VideoNuze Posts

1Cast, an aggregator of short-form news-oriented video clips from premium content providers, is announcing its commercial launch today, joining others in the personalized video news category like Voxant, ClipSyndicate, RedLasso (for local news), plus other online news aggregators. Following its year-long private beta test, 1Cast is also announcing today a redesigned UI, distribution partnerships with boxee and Clearwire, the WiMax wireless provider, and a new entertainment category anchored by E! Entertainment and Style. Yesterday I caught up with Anthony Bontrager, 1Cast's CEO to learn more.

Anthony explained that 1Cast users are now consuming 3.5 million video clips/mo, contributing to average session lengths of 14 minutes on the desktop and 36 minutes on mobile devices. With average clips running 2-3 minutes apiece, that means users are watching a series of clips back-to-back when checking the site. 1Cast gives users the ability to set up their own "casts" selecting from preset categories and networks. The casts are automatically updated each time new content is added by 1Cast. I've played around with the site and have found it very straightforward to find and organize content. My only knock is that sometimes content is not that current. For example, even though the Red Sox played until Oct 11th when they lost the ALDS to the Angels, a search for "Boston Red Sox" on 1Cast listed the first video result from Aug 26th.

1Cast obtains clips from news providers like AFP, Barron's, BBC, MarketWatch and Reuters. For these providers 1Cast represents additional distribution and revenue. 1Cast is completely ad-supported, and Anthony said that it is selling 80% of its own ads, with YuMe selling the rest. CPMs are in the $25 range. Ads are primarily 15 second mid-rolls and post-rolls, with bumpers at the beginning of sessions. 1cast revenue shares with its content partners, but Anthony wouldn't disclose what percentage. He did point to a recent 6 figure campaign Infinity ran on the site as a major validation of 1Cast's model.

1Cast and the other personalized video aggregators play well to the short-form consumption behavior of online video users. This is even more so the case with mobile consumption. The distribution deals with boxee and Clearwire will help 1Cast gain more visibility and usage.

As I said when I first covered 1Cast in Aug '08, I think personalized video news is a very compelling concept, but my concern with 1Cast and the others specializing in this area is whether they can build sufficiently large audiences and scale their businesses.

Surely one of the most enduring questions I and others who watch the online video industry are asked (and in fact often ask ourselves) is: How can video management and publishing platform companies continue to launch, even as the space already seems so crowded?

Personally I've been hearing this question for at least 6 years, going back to when I consulted with Maven Networks, whose acquisition by Yahoo was one of the few industry exits (and likely the best from an investor ROI perspective, regardless of the fact that it was shut down little more than a year later as part of Yahoo's retrenching. With yesterday's launch of Episodic and the recent launch of Unicorn Media, plus last week's $10M Series C round by Ooyala, it's timely to once again try to make sense of all the activity in the platform space.

The best explanation I offer traces from my Econ 101 class: supply is expanding to meet demand. Over the past 10 years, there has been an enormous surge of interest in publishing online video by an incredible diversity of content providers. Importantly, interest by content providers has intensified in the last few years. I can vividly recall 2003 and 2004, trying to explain to leading content providers why online video was an important initiative to pursue. Still, their projects were often experimental and non-revenue producing. Contrast this with today, where every media company on earth now recognizes online video as a strategic priority.

But even as online video's prioritization has grown, many media companies don't have all the strategic technology building blocks in place. In fact, many continue to use home-brewed technology developed a while back. The range of video features needed continues to grow and evolve rapidly. Consider how requirements have expanded recently: live, as well as on-demand video; long-form programs as well as clips; paid, as well as ad-supported business models; mobile, as well broadband distribution; multiple bit rate, as well as single stream encoding; in-depth analytics as well as top-line metrics; widespread syndication as well as destination-site publishing; off-site, as well as on-site ad management. The list goes on and on.

As media company interest has grown, technology executives and investors have taken note. Venture capital firms continue to see online video as a high-growth industry (even if the revenue model for content providers is still developing, as are many of the platforms' own revenue models), with significant macro trends (e.g. changing consumer behavior, proliferation of devices, improved video quality, etc.) as fueling customer interest. Another important factor for platforms is rapidly declining development costs. As Noam Lovinsky, CEO of Episodic told me last week, open source and other development tools has made it cheaper than ever to enter the market with a solid product. With ever lower capital needs, a new video platform entrant that can grab its fair share of the market has the potential to produce an attractive ROI.

Of course all the noise in the platform space means media executives need to do their homework more rigorously than ever. I'm a strong believer that the only way to really understand how a video platform works, how well-supported it is and how well-matched it is to the content provider's needs is to vigorously test drive it. Hands-on use reveals how comprehensive a platform really is, or how comfortable its work flow is, or how well its APIs work. While I get a lot of exposure to the various platforms through the demos I experience and the questions I ask, I'll readily concede this is not the same as actually living with a platform day-in and day-out.

Another complicating factor is that while there are some companies purely focused on video management and publishing, there are many others who offer some of these features, while positioning themselves in adjacent or larger markets. When I add these companies in, then the list of participants that most often hits my radar would include thePlatform, Brightcove, Ooyala, Twistage, Digitalsmiths, Delve, KickApps, VMIX, Grab Networks, ExtendMedia, Cisco EOS, Irdeto, KIT Digital, Kaltura, blip.tv, Magnify.net, Fliqz, Gotuit, Move Networks, Multicast Media, WorldNow, Kyte, Endavo, Joost, Unicorn Media and Episodic (apologies to anyone I forgot). Again though, this list combines apples and oranges; some of these companies are direct competitors, some are partners with each other, some have a degree of overlap and so on.

There's a long list of platforms to choose from, yet I suspect the list will only get longer as online and mobile video continues to grow and mature. At the end of the day, who survives and succeeds will depend on having the best products, pricing the most attractively and actually winning profitable business.

What do you think? Post a comment now.

Please join me in Denver next week for 2 great discussion panels at the CTAM Summit.

First, VideoNuze will be hosting a breakfast on Monday, Oct. 26th from 7:30am-8:45am, where I'll be moderating a panel titled, "How Cable Succeeds in the Broadband Video Era." Panelists include:

• Ian Blaine - CEO, thePlatform
• Rebecca Glashow - SVP, Digital Media Distribution, Discovery Communications
• Bruce Leichtman - President & Principal Analyst, Leichtman Research Group, Inc.
• Chuck Seiber - VP, Marketing, Roku, Inc.

We'll be doing a deep dive on how the cable TV industry is navigating the shift to broadband video consumption, the key opportunities and challenges the industry faces, competitors to watch and important new technologies. If you're trying to understand the industry's broadband priorities or are trying to figure out how to partner with cable operators or programmers, this session is for you.

The breakfast's lead sponsor is thePlatform and supporting sponsors include ActiveVideo Networks, Akamai Technologies, ExtendMedia, Goodmail, KickApps and October Strategies.

Click here for more information about the VideoNuze breakfast and to register

Then on Tuesday, Oct. 27th, I'll be moderating the closing general session of the CTAM Summit itself from 1:00pm-2:15pm. Our topic is "Multi-Screen Access: Challenges & Opportunities." Panelists include:

• Paul Bascobert - Chief Marketing Officer, Dow Jones & Company
• Matt Bond - EVP, Content Acquisition, Comcast
• Andy Heller - Vice Chairman, Turner Broadcasting System, Inc.
• Jason Kilar - CEO, Hulu
• David Preschlack - EVP, Disney and ESPN Networks Affiliate U.S. Sales and Marketing
• Peter Stern - EVP & Chief Strategy Officer, Time Warner Cable

In this panel we'll be focus on exploring the opportunities and challenges each panelist's company faces working across screens, with a particular emphasis on the customer's experience. We'll examine how to create new value that meets consumers' shifting expectations, build successful business models (free, paid, hybrid), leverage new technologies, enhance existing revenue streams and deliver content in new ways. Each of these companies is a leader in their own right and the discussion promises to yield valuable lessons about how to succeed working across 3 screens.

Click here for more information about the CTAM Summit and to register

I look forward to seeing you in Denver!

Following are 4 items worth noting from the week of Oct 12th week:

1. Bell Canada is first to offer "TV Everywhere" type service - While U.S. operators have been busy with their TV Everywhere trials, Bell Canada, which has 1.8 million linear video subscribers, has jumped into the lead, announcing this week the launch of "TMN Online." The service, available through the Bell TV Online portal, allows subscribers to The Movie Network premium channel to gain online access to about 130 hours of content.

I spoke briefly with Peter Wilcox, Bell TV's director of product strategy, who explained that ExtendMedia's OpenCASE is being used for content management, in conjunction with Microsoft's Silverlight and PlayReady DRM. Users login with their Bell user name and password and are authenticated against the billing database as valid TMN subs. Only 1 simultaneous log-in is allowed, and Bell is also geo-blocking, so for example, there's no accessing TMN Online from outside Canada. The launch is part of what Bell calls "TV Anywhere" - a broader context for eventual distribution to its mobile subscribers, and further content being added. The deployment is the first milestone in what promises to be a busy 2010 on the TV Everywhere news front.

2. BlackArrow launches ad insertion for Comcast video-on-demand - BlackArrow, the multiplatform ad technology provider, announced its first customer deployment this week, with Comcast's Jacksonville, FL operation. I talked to company CEO Dean Denhart and President Nick Troiano, who gave me an update on how the company dynamically inserts ads in long-form premium content across TV, broadband and mobile. As I wrote 2 years ago, BlackArrow has bitten off the hardest challenge first: working with cable operators to get its system into their headends/data centers. Dean and Nick believe that if the company can succeed in this goal then it will have created formidable differentiation that can be leveraged for the other two platforms.

The key risk is that cable operators are famous for grinding down promising technology startups with their endless testing and brutal negotiating tactics (I say this from personal experience with a promising technology startup earlier this decade, Narad Networks). Robust VOD ad insertion is plenty strategic for the industry, but years since cable operators launched free VOD, the fact that it still isn't widely deployed is a telling sign, particularly while ad insertion technology in broadband is now fully mature. Comcast's role as an investor in BlackArrow should help its odds of success. I'm rooting for BlackArrow; their holistic approach to multiplatform advertising is right on. Whether they have the juice to fully succeed remains the big question.

3. Political battle over net neutrality is heating up - This week brought fresh complaints from Republican Senators who are coalescing to fend off new FCC chairman Julius Genachowski's plan to introduce net neutrality regulations for both broadband ISPs and wireless carriers. B&C reported that 18 Republican senators wrote to Mr. Genachowski concerned that the FCC's process is "outcome driven" and unsupported by data.

I rarely find my views aligning with Republicans, but net neutrality is an exception. As I wrote last month in "Why the FCC's Net Neutrality Plans Should Go Nowhere," Mr. Genachowski's plan is deeply flawed and completely illogical. The core premise of the new regulations - that they're needed to ensure continued broadband investment and innovation - misses the reality that the market is already functioning well. As one example, investment in broadband-related technology is continuing apace. By my calculations, over $180 million was raised in Q3 '09 by video-related companies whose very viability depends on open broadband and wireless networks. The sector's potential is amplified by the fact that venture capital fundraising itself is at its lowest level since 2003, with new capital raised by the industry in 2009 down 58% from 2008. Despite the VC industry's troubles, it continues to bet big on video. Why do we need new Internet regulations to sustain innovation?

4. Have you seen the 9 year-old hockey player's trick goal? On a lighter note, you have to love the serendipity of online video sharing. For example, though I don't consider myself a hockey fan, when a friend sent me this video clip of a 9 year-old hockey player pulling off this incredible trick shot, I was reminded just how much fun online video is and promptly passed the clip on to my circle (it's also now all over YouTube). See for yourself, it's just amazing. And nothing fake about it either.

Enjoy the weekend!

Daisy Whitney and I are pleased to present the 36th edition of the VideoNuze Report podcast, for October 16, 2009.

This week Daisy and I first discuss my post from yesterday, "Can Advertising Alone Support Premium Long-Form Online Video?" which picks up on the in-depth discussion panelists had at this week's VideoSchmooze event in NYC. As I said in the post, this is a crucial issue, particularly for broadcast TV networks who have aggressively pursued online distribution of their primetime programs, but have yet to demonstrate they can generate the same revenue per program per viewer online as they do on-air. In the podcast, Daisy explains why she thinks that something has to break, and that a "survival of the fittest," dynamic looms for broadcast networks.

Moving on, Daisy then discusses her New Media Minute episode this week, in which she describes the success that Univision, the Spanish-language network, is having with online-only shows. Univision is so bullish on the format that Kevin Conroy, a company executive, recently told Daisy that he is actively soliciting pitches. Details on the growth in Internet usage among the Hispanic audience underscore why Univision is hitting its stride online.

Click here to listen to the podcast (12 minutes, 44 seconds)

Click here for previous podcasts

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

This was the question I started our VideoSchmooze panel discussion off with this past Tuesday night. Yet 20 minutes of debate among our group of panelists yielded no real answers. This lack of consensus suggests an upcoming period of high anxiety in the industry: for even as viewers shift to online consumption, it is far from clear whether advertising alone will be sufficient to support the creative infrastructure needed to produce premium long-form video.

I continue to believe that broadcast TV networks are the companies most at risk from the unknowns around online video advertising. Lacking the additional revenue stream from distributors that their cable TV network brethren enjoy, broadcast networks must figure out how to make online video advertising work.

However, as I originally wrote over a year ago, and then again here, the fundamental problem the broadcast networks face with their current online implementations is that ad revenue per viewer per program is a fraction of what it is on-air (likely less than 25% by my calculations). In my mind, getting the two into balance is the minimum requirement for the networks to keep their top lines even with where they are today, assuming online viewership substitutes for on-air, as I expect it will over time.

As our panel explained though, the constraints to achieving this parity are significant. First is the issue of just how many ads can be inserted into an online episode. Today sites like Hulu, with their very light ad loads bias significantly in favor of the consumer experience rather than revenue optimization (for more on this see Chuck Salter's fine new article, "Can Hulu Save Traditional TV?" in this month's Fast Company). Just how many ads can be forced into an online episode given the DVR ad-skipping generation's expectations is an unknown. For sure it is fewer than the 16-18 minutes in a traditional one hour on-air program.

So if the quantity of ads must be lower, then each one needs to bring a higher price than their on-air counterparts. The traditional "CPM" metric (the cost per thousand viewers reached) is well-entrenched among ad agency media buyers. On the VideoSchmooze panel, George Kliavkoff, now a Hearst executive, but formerly the chief digital officer at NBCU and the first CEO of Hulu, lamented the CPM framework for online video advertising. He threw down the gauntlet, saying essentially that the whole broadband video industry is in for big trouble if it doesn't break out of selling ads on a CPM basis.

George's point was that it's foolish for a new medium like broadband, which offers content providers new technology-based ways to create value for advertisers, to allow itself to get locked in to the monetization techniques from the prior TV medium. That rationale is compelling enough, but for me another strong reason to get beyond CPM pricing is that not doing so means that media buyers will always be presented with a fundamental question: is it worth paying a 25%/50%/100% (take your pick) premium to reach online vs. on-air eyeballs watching the exact same show? This raises the bar for online ads; the research must show demonstrably higher engagement, recall, purchase intent, etc. to justify the premium. All of this may happen due to online's improved targeting, but even if it does, it won't happen overnight and the upside is likely not that large anyway.

If CPM-based pricing is challenged, then what's better? On the panel we discussed examples of interactive ads that can be quantifiably valued, such as by generating a specific lead or purchase for the advertiser, along with other formats. Of course these ideas have been floating around the TV world for years, but have gained little traction (although it is worth noting that in online, paid search marketing is a pure performance ad format that has worked spectacularly well). As several attendees remarked to me afterward though, these new ad formats face the additional challenge of needing to conform to ad agencies' buying processes, which are research-driven, dominated by younger staffers and not well-suited to understanding innovative ad formats.

Add it all up and significant questions remain about whether advertising alone is going to be able to support premium long-form online video and the creative infrastructure that produces it. Just as newspapers are struggling today to support traditional newsroom expenses on skimpier online ad revenues, broadcast networks accustomed to spending $2 million or more for a single episode of a scripted program could face a similar day of reckoning. This is the core issue, made all the more urgent by viewers' relentless shift to online consumption. Only time will tell whether there are any satisfactory answers to be had here.

What do you think? Post a comment now.

Thanks to everyone who came out for VideoSchmooze last night. We had about 250 people in attendance and thousands more watching live via the NATPE-sponsored Stickam feed (replay available soon). I asked Steve Donohue, a veteran cable TV journalist and friend to cover the panel discussion for VideoNuze while I was moderating. His edited coverage is below; more commentary is available on Twitter, search hashtag #VS09.

Media Executives Debate Online Video Trends at VideoSchmooze

by Steve Donohue

Media companies won't succeed in distributing programming online through sites like Hulu and others unless content providers and advertisers develop new ad formats and better ways to measure video that is distributed on multiple platforms, executives on the VideoSchmooze panel said Tuesday night.

Hulu and the sites operated by major broadcast TV networks today rely mostly on distributing 15- and 30-second ad units, a tactic criticized by Hearst Entertainment EVP George Kliavkoff, formerly Chief Digital Officer at NBCU and the first CEO of Hulu.

"If that (traditional TV advertising) is the conversation, then we've failed as an industry. I think the conversation should be what's new and engaging, taking advantage of the technology to deliver ads that are not just repurposed 15- and 30-second spots, " Kliavkoff said, reiterating a theme he espoused throughout the night that more needs to be done, and faster, to improve the online video ad model.

But Matt Strauss, Comcast's SVP, New Media said the industry shouldn't abandon traditional advertising. "We need to embrace the fact that there is a model right now on television that we all live with," Strauss said, adding that he hopes Nielsen Media Research will be able to incorporate online viewing into its C3 ratings reports, which measure viewing on TV and through digital video recorders.

The urgency of going beyond the CPM-based model for online video ads was highlighted by panel moderator Will Richmond from VideoNuze, who noted that "today's sites distributing full-length TV shows will not succeed in the long-term by inserting one-fifth the number of ads as done on-air, even if these ads can command a 20-25% price premium."

Perkins Miller, SVP of Digital Media at NBCU Sports explained that his company's live streaming of Sunday Night Football (now in its second season), which carry full ad loads, have been a big a success, saying "users are watching twice as much content because they're engaged." It is important to note that with built-in time-outs to support ad insertion, live sports are in a unique position to replicate their on-air models online.

Still, blip.tv co-founder Dina Kaplan reported that in the last 2-3 years, the online video ad-supported model for entertainment programming has made great strides. Kaplan revealed that blip has recently inked 8 deals with major advertisers, indicating that auto companies, packaged goods firms and other advertisers are moving budgets to online video ads. On the flip side, Kaplan conceded that generating unique creative for online ads will be a key challenge, saying, "with staff reductions at agencies....it's going to be a bigger problem, not a smaller problem, in 2010."

Another area discussed in detail during the panel was TV Everywhere, an initiative to deliver cable and other programming online to subscribers of traditional multichannel video services. Comcast's Strauss said that with 20-25 cable networks involved in the company's TV Everywhere trial, the company has been running fast to keep up with networks' interest.

Richmond mentioned however, that Hulu's 3 media owners, NBCU, Disney and Fox (as well as Viacom), which together constitute 4 of the 5 biggest cable network owners, have not yet publicly committed to distributing their shows via TV Everywhere. Strauss indicated that these companies are taking a "thoughtful" approach to their distribution strategy, and expressed confidence that while all networks may not be represented when Comcast begins rolling out TV Everywhere commercially later this year, the line-up will become more complete over time. "All programmers we've talked to are in agreement that making content more accessible to viewers is important," Strauss added, while also acknowledging that protecting online-distributed content from theft is a key focus of the TV Everywhere initiative.

Lastly, panelists touched on the proliferation of various viewing devices. In particular, Miller praised the significant popularity of the iPhone as an example of how mobile video is becoming a strong priority for NBCU, though still well behind broadband distribution. He also speculated about what's ahead for e-book readers like Amazon's Kindle, when additional features like color screens and video support are offered. To put an exclamation mark on shifting viewing patterns, especially among younger audiences, Strauss capped the discussion off by relating his experience of coming home recently to find his 4 children under the age of 7 huddled around his iPhone watching a show while his 50 inch plasma TV stood just feet away, silent and dark.

Tonight is VideoNuze's "VideoSchmooze" Broadband Video Leadership Evening, from 6-9pm in NYC.

Over 240 industry executives are registered to attend, from many different technology and media companies.

Our panel (which I'll moderate), "Realizing Broadband Video's Potential" features an amazing group of industry executives:

• Dina Kaplan - Co-founder, blip.tv
• George Kliavkoff - EVP & Deputy Group Head, Hearst Entertainment & Syndication (and formerly Chief Digital Officer, NBCU and first CEO of Hulu)
• Perkins Miller - SVP, Digital Media and GM, Universal Sports, NBCU Sports & Olympics
• Matt Strauss - SVP, New Media, Comcast

Click here to learn more and register now.

Following the panel, we'll have networking and cocktails from 7:45-9:00pm. It will be a great opportunity to meet the panelists and industry colleagues.

VideoSchmooze will be held at the Hudson Theater, a beautifully renovated turn-of-the-century venue on West 44th Street just off Times Square. NATPE, VideoNuze's partner since launch, is teaming up with VideoNuze for the event. And I'm extremely grateful to lead sponsor Microsoft Silverlight and supporting sponsors Akamai Technologies, Digitalsmiths, FAST (a Microsoft subsidiary), FreeWheel, Horn Group, Kyte and mPoint for making the evening possible.