VideoNuze Posts

Continuing VideoNuze's pattern of highlighting relevant third-party research, today I'm pleased to make available for complimentary download a dozen research slides from Starz Entertainment. Many of you are likely familiar with Starz, which owns a leading collection of premium cable networks which have been in the forefront of pursuing broadband distribution opportunities.

Starz participated in an omnibus research study of 5,500 U.S. Internet users (4,000 18+ years-old and 1,500 12-17 years-old) in September-October '08. The survey was administered by market research firm Synovate and the goals were to measure 17 different media consumption activities on 9 different platforms.

Starz research head David Charmatz and members of his team walked me through key findings I think it will be beneficial for VideoNuze readers trying to make sense of the shifting video landscape. I have no financial stake in this research.

Consistent with other numbers I've seen recently, 62% of respondents now watch some online video each week. That compares with 87% for live TV, 46% for DVD and just 38% for Time-shifted TV (DVR/VOD). There's little gender difference among those watching online video; 66% of males watch, 58% of females watch.

"Televidualists" as Starz calls them are a key group representing 18% of respondents who watch long-form media at least once per week either online, on a mobile device or through a media extender like Apple TV or Xbox. This group watched more video on all platforms and down the road I see them as the early adopters who are going to be most open to exploring online/on-demand-only solutions. To keep things in perspective, note that just 1% said that they only watch long-form content on new platforms and not on TV (and some of these may have never watched TV at all).

Importantly 60% of Televidualists are 12-34 years-old, compared to 39% overall. That's of course no surprise to anyone, and it continues to underscore how important it is for all incumbents in the existing video distribution value chain to pay close attention to serving their younger customers flexibly and cost-effectively. All of this and more data is contained in the slides.

Click here for complimentary download

Digitalsmiths is announcing this morning that Cisco has invested an undisclosed amount in the company. The deal adds onto Digitalsmiths' $12M Series B round from a couple months ago, led by .406 Ventures. Digitalsmiths has been building momentum in the video indexing and content management/publishing space and the Cisco investment is a nice validation for the company, particularly in this bruising economic climate. I talked to Digitalsmiths' (which is a VideoNuze sponsor) CEO/co-founder Ben Weinberger on Friday to learn more.

The deal was shepherded by the Cisco Media Solutions Group, which recently announced the general availability of its Eos (Entertainment Operating System) social media platform at CES. This follows a period of relative quiet for Eos. Almost 2 years ago I moderated an NAB Show Super Session panel which included Dan Scheinman, the SVP/GM of CMSG who was then just beginning to talk about Eos.

As Ben explained it, Digitalsmiths' indexing and video management will allow Eos to offer more advanced, targeted advertising capabilities to its customers. That certainly puts it in line with marketers' increasing desire for maximum context and ROI for their dollar. Improved navigation and a strong focus on monetization have been two critical Digitalsmiths' competitive differentiators.

At a broader level, Ben described how other Cisco groups began taking interest in Digitalsmiths during the due diligence process. In particular, the idea of Digitalsmiths-generated video metadata and indexing could become an interesting fit for Cisco's other products (remember that through its 2005 acquisition of Scientific-Atlanta, Cisco became one of the biggest suppliers of set-top boxes to video service providers. Cisco's also a leading maker of broadband access/routing infrastructure and in-home networks through Linksys).

Still, realizing this value is well down the road and will require working across multiple groups each with multiple priorities. For example, anything involving advanced advertising in the cable industry will also have to align with the growing role that Canoe is going to play in the industry. For now the upside of the Digitalsmiths investment is in how Eos leverages the company's technology.

Eos is a newcomer to the social media platform space, which has evolved considerably over the last two years. KickApps, Pluck and others have made a lot of headway in the media and entertainment vertical Eos is targeting; other verticals like sports, brand marketing and enterprise have also recently started to grow.

I have to admit that even after watching this almost year-old video of Dan explaining Eos, I'm still not sure I fully understand the role of Eos as a standalone offering from Cisco, especially when I read recently that its business model is a combination of a "nominal license fee and an ad revenue split." I mean, is there really enough financial upside in a hosted social media platform for mighty Cisco (fiscal Q1 '09 revenues of $10.3B) to pursue it? It's also worth asking whether Cisco has sufficient core software platform development competencies in this area. Certainly Cisco has plenty of financial muscle to back Eos, but is that enough to succeed in the crowded and scrappy social media space?

Yet another piece of this to consider is how players like Facebook and MySpace fit in at the intersection of social media and video. While neither is offering a white label platform (nor do I expect them to), last week's CNN/Facebook inauguration effort exposed the possibility that some major media companies may simply try to marry their video to these existing audiences. I've been a big fan of making broadband video more engaging through social applications but I'm cognizant that doing so is easier said than done. With resources increasingly scarce, some media companies may need to rethink how social they can afford to be.

For Eos, incorporating Digitalsmiths effectively would be a big help and could lay the foundation for other Cisco groups to benefit down the road as well. If Cisco's truly committed to the social media platform space this story will unfold over many years.

What do you think? Post a comment now.

There has been no shortage of stories in the last few days about the travails many people experienced when trying to watch President Obama's inauguration via broadband. While things worked flawlessly for many, for far too many others it was a frustrating and unfulfilling experience. As I wrote on Tuesday, the first "Broadband Inauguration" was a milestone opportunity for this new medium. Instead, it was a confusing flameout.

While I'm disappointed, I can't say I'm terribly surprised. Even as I was writing Tuesday's post, I found myself wondering if the Internet was really up to the task of handling this colossal and highly compressed live event. What I experienced personally that day, and have heard and read since, all underscore the massive inconsistency in users' experiences.

For example, Hulu worked fine for me. But when I tried to watch on CNN.com I couldn't even get the Flash plug-in to download (and btw CNN, talk about an inopportune time for a download!). I had no luck at NYTimes.com either. One person I spoke to this week said he couldn't get a stream at any of the major news sites and ended up watching at MLB.com of all places. Conversely, others reported no problems at all. No doubt you have your own particular stories.

So here's an attempt at putting all of this into perspective: no communications or transportation system is ever built to serve extraordinary peak demand. Instead they are built to serve typical demand plus an increment for periodic bursts. We don't have 15 lane highways so there's no congestion on Thanksgiving Day, while the other 364 days of the year 90% of the space is unused. Likewise, on inauguration day, wireless carriers were urging attendees to refrain from using their handsets for fear of overloading their networks. I can even remember back to the '80s when on heavy call days like Mother's Day, Ma Bell's gold-plated network would sometimes stymie me with an "all circuits busy" message.

And these are just a few examples. The reason things are this way is purely financial. It simply doesn't make economic sense to invest in so much extra capacity that's unused most of the time. No venture capital or institutional investor would tolerate capex budgets not supported by realistic use cases. The result is that on surge days like on Inauguration Day incremental available capacity is quickly swamped and many users expecting a flawless typical experience are disappointed.

If that's the sobering reality, then here's some good news. Tuesday's massive broadband interest, coupled with other heavily viewed live events, will likely spur further investment in all links in the Internet/broadband delivery chain. History shows us this is true. We may not have 15 lane highways today, but we often do have 4-5 lanes instead of old dirt paths because of cars' growing popularity 50-60 years ago. And we have 5, 10 and even 50 mbps broadband service now instead of pokey old dialup because Internet usage has soared in the last 10 years, demonstrating users' widespread willingness to pay and prompting huge broadband ISP investments.

What do you think? Post a comment now.

I'm pleased to present the third edition of the VideoNuze Report podcast, for Jan. 23, 2009. Once again Daisy Whitney and I are discussing select pieces we've written over the past few days to try to fill in between the lines a bit more. (And yes, in response to a number of requests, I hope to have the series available in iTunes by next week, so you're able to subscribe.)

This week we discuss:

"Does Text-Message Fever Indicate Burning Desire for Mobile Video?" - Daisy, 1/18/09

"Bloggers Find Space at NBC" - Daisy, 1/18/09

"The Broadband Inauguration and Beyond" - Will, 1/20/09

"Pixsy Premium Feed is Latest Entrant in the Syndicated Video Economy" - Will, 1/22/09

Click here to listen to previous podcasts (Jan. 16, '09, Dec. 23, '08)

Pixsy, a white label video search provider made an interesting announcement yesterday about the launch of its new "Premium Feed" service, which I think is another example of the Syndicated Video Economy that I've been talking about for a while now. I talked to Pixsy CEO Chase Norlin about Premium Feed to learn more.

For those of you not familiar with Pixsy, it has been quietly building one of the largest video indexes since its founding in 2005. To date it has mainly focused on licensing the index to partner sites which wanted to offer easy video discovery to their users. As more content providers have offered embedding, Pixsy also enabled found videos to be played right on its partners' sites. Even though activity has grown well, Chase is pretty candid about monetization to date being difficult.

Premium Feed takes embedding to the next level by creating a subset of Pixsy's video index that is both higher-than-average quality and has accompanying pre-roll and overlay ads. Then Pixsy is developing an economic relationship between the content provider and its publisher network by signing redistribution and revenue-sharing deals with both. Chase says that to date the publisher network has 45 million unique visitors/mo and that 1-2 million videos are in the Premium Feed.

One of those publishers is EgoTV, and I chatted with founder/president Jimmy Hutcheson to find out how they're implementing Premium Feed. If you look in the lower right corner of their home page you'll see 3 new "channels," Ego Cars, Ego Comedy and Ego Travel. Each of these are constructed solely of Pixsy Premium Feed videos that are curated by an EgoTV editor. In another example at Ego People, the 300x250 ad in the right column is now populated with the Premium Feed. This is a simple "highest-and-best-use" real estate decision: Jimmy explained that Premium Feed is yielding 2-4x as much net revenue for EgoTV as it would receive if it sold rich media ads in this position.

Yet each of these initiatives has its own somewhat differentiated value proposition and underlying technology approach. As syndication grows in importance, sites with strong traffic and an interest in incorporating video will have many choices. As to how they'll decide, Chase makes a good point: simplicity and one-stop shopping are always valued by resource-constrained sites. Providers that can address as many of these sites' potential needs will be in a strong position.

What do you think? Post a comment now.

This is quite funny, but also very embarrassing. Yesterday I was watching coverage of President Obama's first day on the job at Politico.com, one of my favorite political sites. Politico eschews pre-rolls in favor of overlays which is great because most of their videos are short clips.

But look at the graphic below and note the overlay running while President Obama is discussing the serious matters of governmental transparency and senior staff pay freezes. It is promoting a diet technique, and includes the obligatory "before" (flabby) and "after" (flat) tummy pictures. Clicking through brings you to a faux-blog page which is in turn a promotion for Nature's Best Acai Berry weight loss pills.

Hey Politico: what in heaven's name is this ad doing running during President Obama's somber remarks? Did Obama get tagged with "fit" or "great abs" based on his recent Hawaii vacation, thereby mapping any ad with "belly" or "diet" to him? If so, someone needs to tweak the system. And by the way - this is the kind of stuff that really undermines your brand. If you're going to expand into video, make sure someone is tasked with knowing what ads you're running so they don't end up embarrassing you!

What do you think? Post a comment now.

• Albert Cheng, EVP, Digital Media, Disney/ABC Television Group
• Greg Clayman, EVP, Digital Distribution & Business Development, MTV Networks
• Karin Gilford, SVP, Fancast and Online Entertainment, Comcast Interactive Media
• Curt Hecht, President, VivaKi (Publicis Groupe)
• Tom Morgan, Chief Strategy Officer, Move Networks

Click here to learn more and register for the early bird discount

The event will be held at the gorgeous Hudson Theater, a historic gem on West 44th Street just off Times Square. I'm pleased to have NATPE, VideoNuze's partner since launch, on board for the event. And I'm extremely grateful to lead sponsor Move Networks and supporting sponsor ExtendMedia (and others soon to follow) who are making the evening possible. Note, additional sponsorship opportunities are still available, contact me to learn more.

As with the last two VideoNuze events, my goals for the evening are straightforward: to enhance attendees' understanding of the broadband video market's key drivers and to create a high-quality forum for networking with industry colleagues to discover new business and personal opportunities.

In particular, unlike many other events we've all attended, where a seemingly random collection of panelists are assembled for an improvised discussion, these panelists have been hand-selected based on their specific responsibilities and their companies' roles in the broadband video ecosystem. We will have a rigorous discussion of many of the key industry issues VideoNuze covers each day. As those of you who have attended previous panels I've moderated understand, all the panelists will be well-prepared and fully engaged. There will also be ample audience Q&A time. Attendees will benefit from a unique learning experience.

Similarly, the VideoSchmooze networking reception will be a premier, focused opportunity to expand your network and pursue business and personal opportunities. As with past events, I expect a strong mix of established media and technology executives, along with early-stage startups, entrepreneurs and investors. And while VideoSchmooze is not meant to be a job fair, I do hope it can play a meaningful role in getting together some of the really terrific people who have been dislocated recently with companies that continue to hire.

In short, I'm really excited about the Broadband Video Leadership Evening, and hope you'll be able to come. Early bird discounted tickets are now available. I've also created more deeply discounted "5-Pack" and "10-Pack" tickets for those of you who expect to come with multiple colleagues. Note also that the event is being held on the eve of the 2009 McGraw-Hill Media Summit, so if you're already planning to come into town for that, please book your travel plan accordingly so you're able to join us too (I've arranged a discounted room block at the adjacent Millennium Broadway Hotel.) And yes, since March 17th is St. Patrick's Day, please feel free to wear your green!

Click here to learn more and register for the early bird discount

Another milestone in broadband video's evolution will be marked today with the first "Broadband Inauguration." Like last summer's Olympic games, broadband will make it possible for millions of viewers around the world to experience Barack Obama's dramatic inauguration.

Last Thursday Mediaweek had a pretty good roundup of all the various news and entertainment web sites that are going to be streaming the proceedings live. Clearly there is going to be an intense battle for online viewers today, with various interactive and participative offerings planned.

The broadband inauguration is indeed a big milestone. I expect many more are yet to come.