VideoNuze Posts

New research shows TV viewing shifting - Mediapost had a good piece this week on Horowitz Associates' new research showing that 2% of all TV programming watched now occurs on non-TV devices. This translates to 2 hours of the 130.2 hours of TV that viewers watch each month shifting. This top line number is a little deceiving though, as the research also shows that for viewers who own a PC or laptop, they watch 9%, or 13 hours of TV programming per month, other than on their TV. I plan to follow up to see if I can get breakout info for young age groups, my guess is that their percentages are even higher.

I've been very interested in these kinds of numbers because there has been much debate about whether making full-length programs available online augments or cannibalizes traditional TV viewing. The broadcast networks have forcefully asserted that it only augments. I agree online augments, but I've suspected for a while that it is also beginning to cannibalize. If networks generated as much revenue per program from an online view as they do from an on-air view this shifting wouldn't matter. But as I wrote in Mediapost myself this week, the problem is they probably only earn 20-25% as much online. TV viewers' shifting usage is a key area to focus on as broadband video viewership continues to grow.

PermissionTV becomes VisibleGains, targets B2B selling - PermissionTV, one of the original media-focused online video publishing and management platforms, officially switched gears this week, changing its name to VisibleGains. Cliff Pollan, CEO and Matt Kaplan, VP of Marketing/Chief Strategy Officer briefed me months ago on their plans and I caught up with them again this week. Their new focus is on enabling companies to provide their prospects with informative videos during the information-gathering phase of the sales process.

Cliff argues persuasively that in the old days the sales rep presented 80% of the information about a product to a prospect; now prospects collect 80% of what they need to know online, and the sales rep then fills in the blanks. Through VisibleGains "ask and respond" branching format, companies better inform their prospects, qualify leads and add personality to their typical text-heavy web sites. It's another great example of how video can be used beyond the media model.

Unicorn Media demo is impressive - Even as PermissionTV changes its focus, Unicorn Media is entering the crowded video platform space. I mentioned Unicorn, which was founded by Bill Rinehart, founding CEO of Limelight, in my 4 items post a couple months. This week I got a demo from CTO AJ McGowan and Chief Strategy Officer David Rice and I was impressed. Key differentiators AJ focused on were an enterprise-style user rights model for accessing the platform, APIs that allow drag-and-drop content feeds, and an "ad proxy" for configuring ad rules.

Most interesting though is Unicorn's real-time data warehouse feature, which provides granular performance data up to the minute. Data can be displayed in a number of ways, but most compelling was what AJ termed the "magic Frisbee," a clever format for showing multiple data points (e.g. streaming time, ad completes, # of plays, etc.) all at once, so that decision-makers can hone in on performance issues. AJ says prospects are responding to this feature in particular as assembling this level of information today often requires multiple staffers and data sources. David reports that Unicorn is finding its biggest opportunity is with large media companies that have built their own in-house video solutions, as opposed to competing with other 3rd party platforms. Unicorn doesn't charge a platform fee, instead it bills by hours viewed. Separately, I have a briefing next week with yet another stealthy platform company; there seems to be no shortage of interest in this space.

Vitamin D shows breakthrough approach to object recognition in video - Speaking of demos, Greg Shirai, VP of Marketing and Rob Haitani, Chief Product Officer from startup Vitamin D showed me their very cool demo this week. Vitamin D is pioneering a completely new approach to recognizing objects in video streams, using "NuPIC", an intelligent computing platform from Numenta, a company founded by Jeff Hawkins, Donna Dubinsky and Dileep George. Some of you will recognize Hawkins and Dubinsky as the founders of Palm and Handspring.

The demo showed how Vitamin D can recognize the presence of moving humans or objects throughout hours of video footage. While the system starts with the assumption that upright humans are tall and thin, it learns over time that their shapes can vary, if for example they are crouching, or carrying a big box, or are partially obscured behind bushes. Once recognized, it's possible to filter for specific actions the humans are taking, such as walking in and out of a door to a room. Vitamin D is first targeting video surveillance in homes or businesses, but as it is further developed, I see very interesting applications for the technology in online video, particularly in sports and advertising. Say you wanted to filter a Yankees game for all of CC Sabathia's strikeouts, or insert a specific hair care ad only when a blond woman was in the last scene. Vitamin D and others are continuing to raise the bar on visual search which is still in its infancy.

Daisy Whitney and I are pleased to present the 35th edition of the VideoNuze Report podcast, for October 9, 2009.

This week Daisy and I first discuss Daisy's New Media Minute piece on how book publishers and authors are building iPhone apps, which include video, to enhance their books. The apps also present content in the interval between when a book is finished and when it finally hits the store shelves. Daisy highlights apps for marketing expert Bob Gilbreath's new book "The Next Evolution of Marketing" and novelist Nick Cave's new book "The Death of Bunny Munro." While the book publishing industry is not known for being on the bleeding edge of technology adoption, interest in iPhone appears to be building.

Speaking of publishing, I provide more detail on my post this week "Goumet Magazine's Closing Offers Lessons for Navigating the Broadband Era." I received a lot of emails in response to this post, as the 68 year-old Gourmet clearly had a passionate following and its shuttering by owner Conde Nast was further evidence of how the media industry is changing. I contend that media brands need to embrace a multi-platform approach to survive. It's not good enough to simply be a great magazine anymore. All media brands need to figure out how to play in both online and mobile video.

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While many in the industry are focused on the shift of long-form premium content to online viewing - and importantly its financial viability - Metacafe and others are continuing to prove the appeal of short-form premium content online. Although it's tempting for many to see the online video platform as a me-too medium to distribute existing programs, Metacafe's success shows that online video has its own unique usage characteristics which can be exploited. I caught up with Metacafe's CEO Erick Hachenburg recently to learn more.

Metacafe focuses on 5 "hubs": TV, Movies, Music, Sports and Video Games, which was just launched in mid-September with EA as the lead sponsor. There are also "channels" which group content by partner. Metacafe works closely with content partners like studios, TV networks, sports leagues, independent broadband-only producers and video game publishers. It also accepts user uploads, but these are filtered through an internal process before being posted on the site. Erick explained that Metacafe strives for an "entertainment sensibility" across the hubs as a differentiator.

Browsing through the site reveals a combination of clips, trailers and UGC videos. One thing you notice quickly about Metacafe is that it is very orderly. It's not just that content is well presented, but also that videos seem to be where they should be, have accurate descriptions and play with uniform quality. While YouTube can often feel overwhelming, Metacafe feels like a better managed environment. This reflects Metacafe's emphasis on curating everything that goes on its site, so that specific content gets showcased and any duplicates are removed.

The approach appears to be working. In July Metacafe had its best month, attracting 12 million unique visitors in the U.S. according to comScore, up 67% vs. July '08. Because Metacafe doesn't syndicate out its content, preferring instead to build a community-centric destination, it wants to be judged by how well it ranks as a destination video site. By this count according to comScore, it's behind only YouTube, which is a clear #1 with 98 million visitors. Globally Metacafe was #3 in July at just over 50 million visitors, behind YouTube (437 million) and Dailymotion (58 million) according to comScore. Of course because syndication is such a huge trend, the rankings are completely different when this is factored in, with Metacafe falling out of comScore's top 10.

Validating the short-form genre's online appeal, research Frank N. Magid Associates conducted over the summer showed that 37% of consumers it surveyed said they found short professional videos equally or more entertaining than full-length TV shows on their television set. In addition, it found that 8 of the top 10 most watched types of online video are short form, with UGC, news, music videos, movie previews and comedy topping the list. While the Magid research was sponsored by Metacafe, it synchs with what I continue to hear anecdotally. With most online viewership still on the computer, and in-browser, short clips are most natural to watch for many.

Erick also reported that Metacafe is generating 20-25% quarter-over-quarter revenue growth and is poised to break even sometime in 2010. A key ad unit the site uses is a large billboard which dominates the top of the page. Pre-rolls seem to be inserted before every clip viewed; I didn't notice any frequency capping.

Add it all up and Metacafe's focus on curated short-form premium content in entertainment-related categories seems to be paying off, proving that there's success to be had operating in the long shadow of both YouTube and TV-oriented sites like Hulu.

What do you think? Post a comment now.

Earlier this week when Conde Nast pulled the plug on Gourmet magazine and 3 other titles, there was much hand-wringing about the depressed state of the magazine industry. But while falling ad sales, costs of production, editorial issues and redundancy were all contributors to the 68 year-old Gourmet's ultimate fate, in my view, its failure is part of a much larger story of how much the media business has evolved. More specifically, Gourmet offers abundant lessons for those trying to successfully navigate the broadband era.

The problem is that this model is out of synch with the way many real people actually experience media today. People affiliate with media brands in a more deeply self-identifying way. It's no longer just the information and entertainment that's conveyed, but also about the statement affiliating with that media brand makes and/or the implied trust and comfort that's provided. For better or for worse - depending on your perspective - brand affiliation is now a deeply ingrained part of our cultural landscape.

Smart advertisers know this too. They are not just interested in just reaching their target audience when they pick up a magazine for example. They want to surround consumers with their brand whenever consumers engage with their chosen media. Advertisers continue to grapple with how to optimize their media spending to gain mindshare and drive sales.

Forward-thinking media companies have realized for sometime now that changing consumer and advertiser preferences must drive the way they do business, not the other way around. Two examples I like to cite are ESPN and Food Network, two highly successful cable networks that have built strong media brands and prospered by constantly reinforcing the value of their core franchises.

Among the many non-cable activities each has launched are successful magazines. That may seem ironic given the magazine industry's woes, but in truth each has figured out how to extend their brand, editorial, and importantly, advertiser interest into print. Food Network magazine's recent success is all the more remarkable; while Conde Nast has undergone a wrenching downsizing, Food Network Magazine, which launched in October '08 (in partnership with Hearst), has recently expanded its circulation base to 900,000, nearly on par with what Gourmet achieved after 68 years.

Noteworthy for ESPN and Food Network have been their successful online initiatives and push into broadband video, all reinforcing their core franchises. In addition to its ad and commerce supported web sites, ESPN has rolled out ESPN 360, a subscription online video service available in 41 million U.S. broadband homes for which ISPs pay a monthly fee. Food Network too has been busy expanding its franchise in online video, among other things recently launching Food2, a broadband-only channel catering to younger viewers that cultivates up-and-coming talent. And as I wrote on Monday, Scripps Networks (Food's owner) just announced a deal with 5Min (an online video syndication platform) to proliferate its content across the web while also gaining access to additional targeted ad inventory to sell.

What do you think? Post a comment now.

VideoSchmooze is just a week away, on Tues, Oct 13th from 6-9pm at the Hudson Theater in NYC. I'll be moderating a panel titled "Realizing Broadband Video's Potential" with Dina Kaplan (blip.tv), George Kliavkoff (Hearst), Perkins Miller (NBC Sports) and Matt Strauss (Comcast). We'll be digging into all the hottest broadband and mobile video questions, with plenty of time for audience Q&A.

Following the panel we'll have cocktails and networking with industry colleagues you'll want to meet. Approximately 200 people are now registered, from companies like Sprint, Google/YouTube, Cox, MTV, Cox, PBS, NY Times, Morgan Stanley, Hearst, Showtime, Hulu, Telemundo, Cisco, HBO, Motorola and many others. Register now!

Adobe launches Flash 10.1 with numerous video enhancements - Adobe kicked off its MAX developer conference with news that Flash 10.1 will be available for virtually all smartphones, in connection with the Open Screen Project initiative, will support HTTP streaming for the first time, and with Flash Professional CS5, will enable developers to build Flash-based apps for the iPhone and iPod Touch. All of this is part of the battle Adobe is waging to maintain Flash's lead position on the desktop and extend it to mobile devices. The HTTP streaming piece means CDNs will be able to leverage their HTTP infrastructure as an alternative to buying Flash Media Server 3.5. Meanwhile Apple is showing no hints yet of supporting Flash streaming on the iPhone, making it the lone smartphone holdout.

Hulu gets Mediavest multi-million dollar buy - Hulu got a shot in the arm as Mediaweek reported that the Publicis agency Mediavest has committed several million dollars from 6 clients to Hulu in an upfront buy. Hulu has been flogged recently by other media executives for its lightweight ad model, so the deal is a well-timed confidence booster, though it is still just a drop in the bucket in overall ad spending.

IAB ad spending research reports mixed results - Speaking of ad spending, the IAB and PriceWaterhouseCoopers released data yesterday showing overall Internet ad spending declined by 5.3% to $10.9B in 1H '09 vs. 1H '08. Some categories were actually up though, and online video advertising turned in a solid performance, up 38% from $345M in 1H '08 to $477M in 1H '09. Though still a small part of the overall pie, online video advertising's resiliency in the face of the recession is a real positive.

Yahoo ups its commitment to original video - Yahoo is one of the players relying on advertising to support its online video initiatives, and so Variety's report that Yahoo may as much as double its proportion of originally-produced video demonstrates how strategic video is becoming for the company. Yahoo has of course been all over the map with video in recent years including the short tenure of Lloyd Braun and then the Maven acquisition, which was closed down in short order. Now though, by focusing on short-form video that augments its core content areas, Yahoo seems to have hit on a winning formula. New CEO Carol Bartz is reported to be a big proponent of video.

AEG Acquires Incited Media, KIT Digital Acquires The FeedRoom and Nunet - AEG, the sports/venue operator, ramped up its production capabilities by creating AEG Digital Media and acquiring webcasting expert Incited Media. Company executives told me late last week that when combined with AEG's venues and live production expertise, the company will be able to offer the most comprehensive event management and broadcasting services. Elsewhere, KIT Digital, the acquisitive digital media technology provider picked up two of its competitors, Nunet, a German company focused on mobile devices, and The FeedRoom, an early player in video publishing/management solutions which has recently been focused on the enterprise. KIT has made a slew of deals recently and it will be interesting to watch how they knit all the pieces together.

Product news around video delivery from VBrick, Limelight and Kaltura - Last but not least, there were 3 noteworthy product announcements yesterday. Enterprise video provider VBrick launched "VEMS" - VBrick Enterprise Media System - a hardware/software system for distributing live and on-demand video throughout the enterprise. VEMS is targeted to companies with highly distributed operations looking to use video as a core part of their internal and external communications practices.

Separate, Limelight unveiled "XD" its updated network platform that emphasizes "Adaptive Intelligence," which I interpret as its implementation of adaptive bit rate (ABR) streaming (see Limelight comment below, my bad) that is becoming increasing popular for optimizing video delivery (Adobe, Apple, Microsoft, Apple, Akamai, Move Networks and others are all active in ABR too). And Kaltura, the open source video delivery company I wrote about here, launched a new offering to support diverse video use cases by educational institutions. Education has vast potential for video, yet I'm not aware of many dedicated services. I expect this will change.

5Min, the video syndication platform company focused on the instructional and lifestyle categories and Scripps Networks, owner of HGTV, Food Network, DIY, Fine Living and Great American Country, are announcing this morning a content and advertising partnership. 5Min, which I described in December, '08 and again in July when it raised $7.5M, is a classic "Syndicated Video Economy" company. Its VideoSeed syndication tool drives relevant video from its content partners to specific pages within its distribution network's web sites. I talked to 5Min CEO/co-founder Ran Harnevo late last week to learn more about the new Scripps deal.

Scripps will be contributing thousands of clips to 5Min for syndication across 5Min's network, which now generates 22 million unique viewers/mo. This is significant because Scripps owns the premier brands in the food and home & garden categories and so for 5Min the content is an important enhancement to its library. For Scripps, choosing to partner with 5Min is a strong endorsement of the syndication model as a driving force for online video.

I've been saying for a while that to succeed in online video, established media companies need to evolve from being "destination-centric" to being "audience-centric." In other words, instead of solely focusing on attracting users to a specific channel or a web site (the traditional approach), it's becoming as important to proliferate content to the Internet's nooks and crannies, to ensure content is available wherever audiences live (niche sites, social media outlets, portals, etc.).

However, I think a key to content providers' succeeding with this model is retaining control over ad inventory that the syndicator creates, to fully leverage their ad sales capabilities. This is another element of the 5Min-Scripps deal. As Ran explained, Scripps will sell ads against its clips that run in the 5Min network and also against all clips in 5Min's food and home & gardening categories. 5Min will collect a revenue share in exchange. Even though 5Min's own ad sales efforts have been strong, Ran reasoned that with Scripps' reach and relationships, this was a better approach to optimizing the value of the ad inventory.

This model underscores how important the concept of scale is in online video advertising. Ad sales professionals understand that it is not just targeted audiences that appeal to prospective advertisers, it's being able to offer sufficient scale to make them matter. Sub-scale media businesses have a hard time attracting major brand advertisers because their audience sizes are not large enough to meaningfully move the brand's numbers. In other words, no matter how targeted the audience, and how effective the ad campaign, the campaign's results likely will not be sizable enough to register a difference. Scale is not just a problem with niche vertical sites. Larger horizontal sites can have the same problem in certain of their content categories. In fact, whenever you visit a site (or a section of a site) and only see Google AdSense ads, that's likely an example of sub-scale.

The scale issue is particularly relevant in online video and the Internet in general because there's so much audience fragmentation. Barriers to entry for starting a web site are incredibly low, and many sites can obtain some initial traffic flow. But generating ads is another story. Brands and their agencies are not set up to deal with a lot of the Internet's minnows. Their media planning focus is on the whales that have at least reasonable targeting and significant reach. In fact, ad networks often rep smaller sites that don't have their own sales teams (as well as some that do), but even they require some minimal size to ensure they can deliver results.

All of this leads to why smart, automated video syndication is so important for the syndicated video economy to work. High-quality video is still expensive to produce so to really succeed online it needs to drive monetizable views wherever it can, not just at a single destination site. Scripps clearly understands this, and I think others are beginning to as well. Syndication platforms like 5Min's, which allow both content providers and would-be distribution points to be easily and effectively matched, are important glue in this process, which I see only becoming more critical going forward.

What do you think? Post a comment now.

Following are 4 news items worth noting from the week of Sept. 26th:

1. Summer '09 was a blockbuster for online video - comScore released U.S. online video viewership data early this week, providing evidence of how big a blockbuster the summer months were for each metric comScore tracks. The 3 metrics that I watch most closely each month showed the healthiest gains vs. April, the last pre-summer month comScore reported. Total videos viewed in August were 25.4 billion, a 51% increase over April's 16.8 billion. The average number of videos watched per viewer was 157, up 41% from April's 111. And the average online video viewer watched 582 minutes (9.7 hours), a 51% increase from April's 385 (6.4 hours).

Also worth noting was YouTube crossing the 10 billion videos viewed in a single month mark for the first time, maintaining a 39.6% share of the market. According to comScore's stats I've collected, YouTube has been in the 39% to 44% market share range since May '08, having increased from 16.2% in Jan '07 when comScore first started reporting. Hulu also notched a winning month. While its unique viewers fell slightly to 38.5M from 40.1M in April, its total video views increased from 396M to 488.2M, with its average viewer watching 12.7 videos for a total of 1 hour and 17 minutes. It will be very interesting to see if September's numbers hold these trends or dip back to pre-summer levels.

2. So this is how to make funny viral branded videos - I was intrigued by a piece in ClickZ this week, "There's a Serious Business Behind Funny Viral Videos" which provided three points of view - from CollegeHumor.com, The Onion and Mekanism (a S.F.-based creative production agency) - about how to make branded content funny and then how to make it go viral. The article points out that a whole new sub-specialty has emerged to service brands looking to get noticed online with their own humorous content.

Humor works so well because the time to hook someone into a video is no more than 2-3 seconds according to Mekanism's Tommy Means. Beyond humor, successful videos most often include stunts or cool special effects or shock value. Once produced the real trick is leveraging the right distribution network to drive viral reach. For example, Means describes a network of 100 influencers with YouTube channels who can make a video stand out. After reading the article you get the impression that there's nothing random about which funny videos get circulated; there's a lot of strategy and discipline involved behind the scenes.

3. Wired magazine's article on Netflix is too optimistic - I've had several people forward me a link to Wired magazine's article, "Netflix Everywhere: Sorry Cable You're History" in which author Daniel Roth makes the case that by Netflix embedding its streaming video software in multiple consumer electronics devices, the company has laid the groundwork for a rash of cable cord-cutting by consumers.

I've been bullish for sometime on Netflix's potential as an "over-the-top" video alternative. But despite all of Netflix's great progress, particularly on the device side, its Achilles' heel remains content selection for its Watch Instantly streaming feature (as an example, my wife and I have repeatedly tried to find appealing recent movies to stream, but still often end up settling for classic, but older movies like "The English Patient").

Roth touches on this conundrum too, but in my opinion takes a far too optimistic point of view about what a deal like the one Netflix did with Starz will do to eventually give Netflix access to Hollywood's biggest and most current hits. The Hollywood windowing system is so rigid and well-protected that I've long-since concluded the only way Netflix is going to crack the system is by being willing to write big checks to Hollywood, a move that Netflix CEO is unlikely to make. The impending launch of TV Everywhere is going to create whole new issues for budding OTT players.

Although I'm a big Netflix fan, and in fact just ordered another Roku, I'm challenged to understand how Netflix is going to solve its content selection dilemma. This is one of the topics we'll discuss at VideoNuze's CTAM Summit breakfast on Oct. 26th in Denver, which includes Roku's VP of Consumer Products Tim Twerdahl.

4. VideoSchmooze is just 1 1/2 weeks away - Time is running out to register for the "VideoSchmooze" Broadband Video Leadership Evening, coming up on Tues, Oct 13th from 6-9pm at the Hudson Theater in NYC. We have an amazing discussion panel I'll be moderating with Dina Kaplan (blip.tv), George Kliavkoff (Hearst), Perkins Miller (NBC Sports) and Matt Strauss (Comcast). We'll be digging into all the hottest broadband and mobile video questions, with plenty of time for audience Q&A.

Following the panel we'll have cocktails and networking with industry colleagues you'll want to meet. Registration is running very strong, with companies like Sprint, Google/YouTube, Cox, MTV, Cox, PBS, NY Times, Morgan Stanley, Hearst, Showtime, Hulu, Telemundo, Cisco, HBO, Motorola and many others all represented. Register now!