VideoNuze Posts

Veoh declared bankruptcy yesterday and laid off the last of its employees. For those of us who follow the online video industry closely, it wasn't a huge surprise, as Veoh has struggled for a while to find a business model while facing Universal Music Group's relentless copyright challenge (in which Veoh ultimately prevailed). Veoh's failure is a cautionary tale that even an early start, $70 million invested from blue-chip backers and strong user support aren't necessarily enough for success.

Veoh lived in YouTube's shadow from day one, and as it became apparent that UGC was a winner-take-all market which YouTube had won, Veoh scrambled for a new opportunity. It discontinued support for adult content, which alienated a core group of its users. It pushed to be an aggregator for premium video, sealing partnerships with CBS, MTV, Lionsgate, PBS and others, while continuing to attract independent content. But it got squeezed when Hulu appeared on the scene, which quickly became the de facto destination for premium programming. Veoh's last stand was promoting its "Video Compass" browser plug-in offering enhanced video discovery. A neat feature, but clearly not enough to build a company around. R.I.P. Veoh.

What do you think? Post a comment now (no sign-in required).

SpotXchange, the performance-based video ad network, took the wraps off its retargeting service this week and shared a case study of a quick service restaurant that used it to achieve dramatically higher conversion results. For those not familiar, retargeting refers to the practice of tracking users' behavior on specific sites and then serving them different ads on these sites (or others) they subsequently visit, depending on what behavior they've exhibited. Re-targeting is common in online display advertising, but as SpotXchange's CEO Michael Shehan explained to me, it's still nascent in online video advertising.

Because of its emotional impact, most video advertising is focused on branding, rather than trying to elicit a direct response, which is of course what search marketing is all about. Retargeting is a tactic to try blending the two benefits. Imagine a user who has poked around at a site promoting trips to the Caribbean, but who didn't click on the "Book Now" link. In subsequent visits to this site or others, video ads promoting Caribbean travel, with messaging like "What are you waiting for" and clear calls to action would help move the user along the buying process. It's still early for video ad retargeting, but to the extent that it can help conversion rates and in turn spur higher CPMs, it will be welcomed in the market.

What do you think? Post a comment now (no sign-in required).

Sports Illustrated's 2010 swimsuit edition hit the stands this week and video is a central part of its promotion. For the real die-hards, SI has been hosting a series of videos with the models at its Ustream channel. There's also a collection of videos at the site, though I have to say the video quality is surprisingly mediocre. SI has also included "JAGTAGs" in the print issue. When readers take a picture of the JAGTAG with their phone and send them in via MMS, they receive additional behind-the-scenes videos of the models. I give SI credit, they're really turning the swimsuit edition into a multi-media extravaganza. If (and it's a big if) the iPad sells well, SI will be able to do even more next year. I continue to believe that video gives magazines a whole new editorial and advertising opportunity which some like SI are aggressively pursuing.

What do you think? Post a comment now (no sign-in required).

In yesterday's post, "Google's Fiber-to-the-Home Plan Could Cost $750 Million or More" I sounded a skeptical note about the company's intention to build out 1 gigabit/second experimental broadband networks to between 50,000-500,000 U.S. homes. Yesterday I was a guest on the Emily Rooney radio show which airs on WGBH 89.7 FM in the Boston area, and I provided further detail on why I think Google's plan is suspect. (Click here to listen; you need to select the Feb. 11th show and my segment starts at about the 21 minute mark.)

While Google's plan has stirred up a lot of conversation, I've yet to talk to anyone who believes it will have much actual impact. I know this will sound cynical, but if Google's real intent with the gigabit experiment is to promote the company's net neutrality position and influence Washington broadband policy-making, I think a far better use of its resources would simply be to spread significant lobbying largesse around to key legislators. Regrettably, that's a much more direct way of getting Washington's attention. Building physical residential fiber networks is very heavy lifting, even more so for a company that's operated strictly in the ether. And the potential cost of this project is daunting, even for Google. If anyone has some real insights into what Google's thinking here, I'd love to hear them.

What do you think? Post a comment now (no sign-in required).

Daisy Whitney and I are pleased to present the 49th edition of the VideoNuze Report podcast, for February 12, 2010.

This week Daisy and I dig into the 2009 comScore data that I detailed in my post on Tuesday (slides available for download too). It was a blistering year for online video, with total streams growing from 14.8 billion in Jan '09 to 33.2 billion in Dec '09. All the other relevant metrics also recorded strong growth. I share more details on the numbers and what they mean, focusing particularly on the top 2 sites YouTube and Hulu.

Then Daisy discusses her takeaways from the recent iMedia conference she helped organize. She talks about how brands are trying to break through the clutter, and the role of online video ad networks. Finally, she also discusses recent interviews she conducted with Facebook executives.

Click here to listen to the podcast (13 minutes, 55 seconds)

Click here for previous podcasts

The VideoNuze Report is available in iTunes...subscribe today!

I hope for Google's sake that it understands the cost to build its 1 gigabit/second ultra high-speed fiber network experiment announced today could be $750 million or more. Even for Google that's a very big number, especially considering the company has said it has no intention of actually pursuing this as a business. Of course, we don't know exactly what Google is forecasting its project costs to be, but using Verizon's FiOS numbers wouldn't be a bad starting point to do the math. So here goes.

Google said it would offer the gigabit service to between 50,000 and 500,000 people. Let's start at the high end of that range. Verizon has disclosed that it will spend $18 billion to pass approximately 18 million homes in its footprint with its FiOS fiber-to-the-home network. It's not fair to do a straight average and assume that Verizon is still paying $1,000/home passed given that its costs have no doubt declined over the years. However, in Google's case, since it has approximately zero experience laying fiber in neighborhoods, and won't get the same level of vendor discounts that Verizon enjoys, it is probably fair to assume Google will spend at least $1,000 per home passed. So if it goes all the way to 500,000 homes, that's $500 million in neighborhood build-out costs.

But that's only to wire the neighborhoods, then the service has to be deployed in the homes themselves. That means in-home wiring, on-premise equipment, labor, trucks, insurance, overhead, etc. Estimates for Verizon's per home cost vary, but $500 is in the range often cited. In Verizon's case they're also deploying a set-top box to deliver TV, which Google hasn't announced plans to do (more on that below), so that cost should be deducted. But on the flip side, once again, because Google has never wired a consumer's home (that I'm aware of anyway) it has a steep learning curve ahead of it, meaning its costs could be much higher than Verizon's.

But to make things easy, let's just use the $500 per installed home. So 500,000 homes at $500 apiece, another $250 million for the project. Add it to the $500 million for the neighborhood build-outs and the total is $750 million. This assumes Google decides to go all the way to 500,000. Obviously if it stopped at 50,000, the costs would be a lot lower.

Executives at cable operators and telcos - who build and operate residential networks for a living - are very familiar with modeling network deployment costs. But I wonder, how familiar do you think Google is? Does it know what it has bitten off here? And for what benefit exactly - to test next-generation apps? Hmm. Everyone knows video is the biggest bandwidth hog; an expensive experiment isn't going to change that. And also remember, Google only plans to sell broadband Internet access, not a full bundle with TV or voice. It says it will do this at competitive prices, which means around $50-$100/mo. At these revenue levels and with operating costs that I haven't even mentioned, it's inconceivable to me that there's a positive business case for Google's gigabit experiment.

I'm all for innovation and for pushing competitors along. But Google's experiment really has me scratching my head. No doubt the folks at Verizon, Comcast and other big broadband ISPs are wondering as well. It's one thing for Google to throw $2.5-$3 million at a 52-second Super Bowl ad, but quite another to be contemplating a $750 million experiment with ambiguous goals. What am I missing?

What do you think? Post a comment now (no sign-in required).

Paltalk, the long-time video chat technology provider, is announcing its Paltalk 9.9 beta release today, which includes a feature called SuperIM URLs, which allow users to initiate 1-click, in-browser video conferences without any client download. It's a clever feature that promises to drive higher adoption of personal video conferencing. Paltalk's CEO Jason Katz walked me through a demo yesterday.

SuperIM URLs work like this: say I'm a registered Paltalk user (either free or paid) so I've already downloaded the Paltalk software. I then select a personalized SuperIM address, for example http://www.wrichmond.superim.me. Then I begin publicizing the URL to friends, say through tagging my email signature, Facebook page or business card. People who see the URL simply click on it and, as long as they have a webcam, are instantly connected via video chat with me. Just so I don't have people barging in on me on a bad hair day, I can set privacy controls to always require accept/decline. I can also password-protect the link so I only hear from people I want to. I can also set it so only audio comes on first and I have to manually start the webcam.

I can have up to 10 people in a video chat and display the participants in different mosaics. The most obvious competition for SuperIM URLs is Skype, which I use for video calls. Jason agreed that while Skype does a lot of things really well, Paltalk SuperIM's big differentiator is that it does not require the caller to have downloaded any software to participate.

With SuperIM, the caller simply clicks on the URL provided and is connected. In effect, the conferencing capability is brought to users instead of the other way around. The goal is to make it so easy that anyone's "grandmother can use it" as Jason put it. Even though Paltalk has had its client downloaded some 70 million times, Jason acknowledged that it's a "busy Internet," and it's getting harder and harder to induce people to download any new software.

Another differentiator is Paltalk's multi-party capability, which Skype doesn't offer. This means that a Paltalk user could set up a multi-party video chat around a specific event simply by sending out the SuperIM URL to friends, asking them to click-through at a certain time (think "virtual Super Bowl party").

Going forward, Jason said Paltalk plans to eliminate the step of even having the initial user download the Paltalk software. Paltalk wants to become ubiquitous for mobile users and other portable devices like the iPad. Jason also makes an interesting point that with the spread of $300 Internet-connected netbooks with built-in webcams, personal video conferencing has become more accessible than ever. Paltalk is also aiming for tighter integration with Facebook, so users can initiate video chats to their friends.

I vividly remember that George Jetson's video phone was just about the coolest thing I'd ever seen when I was a kid. SuperIM URLs are yet another indication that the Jetsons' world is upon us.

What do you think? Post a comment now (no sign-in required).

Filckr image via writetechnology

Next Tues, Feb 16th at 10am PT / 1pm ET, Microsoft Enterprise Search (a VideoNuze sponsor) will be presenting a complimentary webinar, "Media and the Money Trail: Connecting with the New Digital Consumer" with Greg Clayman, MTV's EVP of Digital Distribution and Jennifer Kavanagh, Oxygen's VP of Digital & New Media.

Greg and Jennifer will be sharing a deep-dive look into how their companies are re-thinking their business models, experimenting with new ways to engage their audiences and assessing new technologies. The webinar promises an excellent opportunity for industry professionals to learn from two companies on the leading edge of the digital revolution.

Register now - It's FREE!