VideoNuze Posts

Paid video forecast to surpass free - A Strategy Analytics forecast that got attention this week says that the global paid online video market will be worth $3.8B in 2009, exceeding the global free online video segment which will total $3.5B. I haven't seen the details of the forecast, but I'm very curious what's being included in each of these numbers as both seem way too high to me. The firm forecasts the two segments to grow at comparable rates (37% and 39%), suggesting that their size will remain relatively even. I suspect we're going to be seeing a lot of other research suggesting the paid market is going to be far larger than the ad-supported market as sentiment seems to be shifting toward subscriptions and paid downloads.

Consumer generated video contests remain popular - VideoNuze readers know I've been intrigued for a while now about contests that brands are regularly running which incent consumers to create and submit their own videos. Just this week I read about two more brands jumping on the bandwagon: Levi's and Daffy's retail stores. NewTeeVee had a good write-up on the subject, citing new research from Forrester which reviewed 102 different contests and found the average prize valued at $4,505. I see no end in sight for these campaigns as the YouTube generation realizes it's more lucrative to pour their time into these contests than training their cats to skateboard. Brands too are recognizing the wealth of amateur (read cheap!) talent out there and are moving to harness it.

MySpace has lots of work ahead to become a meaningful entertainment portal - The WSJ ran a piece on Monday based on an interview with Rupert Murdoch in which he was quoted as saying MySpace will be refocused "as an entertainment portal." That may be the winning ticket for MySpace, but I'm not totally convinced. MySpace has been in a downward spiral lately, with a 5% decline in audience over the past year, a 30% headcount reduction and an executive suite housecleaning. While always strong in music, according to comScore, its 48 million video viewers in April '09 were less than half YouTube's 108 million, while its 387 million video views were about 5% of YouTube's 6.8 billion. Clearly MySpace has a very long way to go to give YouTube serious competition. It will be interesting to see if the new management team Murdoch has installed at MySpace can pull off this transition.

MTV Networks released some interesting research yesterday on the optimal way to present advertising in short-form online video. Its "Project Inform" looked at how multiple ad presentations from 3 blue chip advertisers performed and were liked by users across 50 million video streams on MTV.com, ComedyCentral.com, VH1.com, NickJr.com and CMT.com. The research was conducted in partnership with InsightExpress using Panache's video ad platform.

The research found that the most effective ad product was a "lower 1/3 product suite" consisting of a 5 second pre-roll combined with a 10 second lower 1/3 semi-transparent Flash overlay that began about 10 seconds after the video itself began. Effectiveness was defined as brand lift, measured by metrics like unaided awareness, aided awareness and purchase intent. The research also measured consumers' likeability of each ad product. This finding provides support for why overlays seem to keep popping up; for example I now see overlays on most of the video clips I watch on YouTube.

In second place was a conventional 30 second pre-roll which did well on both effectiveness and consumer likeability. That surprises me somewhat because I've believed for a while that 30 seconds is way too long for an ad where the content itself may only be 1-3 minutes in length. Granted it's a subjective judgment, but my personal experience has been that 30 seconds feels like an eternity when I know the content I'm accessing is going to be pretty brief. In fact I've noticed a clear trend toward 15 second pre-rolls accompanying short video clips, which I assumed suggested content providers had thankfully come to a similar conclusion.

In third place in the MTV research was a "sideloader product suite", which included a 5 second pre-roll with a 10 second custom unit that slides out of the right side of the video window 10 seconds after the video itself began (so it sounds like the lower 1/3 product suite except the overlay is on the right instead of the bottom). I've never seen a unit like this, but to the extent that it may block valuable content in the right side of the window I could see users feeling it was intrusive.

There's lots of research underway about different ad formats' effectiveness, and the MTV research adds to the industry's collective knowledge about best practices. There's still a ways to go though as industry participants launch and test new types of ad formats in search of the ultimate ad presentation.

What do you think? Post a comment now.

Next Thursday, July 23rd at 12pm noon ET, I'm going to be moderating a teleseminar for CTAM, titled "Understanding Viewers' Multi-Screen Migration." We'll be digging into the impact of 3 screen (TV, PC, Mobile) user behavior and what the implications are for the cable industry specifically and the media industry in general. CTAM has recently released new proprietary research on 3 screen usage which we'll be using to guide the discussion. With broadband video consumption surging and the iPhone sparking significant mobile video interest, the teleseminar is very timely.

Panelists include Amy Banse, President of Comcast Interactive Media and SVP, Comcast Corporation, Dallas Clement, SVP, Strategy and Product Management, Cox Communications, David Evans, SVP, Broadband, Rainbow Media and Perkins Miller, SVP, Digital Media, NBC Universal Sports & Olympics.

The teleseminar follows a unique format; I'll be moderating from Fuse TV's studio in NYC in front of a live audience and the session will be uplinked via satellite for simultaneous viewing at over 35 CTAM chapter locations around the U.S. and Canada. Questions will be taken from both the studio audience and the remote viewers. It promises to be a fascinating discussion.

Click here for more information and registration or email Lisa Jackson at CTAM (lisa@ctam.com)

Amid the chatter over the past few days about Amazon possibly buying Netflix, Kara Swisher at All Things Digital today instead suggested that Microsoft would make a better Netflix acquirer. Her sentiments echoed my Dec '08 prediction that Microsoft would acquire Netflix at some point in '09. It was admittedly a "long ball" call on my part (especially since I had zero inside dope), but one which actually makes even more sense 7 months later.

Why? Because Comcast and the cable industry's aggressive new TV Everywhere/On Demand Online initiatives make Netflix more valuable than ever for any company looking to offer a subscription-based, broadband-delivered video service. Outside the cable/satellite/telco industries themselves, Netflix - with its 10 million+ current DVD-by-mail subscribers - is the only serious subscription video provider. Its recent stellar performance shows the durability of its model even in the face of the ongoing recession. And it continues to build out its streaming service with various device partners (including notably Xbox 360).

If Comcast succeeds with On Demand Online (and since the technical trial hasn't even begun yet, that's still a big "if"), and other cable operators quickly follow suit, the broadband video industry is poised for a fundamental shift away from ad-only business models to hybrid models where subscriptions are key. Any current or aspiring premium video provider that does not have an established subscription approach is going to be disadvantaged in its access to high-quality programming and ongoing product development resources. CBS's addition to Comcast's trial shows that even broadcasters are beginning to position themselves in the subscription mix.

My full rationale for why Netflix is so appealing for Microsoft is laid out in the Dec post, so I won't restate it here. Of course nobody outside the companies involved knows if any of the M&A chatter is for real. But if it is, my bet is still that Microsoft is the acquirer to watch, not Amazon. I suspect we'll see other analysts making a similar case if things heat up.

What do you think? Post a comment now.

Another day, another flurry of announcements from Comcast with news of more networks participating in its On Demand Online technical trial. Newly on board are CBS (also the first broadcast network to participate) and 17 more cable networks such as A&E, AMC, BBC America, Food Network, History Channel, Sundance and others. Together with those already announced, there are now over 20 networks in the trial.

The cable networks' interest isn't surprising. I've been saying for a while that On Demand Online will be a real boon to them, providing a secure, scalable on-ramp to online distribution, new ad impressions and most important, significant enhanced value to their viewers. Still, despite all of Comcast's progress, most of the big cable network groups (e.g. NBCU, Fox, Disney, Viacom, Discovery) have not yet publicly signed on. I think that's just a matter of time.

There's no question Comcast is building real industry momentum for On Demand Online. But given the trial hasn't even begun yet, all of these announcements are really raising the visibility of the trial - and of course the pressure to make sure its "authentication" processes work as intended. No doubt each of these announcements is creating a lot of sweaty palms among Comcast's technical staff - the people who are responsible for proving authentication works. With all the PR buildup, if for some reason all does not go according to plan, Comcast will have lots of people looking for answers.

What do you think? Post a comment now.

I spoke to Roxanne Austin this afternoon, whom Move Networks announced as its new president/CEO earlier today. Roxanne is a former president/COO of DirecTV, partner at Deloitte & Touche, and current board member of Ericsson, Target, Abbott Laboratories and Teledyne. Since 2004 she's been running her own investment and consulting firm Austin Investment Advisors. Move's president/CEO slot has been vacant since the spring when John Edwards was shifted to Executive Chairman.

Roxanne believes Move's distinct competitive advantage is that it is the only provider of end-to-end solutions for high-quality live, streaming and VOD video delivery. Roxanne sees the timing as being right for Move because the industry has evolved to an understanding that broadband video must have both paid and advertising-based models. In addition, it must be able to offer users traditional linear experiences as well as VOD, all in HD.

My recent post on Move's repositioning detailed the company's new focus on supporting video service providers (e.g. cable, satellite, telco, ISPs, etc.), however Roxanne equally weights content providers (its traditional customer base). As Roxanne put it, "we want to follow the rights." In other words, whoever has the ability to distribute premium video content - either the creator or the authorized distributor - is in Move's sights.

Roxanne wants to see Move's adaptive bit rate streaming technology remain best-of-breed, even as new competition from Microsoft and Adobe heats up. But I think she correctly emphasizes that the company's total solution - which now includes Inuk's "virtual set-top box" software - is how it will distinguish itself.

As all industry participants feel the pinch of the recession and the need to demonstrate viable broadband business models, better video quality alone is not sufficient to succeed. Move is betting that by supporting traditional linear, paid models, along with new VOD (and sometimes ad-only)-based models, it will be the technology partner of choice.

There are a lot of moving pieces here, but Roxanne's industry relationships and know-how surely enhance Move's odds of eventual success.

What do you think? Post a comment now.

The list of cable networks participating in Comcast's upcoming technical trial of On Demand Online continues to grow. This afternoon HBO and Cinemax announced that initially they will provide 750 hours a month of programming, which will expand over time.

Full length episodes of True Blood, Hung, Entourage, etc, along with recent movies such as Transformers, The Dark Knight, Atonement and classics like Jurassic Park, Speed and Rosemary's Baby will all be available. Some programs will be available in HD and immediately after they're shown on the linear networks.

HBO/Cinemax follows last week's announcement that Starz is on board with the trial, which itself followed the launch announcement that Time Warner networks TNT and TBS were participating. The list will no doubt grow further in the coming weeks.

I've been bullish on Comcast's On Demand Online initiative from the outset, and HBO/Cinemax's perfectly illustrates the power of the model. As the most popular premium TV network, HBO would confer a lot of additional value to its subscribers by making its programs conveniently available online. But to date the only real option for doing so has been to sell them on a per program download basis through outlets like iTunes. The problem is that HBO subscribers end up paying twice for the same content.

On Demand Online gives HBO a mechanism, finally, to give its subscribers online access without additional fees. This is accomplished through Comcast's "authentication," which queries its database to enable online viewing privileges. The upcoming technical trial is intended to prove that the authentication process actually works. It must, as the stakes are quite high when premium networks like HBO are in the mix. The last thing they want is to have unauthorized broadband users watching their coveted shows instead of subscribing to the monthly service.

All of the details of On Demand Online are not yet understood, but I continue to believe that if it's executed properly, it will be a game-changer for the cable and broadband industries.

I'm back in the saddle after an amazing 10 day trip to Israel with my family. On the assumption that I wasn't the only one who's been out of the office around the recent July 4th holiday, I've collected a batch of industry news links below so you can quickly get caught up (caveat, I'm sure I've missed some). Daily publication of VideoNuze begins again today.

Hulu plans September bow in U.K.

Rise of Web Video, Beyond 2-Minute Clips

Update on New Channels

ABC Content Now on Hulu

Nielsen Online: Kids Flocking to the Web

Amid Upfronts, Brands Experiment Online

Clippz Launches Mobile Channel for White House Videos

Prepare Yourself for iPod Video

Study: Web Video "Protail" As Entertaining As TV

In-Stat: 15% of Video Downloads are Legal

Kazaa still kicking, bringing HD video to the Pre?

Office Depot's Circuitous Route: Takes "Circular" Online, Launches "Specials" on Hulu

Upload Videos From Your iPhone to Facebook Right Now with VideoUp

Some Claims in YouTube lawsuit dismissed

Concurrent, Clearleap Team on VOD, Advanced Ads

Generating CG Video Submissions

MJ Funeral Drives Live Video Views Online

Qik Raises $5.5 Million

Why Hulu Succeeded as Other Video Sites Failed

YouTube's Pitch to Hollywood

Invodo Secures Series B Funding

Comcast, USOC Eye Dedicated Olympic Service in 2010

Consumer Groups Push FTC For Broader Broadband Oversight

Crackle to Roll Out "Peacock" Promotion

Earlier Tests Hot Trend with "Kideos" Launch

Mobile entertainment seeking players, payment

Netflix Streams Into Sony Bravia HDTVs

Akamai Announces First Quarter 2009 State of the Internet Report

Starz to Join Comcast's On-Demand Online Test

For ManiaTV, a Second Attempt to be the Next Viacom

Feeling Tweety in "Web Side Story"

Most Online Videos Found Via Blogs, Industry Report

Cox to Turn "MyPrimeTime" Dial to 100

How to Start a Company (and Kiss Like Angelina)