipMobile. Stephen and Robert said the key was kipMobile's flexibility in plugging into NBC's existing content management system and work flow. Now when an NBC producer uploads video, upon preset instructions kipMobile transcodes the HD source file into relevant mobile formats and transfers them to Akamai (NBC's CDN). When a mobile user calls for a video, kipMobile determines which format is best-suited for that particular device, dynamically grabs appropriate ads from DART and combines the two into a file which Akamai then serves to the user.

    Beyond dramatically simplifying NBC's work flow, Stephen and Robert are also excited about the new revenue potential, given NBC's booming mobile usage (Q1 '09 video streams jumped to 9.6M from 2.5M in Q1 '08 with mobile page views increasing from 32M to 96M in the same period). Looking deeper into the usage patterns, NBC sees more than half the mobile video usage occurring at home, as users increasingly look at their mobile device as an alternative screen when the TV isn't available. While 75% of NBC mobile usage is iPhone-based today, they're seeing strong adoption by non iPhone devices. Though still early, geo-identification is creating yet another ad opportunity unique to mobile.

    NBC and many other content providers are going to be riding the wave of surging mobile video consumption. kipMobile and other monetization solutions will become increasingly important as these content providers seek to unify their online/broadband and mobile work flows and to fully monetize their views.

    What do you think? Post a comment now.
    (Updated May 21st: Things move fast - Limelight just announced it has acquired Kiptronic.)