VideoNuze Posts

February may be the shortest month of the year, but just less than 3 weeks in, the pace of online video financings has been the hottest since I started tracking this data over a year ago. By my count there have been at least 8 financings announced this month and I suspect I've likely missed a few (please let me know if so). This week brought financings from Clicker ($11M), YuMe ($25M) and TidalTV ($16M), adding to those announced previously: Encoding.com ($1.25M), IVT ($5.5M), Voddler ($3.5M), BrightRoll ($10M) and the big whopper of the month Ustream ($75M) though this one in two tranches.

Overshadowed this week with the launch of HBO Go is that Synacor has been powering access to the subscriber-only portion of NBC's Olympics video for 14 of its cable operator customers, reaching 9 million subscribers. As Synacor's CEO Ron Frankel told me earlier this week, this is the most extensive TV Everywhere authenticated access instance to date, though it is really just a continuation of the kinds of services Synacor has been offering for years.

Synacor has flown somewhat below the radar as it has steadily built out its content offerings, with deals with 60 different providers now in place (e.g. MLB, NHL, MTV, etc.). Synacor offers a portal to its customers which provides its cable operator customers with single sign-on access via pre-integrated billing and user ID management. This is the same way that TV Everywhere is intended to work as it rolls out. Given its experience, Synacor looks like it will be a key player in making TV Everywhere happen in 2010.

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One other noteworthy tidbit to come out of Mobile World Congress earlier this week was that Sling Media announced it got final approval from Apple to offer its SlingPlayer Mobile App in the App Store. SlingPlayer had been held up due to network concerns, but 2 weeks ago AT&T announced that it would let the SlingPlayer app stream live over its 3G network.

Though there aren't that many Sling users, and only a subset of them will pay the hefty $29.99 price for the SlingPlayer app, its clearance is a milestone because it truly enables high-quality place-shifting of long-form programming to a mobile device. It also steals some thunder from the FLO TV value proposition and offers a meaningful precedent to others who might like to stream long-form programs to iPhones and other mobile devices down the road (Netflix? Hulu? Amazon?). It's somewhat of a mystery to me how AT&T's overtaxed 3G network can now support long-form video streaming when complaints are still rampant about call quality. I don't have an iPhone or a Sling box, but if a VideoNuze reader does, and downloads the SlingPlayer app, I would be very interested in hearing about your viewing experience.

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Of course, the question still looms, will people pay $500-$800 for all that iPad coolness? Apple itself appears sensitive to the issue, clearly softening the market for possible price reductions soon after the iPad's release if volumes don't materialize. Going out on a limb a little, I for one believe we'll see an approximately $200 price reduction by holiday season '10, if not sooner. The iPad is too important to Apple and Steve Jobs to be allowed to flounder and the coming release of numerous lower-priced tablets from competitors will only add to the pressure on Apple. If iPad prices fall, it could indeed become a game-changer for Wired and other print publishers.

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Daisy Whitney and I are pleased to present the 50th (woohoo!) edition of the VideoNuze Report podcast, for February 19, 2010.

This week Daisy first walks us through a piece she's writing for AdAge focused on viral video. In reviewing data on which videos have broken out online, Daisy concludes that invariably they are also supported by related advertising. In other words, viral video isn't accidental any more (if it ever was) - now it must be stoked by paid support. An example Daisy provides is for Evian's "Live Young" babies ad which has been seen online 76 million times. Evian initially promoted the ad with YouTube takeover ads. Daisy also discusses the online performance of Super Bowl ads based on Visible Measures' new Trends application, which shows a big disparity between ads that were viewed heavily online vs. rated highly when seen on TV.

Then we discuss my post, "In Trying to Preserve DVD Sales, Studios are in a Tight Spot," in which I described the lengths to which Hollywood studios are going to squeeze out the last remaining profits from DVD sales. As I explain, while the recession has had a dampening effect on DVD sales, the larger problem is that rather than buying them, increasingly consumers are expecting films to be available for rental or subscription or even for free, with ad support. A number of moves from Disney, Sony and Warner Bros. in the last week underscore the consequences studios face as they try to shore up DVD sales.

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It's not news that DVD sales - the lifeblood of Hollywood studios' P&Ls - are in a freefall. In response, the studios are doing all sorts of things to eke out just a little more profitability from the sales of the shiny discs. But as several news items over the last week underscore, the studios have little wiggle room before their efforts to shore up DVD sales have real or perceived consequences for key business partners.

Exhibit A is the brouhaha over Disney's new plan to release Johnny Depp's "Alice in Wonderland" on DVD 12 1/2 weeks after its theatrical opening, instead of the usual 16 1/2 weeks, regardless of whether it's still playing in theaters. In the past, when a film's "release windows" were distinct and well-separated, everyone in the distribution chain knew they'd have their separate bite of the apple. With collapsing windows, those bites are converging, leaving some feeling they're not going to get their fair share. In the U.S. there has mostly been just grousing about Disney's plan among theater owners, but in Europe there are threats by large theater chains of an all-out boycott of the film.

It's hard not to feel some sympathy for the theater owners as the "Alice" plan isn't a random event. Sony recently ran a misguided promotional campaign giving away "Cloudy with a Chance of Meatballs" DVDs to certain Bravia buyers while the film was still playing in theaters. And it attempted to accelerate the release of the Michael Jackson "This Is It" DVD until theater owners drew the line. No doubt there are plenty of other examples being floated privately in Hollywood.

Meanwhile, news also broke this week that Redbox, the $1 a day rental kiosk chain had acceded to Warner Bros.' demand that it not rent any films until 28 days after their DVD release, in order to help preserve initial sales. As part of the deal Warner dropped its lawsuit against Redbox. In return, Redbox got lower pricing on its Warner DVD purchases. The deal mirrors the 28-day deal Netflix did with Warner last month, which I thought was a win for everyone. But the key difference in that deal vs. Redbox's is that Netflix has a huge rental catalog available for its subscribers to choose from, meaning new releases are far less important (Netflix says only 23% of rental requests are for new releases). On the other hand, Redbox's whole value proposition rests on low prices and selection of new releases. What is Redbox's fate if it does similar deals with other studios?

Putting the squeeze on Redbox and its kiosks seems like a dubious strategy by studios. In an age where piracy looms large, studios should be focused on enhancing, not diminishing the accessibility of their product (as a Coke executive once famously explained the company's marketing goal: "always within an arm's length of desire"). While Hollywood doesn't like Redbox's lower margins, focusing on that issue excessively when the product is clearly in decline is missing the forest for the trees.

Studios' desire to preserve DVD sales is going to further intensify, but defending them is only going to get harder. Certainly part of the reason is that the ongoing recession is forcing many consumers to cut back on their discretionary purchases. But the larger issue is that there's huge momentum behind the shift to online subscription/rental and even free models. The data shows that online viewing hit an inflection point in 2009, with free premium sites like Hulu experiencing extraordinary growth.

And the data showing online's appeal pours in almost daily; yesterday it was The Diffusion Group reporting results of a study of Netflix users showing that two-thirds of them that have a broadband connection are now using the "Watch Instantly" streaming feature. This week's launch of HBO Go, the premium channel's site for its subscribers, and its distribution deal with Verizon, are evidence that even the mighty HBO can't resist online's allure. Last but not least, in 2010 TV Everywhere rollouts will gain steam.

There's no denying the truth that DVD sales are under assault from all sides. Studios, desperate to hold on to DVDs' precious profits, are increasingly contorting themselves to keep the DVD cash cow alive a little longer. No surprise though, their efforts are not without consequences. At what point do the studios capitulate and throw DVD sales under the bus? We'll have to wait and see.

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Panache has unveiled Ad Flow, a new work flow tool for online video ads intended to streamline the process for publishers adding and approving new video campaigns. I got a short demo of Ad Flow from the Panache team and it looked intuitive and thorough.

According to Panache's EVP Cheryl Kellond, who was formerly a VP of Advertising at Yahoo, ordinarily this process is very manual and is based on home-brewed work flow tools which can result in a lot of emails back and forth among the publisher's team members. The result is that it can take up to 6 weeks and end up costing 25-40% of the value of the campaign with all the personnel time involved. With these delays, Cheryl said Yahoo sometimes had to turn business away because they couldn't process the ads quickly enough.

Though I've never personally been involved in this type of process at a major publisher, I have a glimpse into how complicated it must be from my own experience with VideoNuze's ads. First I receive sponsors' creative which was to have been developed according to published specs. Then I load the ads into my ad system and test them along a number of different dimensions. For one reason or another, frequently there are 1-2 rounds of revisions before they finally go live.

Even for a relatively simple site like VideoNuze which accepts Flash ads, though not video ads, there are a number of things that can cause deviations, resulting in delays for the campaign's start date. Mind you I'm not complaining, I've just come to understand that all of this is part of being in an ad-supported business.

With Ad Flow, the publisher's ad sales, ad product strategy, operations and creative teams can all monitor the step-by-step progress of new campaigns from initially being loaded through testing and to final approval. Rather than using email to monitor progress, everyone gets access to the tool for their specific tasks. Importantly, testing can be in the publisher's video player offline, which has been hard in the past. Ad Flow is another element in online video's foundation which will reduce the friction involved in getting ads live so that more TV ad budgets can be shifted to online video.

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Visible Measures, the third-party measurement firm for online video, is taking the wraps off its new "Trends" web-based application this morning. I've been playing around with it for the last couple of days with a courtesy login and not only does it pack a ton of value, it's also really addictive.

Trends offers access to videos in 3 different data sets, or "collections": Social Video (currently 165 online ad campaigns that have gone viral), Film Trailers (currently 115, and growing by 3-4 per week), and all the recent 2010 Super Bowl ads. The results table for a query displays the campaign's thumbnail image and its name, along with its views or "reach" based on Visible Measures' "True Reach" data (either incremental or cumulative) plus the number of comments, ratings and points of distribution. The table also displays each ad's industry categorization, ad agency, brand name and type of creative type (humor, contest, product demo, etc.). Viewing any particular ad is also just one click away.

Users can take advantage of Trends in any number of ways, depending on their particular interest. As one example, I started by choosing the Social Video collection and "Cumulative Reach" for the current time period. I was interested to see just campaigns for beverages, so I chose that category, but allowed all agencies, brands and creative types to be displayed. In an instant I was presented with a table of 20 results on 2 pages, starting with Evian's hilarious "Live Young" campaign featuring the dancing babies that has garnered almost 74 million views to date. After looking it over, I also reviewed the other campaigns in the top 5, from Pepsi, AMP and Anheuser-Busch. Click on the image below if you'd like to see a 4 minute video demo.

In the social and online video-dominated world we now live in, Trends data is invaluable for brand advertisers and their agencies. It allows them to customize their views of the database, compare different campaigns and analyze what worked online and what didn't. Online distribution is now a key part of calculating the ROI on a campaign, so being able to benchmark the performance of past campaigns provides insight not normally available in traditional TV advertising.

For example, say an agency is formulating a plan for its client's new shampoo - Trends lets its creative executives understand whether prior campaigns featuring product demos, humor or celebrities worked best online. A few quick queries will yield data that can be exported to create charts and graphs for everyone on the team to review. Of course past experience can perfectly predict the future, but Trends provides hard data that lets the creative discussion quickly move beyond gut instinct.

The Visible Measures team told me last week that they've been gradually exposing more and more of their data, through top 10 lists with media partners like AdAge, Variety, Mashable and Motor Trend. With Trends, the data is even more accessible. Visible Measure is also making a public beta of Trends available, though just for the Social Video collection. It's free and it's fun - I recommend giving it a try.

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Note - Visible Measures is a VideoNuze sponsor.