VideoNuze Posts

Broadband video's influence on Election Year 2008 grew further with today's announcement of the "YouTube Voter Video on C-SPAN" initiative.

To build momentum toward the Pennsylvania primaries on April 22nd, the companies are inviting viewers to upload to the C-SPAN channel on YouTube videos answering the questions "what issue in this election is most important to you, and why?" C-SPAN will air a selection of the videos on its "Road to the White House" program beginning April 13th.

I think this is a clever, fun idea to help drive awareness and share disparate views on the election. Though participation is completely self-selected, it will certainly offer much-needed dimension to the dry polling results constantly churning through the media. Combined with the CNN/YouTube debates from a couple months ago, Election Year 2008 continues to show how much more dynamic and inclusive the process becomes with broadband video's influence.

The broadband video market's focus on content syndication continued this morning as Brightcove, a leading video management platform, announced partnerships with Bebo, Meebo, RockYou, Slide and Veoh.

Enabling managed syndication is becoming an imperative for video management platforms like Brightcove as customers increasingly seek to proliferate their content to multiple distributors. In particular, social networks like Bebo and others are prime syndication targets. They have huge and highly engaged users who can drive huge volumes of video streams.

However, syndication raises a host of new operational issues, which in turn creates an opportunity for companies like Brightcove to add value to their platforms. Issues include rights management, monetization, tracking/reporting, business model implementation and others. Syndication is an exciting new push for many, but is already starting to pay off. One recent example is CBS Television Stations, which now derives more than 50% of its total monthly streams just through its syndication deal with Yahoo.

(Note: Brightcove is a VideoNuze sponsor)

Continuing VideoNuze's series of posts about the online video advertising industry, last week I spoke to Alistair Goodman, who's the VP of Strategic Marketing at Exponential Interactive, a media services company with hundreds of advertising clients and publishers in the digital media space.

Exponential recently released the results of a survey of 100 ad agency media planners' perceptions of online video advertising. To the best of my knowledge, the survey, "The Trials and Tribulations of Online Video Advertising," is the first one focused on what the people actually responsible for spending money in this new medium think (the survey is evenly split between those who have bought and those considering buying). Most prior research has focused on users' or publishers' attitudes. The research confirms many things I hear each day, and also reveals some new insights on the market.

I'm very pleased to offer a complimentary download of a subset of the Exponential's slides exclusively here at VideoNuze. If your business is reliant on video advertising, I highly suggest reviewing them. If you have questions or want to receive the full deck, there is contact info on the last slide.

The top 2 issues for planners who have actually bought video ads are operationally-oriented: "smooth delivery" and "detailed reporting." As Alistair described it, these factors (and others cited) confirm the complexity of executing a campaign at scale. The complexity results from lack of standards, multiple players/formats, fragmentation of viewership and non-standard metrics. None of this is unexpected in a market as nascent as online video; the challenge is addressing and resolving these quickly for online video to reach its full potential.

In the past I've mentioned repeatedly that monetization is the number 1 priority for both established and early stage video content providers. This is an urgent issue because lots of energy and money is being invested in creating online video content, but the financial returns are not there yet. These payoffs need to materialize if the enthusiasm around this new medium is to be sustained.

Click here to download the Exponential slides.

(Note: I have created a new section in VideoNuze to offer all downloads of all relevant market research. If you have complimentary industry data please contact me and I'll add it to the page.)

Today, I'm pleased to welcome the first post from Colin Dixon, Practice Manager, Broadband Media at The Diffusion Group, who is also a longtime industry executive.

I also want to highlight that as part of The Diffusion Group's 4th anniversary today, it is offering a special promotion for new clients of 4 reports for $4,000 (reports are usually $2,500 apiece) which also includes a 30 minute consult with founder/principal analyst Michael Greeson. The opportunity will be available for 4 hours, 4 minutes, from 12 noon U.S. Central Time today. Enjoy!

BBC's iPlayer a Model for U.S. Networks?

by Colin Dixon, The Diffusion Group

There's a lot of angst in Hollywood at the moment over broadband video. With video advertising models online in their infancy, the content providers are rightfully concerned about cannibalizing their linear channel ad revenue for unproven broadband models. Will eyeballs follow if a content provider puts all of its shows online? What's the right balance between too little and too much online content? With the variable quality of broadband connections, should a viewer be able to download the show for free rather than streaming it? Questions such as these are the source of much hand-wringing.

But what would happen if a major network were to throw caution to the wind and put everything they broadcast online and let their viewers download the shows for free to watch when and where they liked? Perhaps we can learn some lessons from the UK where the BBC, unfettered by the profit motive, is doing just that.

Late last year the BBC released its iPlayer through broadband connections to the British public. This proprietary client, available on PCs and iPods throughout the UK, makes available for free download every show broadcast on all of the BBC's many radio and television channels. Once downloaded, a show can be watched, ad free, anytime over the following 30 days (although once you start to watch a show, you have 7 days to finish viewing it.)

The British public, apparently, love it. In January, they downloaded some 11 million shows with usage of the service peaking at over a half million downloads in one day. Over 2 million people are perfectly comfortable relaxing in front of the PC catching up with the latest episode of "Doctor Who" or "EastEnders." And because the show is downloaded, not streamed, the quality is always great and the shows can be watched when and where it's convenient.

But perhaps this is just a British thing. Surely the same rules don't apply to the US market? Far from it. As we found when we surveyed broadband video users, there is strong evidence that US users will embrace online delivery with the same fervor as their UK brethren. When we surveyed nearly 2000 US broadband users, we found that 40% were watching an hour or more of broadband video. More amazing still is that 12% of broadband users were watching 25% or more of their television online. If you have a teenager in your home, I'm sure this will not come as a surprise to you!

Numbers like this are noteworthy in themselves. But it's important to remember that, in comparison to the BBC's iPlayer, the online viewing experience in the US is a mess. Shows are scattered over multiple websites and free ad supported show downloads are rare indeed. Broadband video viewing is an incredibly variable, often frustrating experience. What is clear is that given the same circumstances, the BBC's experience is likely to be repeated here.

The message for US content providers is clear: if you put it all online for free, and let people download and watch whatever, wherever and whenever they want, the eyeballs will follow. But with large numbers of people already devoting 25% or more of their TV viewing online, the issue of cannibalizing existing linear broadcast ad revenues is rapidly becoming irrelevant. The ad revenues will migrate to the Internet anyway!

One can only speculate what can happen when, as we predict for 2011, there are over 100 million households worldwide that are watching broadband video not from their PCs, but from broadband-enabled TVs.

What do you think? Post a comment and let everyone know!

I frequently hear the same segmentation framework used to describe today's broadband video providers. Between the small group of premium providers (e.g. broadcasters) and user-generated sites (e.g. YouTube), lie the so-called "mid-tail" (in "Long Tail" terminology) providers such as newspapers, magazines, online publishers, and indie producers. BobVila.com is a perfect example of a mid-tail provider. Dan Newberry, the company's VP Advertising and Marketing, who I recently spoke with, discussed these opportunities and challenges.

Some of you may know that Bob Vila hosted a hugely popular PBS program from 1979-1989 called "This Old House." He then set up his own production company and produced 2 syndicated shows, "Bob Vila's Home Again" and "Bob Vila." At the end of the latter's run, he decided to shift his focus exclusively to online, to his BobVila.com web site which had been growing since the Internet's earliest days.

As Dan explains, one of the motivations (in addition to Bob Vila's personal reasons) was the improving climate for online advertising in general and video advertising in particular. The economics of creating quality programming for TV vs. for online, plus the CPMs available online, made the case for shifting to online only. The site now generates 1.7 million unique visitors/mo and 600K-700K video streams/mo, with 1,700 video clips available.

Responding to its audience's desires, BobVila.com now produces 5-7 minute step-by-step how-to videos for the site. It has created about 100 since June '07. While broadband enables this new model, Dan is clear about the challenges.

First and foremost is making the financial equation work. This involves producing videos on a disciplined budget and maximizing ROI. Their target cost to produce each video is $4-5K, which requires a different approach than with TV production. Given current viewership and CPMs, Dan calculates that break-even on an individual video is projected at 24 months.

To monetize their video, BobVila.com uses an internal sales team and is able to generate pre-and mid-roll CPMs in the $25-40 range. If there's unsold inventory then it uses a network to sell it, usually garnering $7-12 CPM. In addition, it also selectively uses overlay ads from Google AdSense. Setting the ad strategy to maximize revenue is key. As Dan noted, staffing and managing an internal sales team in this highly competitive environment is a challenge that startup sites need to fully recognize.

Increasing video views is another key challenge. Acknowledging the limitations of search and on-site generated traffic, BobVila.com is ramping up an aggressive syndication effort. While offering lots of upside, Dan explains that this syndication will present new operational and financial complexities such as ensuring BobVila.com gets paid, content is distributed where and when it should be, enforcing various rights issues, etc. Dan pointed out the importance of having a solid technology partner (BobVila.com used PermissionTV) which enables syndication, flexible players and content management.

When you put it all together, it's clear that while broadband offers mid-tail providers like BobVila.com huge new opportunities, it also creates new challenges and responsibilities that many content providers have not typically dealt with. Surmounting these will determine how well these mid-tail providers ultimately fare.

Three exciting examples of how marketers are using broadband to drive their branding objectives recently hit my radar: Cartier, Campari and CIT.

Though the campaigns differ widely, they all strive to convey brand attributes by creatively using video. Interestingly, they also each use traditional print publications to drive awareness of their broadband efforts. This illustrates how important multi-platform marketing has become.

Cartier, the luxury products company, recently began re-promoting its mini-site supporting its "Love" line of jewelry. This campaign originally kicked off in '07 but I found it via a screen takeover ad at NYTimes.com. The mini-site includes 12 short videos from director Olivier Dahan (La Vie En Rose). Each video depicts a couple in various states of their relationship. Shot in black and white with low lighting and mood music, each evokes a luxurious sensibility that is consistent with the Cartier brand and "Love" line. Though purely entertaining, they create an engaging experience that would be impossible to replicate in traditional 30 second TV ads.

Meanwhile, Campari, the Italian liquor, is re-promoting its "Hotel Campari" min-site featuring Salma Hayek. I previously wrote about this last July, and once again found out about the site through an ad in The New Yorker magazine. Campari uses a more overtly seductive approach than Cartier, featuring Ms. Hayek gliding down a hallway ignoring all kinds of enticements until settling on a Campari on the rocks. The video nicely supports Campari's exclusive positioning, introducing the brand to audiences via the well-known, yet still-exotic actress. With liquor ads barred from TV, Campari is making great use of the unregulated broadband medium.

Lastly, there's CIT, the financial services giant, which has updated its "CIT: Behind The Business" video interview series with leading business executives. This first caught my eye last November, and the current interview with Jon Luther, Chairman and CEO of Dunkin' Brands is promoted via a 4-page insert also in the latest New Yorker edition. CIT differentiates itself by promoting how it brings "knowledge, expertise and creativity" to its client relationships. The interview series supports that positioning perfectly by eliciting insights in a low-key, yet engaging manner. Though clearly not as eye-catching as Cartier's and Campari's videos, CIT's videos and serialized nature serve its brand well.

These three campaigns show how broadband video continues to be used by savvy brands to better engage their target audiences. They also demonstrate how entertainment programming and brand marketing continue to converge. I expect more of this to come.

The stampede into broadband-only comedy shorts continued yesterday with Sony launching "C-Spot". The six short series will run on Sony's Crackle.com, YouTube, AOL Video, Hulu, Verizon Wireless' VCAST and others likely to come.

Comedy has been such a popular genre online because it is cheap to produce, easy to digest in short bursts and doesn't require story narratives to be compelling. What we've seen to date largely appeals to the young male demo which can't seem to get enough of the gross-out or sophomoric skits or hot ladies delivering goofy laugh lines.

I sampled a few of C-Spot's new programs and while I won't pretend to be a professional reviewer, I did find them to be a cut above some of the average comedic fare I've found elsewhere. Plus I think Sony's onto something by serializing these shorts and releasing new episodes on specific days of the week.

Though broadband is truly an on-demand medium, I continue to believe that audience-building requires habituation that is only driven by regularly-scheduled new releases. Prom Queen (though not a comedy) met with success by serializing, and I've been surprised there haven't been more imitators to date.

Regardless of format, I'm expecting comedy will remain the broadband medium's hottest genre, attracting indies and established players alike.

In a startling development, VideoNuze has confirmed that The Walt Disney Company has decided to sell its ABC television network to Apple CEO Steve Jobs, who is also Disney's largest individual shareholder. Disney is planning to devote most of the billions in proceeds to developing broadband-delivered video webisodes.

The sale, which was unexpected, is certain to ripple throughout the entire media and technology landscape. It is a highly unorthodox transaction that experts believe will be heavily challenged by other Disney shareholders who will claim the deal exceeded CEO Bob Iger's individual authority.

The deal was concluded following a high-stakes poker game held at Iger's Brentwood, CA mansion on Saturday night, in which Jobs and other media and technology industry heavyweights participated. Though the Iger-Jobs relationship has been described publicly as cordial, apparently a series of raises, bluffs and too many scotches laid bare a simmering rivalry between the two moguls.

VideoNuze has learned that with no limits in place, the two CEOs became embroiled in a titanic game of 7 card stud, leading to a round of ante raising that left other players - who had long since folded - gasping. With their chips exhausted, Iger is said to have wagered his double titanium American Express card with a $1 million dollar limit, only to be matched by Jobs placing his unique gold-plated iPhone (believed to work on a private AT&T Wireless frequency that AT&T granted to Jobs in order to gain the lucrative iPhone exclusive) on the table.

Within minutes Jobs further raised the ante by offering up all of his Apple shares. Unable to see the multi-billion dollar raise, Iger and Jobs were able to shake hands on a preliminary deal, allowing Iger to throw ABC into the pot, seeing Jobs's Apple shares. When Jobs revealed 4 aces to Iger's 4 kings, the lawyers were summoned to begin papering the deal.

Explaining what will surely be viewed as a rash move, Iger is said to have told Disney executives that from a strategic perspective his bet in fact made sense. His rationale: that the first month of results from Stage 9, Disney's new digital studio provided him ample data that broadband-delivered video was worthy of its hype and that he wanted to go "all in" with a multi-billion dollar commitment. That thinking left Wall Street observers stunned, as the only Stage 9 program that has launched to date is the comedy short, "Squeegees." The program has garnered several hundred thousand views on YouTube, but has generated no revenue.

Commenting on the deal, VideoNuze's Will Richmond said "Look, I've been saying for years that broadband video was going to remake the media landscape and take over the world, but I just can't believe Iger could have lost ABC to Jobs in a poker game." He continued, "I can only conclude the whole episode is just an April Fool's Day joke."