VideoNuze Posts

Below is the 19th edition of the VideoNuze Report podcast, for June 5, 2009.

Daisy was in New York this week for the "NewFronts," a day-long meeting that Digitas sponsored, mainly for independent online video creators and media buyers/agencies. The goals were to educate the market and fuel advertiser interest. Daisy reports that despite the mixed news coming out of the independent video world this year, it was an upbeat gathering.

I provide additional detail on Microsoft's announcement this year of new entertainment-oriented features for XBox 360. The gaming console continues to take on more of a convergence positioning, with new instant-on 1080p video, live streams, Zune integration, etc. With an installed base of 30 million users, Microsoft has a prime opportunity to drive convergence and get a video foothold. The new Xbox 360 features coincide with last week's Hulu Desktop announcement and this week's YouTube XL unveiling.

Click here to listen to the podcast (14 minutes, 47 seconds)

Click here for previous podcasts

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

NBC and MSNBC nicely executed their "Inside the Obama White House" minisite, built to accompany this week's exclusive 2 night special, which itself boosted NBC's ratings. The minisite offers all the broadcast programming, chunked into logical parts. There's also web-only video, searchable clips and playlist functionality. The minisite presents the video in a very digestible, clear manner, so if you forgot to TiVo the special like me, you don't miss anything.

When you begin playing the video there's a pre-roll for Applebee's, which appears to be the primary sponsor, though Sprint has some banners too. Mid-rolls run after most segments and then the next programming segment resumes. Applebee's awareness is very strong, though I think they could have benefited from varied creative (I certainly won't forget its Steakburgers and Carside service)

YouTube's announcement this week of "YouTube XL," an optimized version of its site meant for viewing on larger screens caught my attention as it appeared to be another building block in broadband-to-the-TV convergence. I spoke with Chris Dale, a YouTube spokesman to learn more.

On the other hand, long-term, XL is a limited-appeal offering, because it reflects Google's browser-centric worldview. As Chris explained, from CEO Eric Schmidt on down, there's a conviction that the "browser as the platform" is going to dominate entertainment and information distribution. This is certainly the way the online world works today, as practically all of broadband-delivered video is consumed within a browser context. (In fact, this is one of the things that made last week's Hulu Desktop announcement so noteworthy, a large aggregator introducing an app that breaks the browser-only paradigm.)

The problem is that historically at least, the non-online, TV world hasn't been browser-based. Instead, various set top boxes (whether from cable/satellite/telco or from newer convergence players) rely on their own applications to present and manage video. Given this disconnect, new convergence devices and services will instead need to rely on YouTube APIs if they want to access YouTube's vast trove of content, unless they start building in browsers. This is how AppleTV, Sony Bravia, TiVo and others have worked with YouTube in the past. My concern is how much investment attention will convergence-oriented APIs be getting from YouTube when the company's emphasis is clearly on the browser.

Back in March '08, I wrote, "YouTube: Over-the-Top's Best Friend" in which I asserted that for emerging convergence devices and video service providers, YouTube would be the perfect partner. It has the best-known video brand, the largest catalog and the best promotional reach. I still believe that. YouTube could be a formidable disruptive force in over the top if it had a strategy to do so. With its browser focus though, it's hard to see that happening.

In these tough economic times, I don't blame YouTube, or others, from prioritizing. However, my sense is that by taking a more passive approach to convergence, YouTube is opening the door a little wider for others like Netflix who are more aggressively pursuing convergence opportunities, as well as incumbents like Comcast and Time Warner Cable who are just getting going on bridging broadband video to their set-top boxes. As the clear online video market share leader, YouTube has a pretty golden opportunity to aggressively chart new ground and cause likely market disruption. That it's choosing not to means others have a little less pressure on them.

What do you think? Post a comment now.

I was intrigued by news yesterday from Tremor Media, the ad network and management company, of their rollout of a new ad format called vChoice. Advertising continues to be the primary business model for premium online video, yet there's wide consensus that pre-roll ads, the most popular ad format today, leaves a lot to be desired. I spoke to Tremor's CEO, Jason Glickman to learn more about vChoice, and its benefits vs. pre-roll.

By shortening the upfront message, and presenting more options to the user, the goal is to deepen engagement. vChoice is geared to advertisers who either already have videos that could be logically clustered and offered to users (e.g. a car model which multiple promo videos) or are interested in creating new stories for non-linear consumption (like the example below from Warner Bros). Either way, as Jason notes, vChoice offers much greater creative freedom and engagement potential than a typical 15 or 30 second passive spot.

Tremor just finished a beta of vChoice with Microsoft, P&G, Ubisoft and Warner Bros. The results are impressive: 200% lift in engagement, as defined by multiple metrics, and a click-through rate of 3-6% vs. sub-1% for typical pre-rolls. Tremor's also using Quantcast data to provide demographic profiling of these engaged users. The early results, plus the creative potential, is what Jason says has advertisers most excited.

Jason also added that there are two keys to making vChoice possible: the company's Acudeo management platform, which allows multiple in-stream ads to run within a single unit, while also delivering full analytics, and the scale represented by 900+ sites in Tremor's publisher network. Importantly, there's no extra charge for additional views in a vChoice experience. That means for users who watch multiple videos, the advertiser's cost/impression keeps declining.

Jason doesn't see vChoice obsoleting pre-rolls, but rather offering more value in the online video medium. vChoice's success depends on whether users will be sufficiently enticed by the enhanced choices the advertiser offers to divert from their original viewing intentions. Key to driving that behavior is getting media buyers and creatives to understand the new value of these units and to then to invest in them. As this happens, the full potential of online video advertising will begin to be realized.

What do you think? Post a comment now.

The folks at Microsoft are determined to make Xbox 360 a winner in the free-for-all to bridge broadband-delivered video to the TV. Yesterday at E3, Microsoft announced a number of enhancements for Xbox and Xbox LIVE (the console's gaming and content marketplace), further blurring the lines between gaming and entertainment, and raising the stakes for other single-purpose convergence boxes. The new features include:

• Instant-on streaming of 1080p HD video with 5.1 channel surround sound using proprietary Microsoft adaptive bit rate streaming technology
• Smooth fast-forward and rewind, comparable to DVD
• "Movie Parties" - avatar-based shared/social viewing in virtual theaters
• Live on-demand BSKyB through Xbox in UK and Ireland
• Rebranding of Xbox LIVE Video Marketplace as Zune Video Marketplace, which joins the 2 brands in anticipation of the upcoming launch of Zune HD; additional content planned.
• Expansion to 10 new regions, bringing the total number of countries able to access TV shows and movies through XBox to 18
• Facebook, Twitter and Last.fm integrations

Of course, Xbox 360's key advantage in moving into entertainment is that it has a huge installed base of early-adopter gamers to leverage; in fast Microsoft said last week that it has sold over 30M Xbox 360 consoles to date and that there are over 20M active members in the Xbox LIVE community (not only a subset are Gold members able to access some of the entertainment offerings like Netflix streaming). Little has been disclosed about Netflix Watch Instantly consumption since February when the companies said that 1M LIVE Gold members had consumed 1.5B minutes of video in the first 3 months of availability.

Microsoft isn't forgetting that Xbox is still primarily a gaming platform; yesterday it rolled out a slew of games for Xbox, including "The Beatles: Rock Band" with Ringo and Paul making personal appearances. Xbox also unveiled its "Project Natal" a controller-less, 3D sensor that detects a gameplayer's movements. All of these will continue to drive console unit sales.

No doubt there are plenty of other things the Xbox 360 team has planned to make the console a highly attractive "over the top" option for those considering cutting the cord on their current video service provider, though Xbox 360 is not being positioned this way - yet.

What do you think? Post a comment now.

Grab Networks has announced a new $12M round of debt and equity financing from existing investors Softbank Capital, SCP Capital, Longworth Venture Partners and Court Square Partners. Horizon Technology Finance led the venture debt piece.

I've written about Grab (formed from the merger of Anystream and Voxant) several times on VideoNuze, and have been impressed with the demos I've seen of their new hosted solution which includes, among other things, auto-generated clips, metadata creation/management and syndication. For now the foundation of the business is still Anystream's traditional licensed transcoding product, but the new end-to-end solution pushes the company far beyond this base, into what I've called the "syndicated video economy." Among others, local broadcasters are a key target market.

This round continues the financing momentum that broadband video companies have experienced despite the financial meltdown. In Q1 '09, industry companies raised over $80M, which came on top of another $80M or so in the Fall '08. Skittish investors are clearly still optimistic about broadband's potential.

(Note, at the end of June I'll be participating in a webinar Grab Networks in organizing about video syndication. More details to come shortly.)

What do you think? Post a comment now.

Following are 3 key themes from VideoNuze in May:

1. Hulu Moves to Center Stage

Already on a roll, Hulu gained lots of mind share in May. After YouTube it is clearly the most-buzzed about video site - not a bad accomplishment for a site that just celebrated its one year anniversary.

The month began with the announcement that Disney would invest in Hulu, at last making available ABC and other programs in Hulu's ever-growing portal. Hulu gained stature during the month as the statistic from comScore released in late April - that Hulu was now the #3 most-popular video site, with 380 million video views in March - was repeatedly recirculated. (Hulu was separately disputing data released from Nielsen showing a far-smaller audience.)

In addition to the Disney content, Hulu also announced its first live event, tonight's concert from the Dave Matthews Band. Capping the month was last week's Hulu Labs announcement, showcasing the desktop app that moves Hulu one step closer to being TV-ready.

Hulu's growth and top-notch user experience continue to set the pace in the online video world. Still, as I noted in my post about the Disney deal, what's still unproven is the Hulu business model and how it plans to navigate the convergence of broadband and TV. The spin coming from its owners is that financial progress is being made, yet Hulu's per program viewed revenues continue to be a fraction of those derived from on-air viewership. Sooner than later, I predict the Hulu growth story is going to start to give way to the Hulu financial story, which may yet include subscriptions.

2. Susan Boyle Shows Power and Conundrum of Viral Video

It was hard to miss the Susan Boyle phenomenon in May. As of last Thursday (before the finale of "Britain's Got Talent" in which she placed second) her original video had generated over 235 million views, according to tracking firm Visible Measures. Ms. Boyle's sensational performance has mainstreamed the term "viral video." The idea that you can become a worldwide personality is truly a broadband-only invention.

Yet 3 1/2 years after SNL's "Lazy Sunday" video became the first bona fide big media YouTube hit (despite NBC's efforts), the process for copyright holders and distributors to monetize these viral wonders remains immature. The NY Times described the interplay over the Boyle viral videos between YouTube, Fremantle, ITV and others, and why those hundreds of millions of views are still under-monetized. But with broadband distribution's increasing importance, this won't last; viral monetization rights are inevitably going to become a key part of the upfront negotiating mix.

3. Mobile video growth

Mobile video continued to get a lot of attention from content providers, service providers and handset makers in May, with initiatives from NBC, NBA, E!, Samsung, Sling, among others (a full listing of mobile video news is here). The mobile video ecosystem is responding to data indicating surging consumer acceptance, primarily driven by the iPhone. In May Nielsen released a report indicating mobile user growth from Feb '07 to Feb '09 was 74%, and that iPhone users are 6 times more likely to consume mobile video. The crush of new smartphones coming in the 2nd half of '09 promises that mobile video usage is going to continue growing rapidly. Limelight's acquisition of mobile ad insertion company Kiptronic is likely the tip of the deal iceberg as companies position themselves for mobile.

What do you think? Post a comment now.

Below is the 18th edition of the VideoNuze Report podcast, for May 29, 2009.

This week I review the Q1 '09 Nielsen A2/M2 Three Screen Report data recently released, comparing it to Q1 '08 data. My comments pick up on a post I wrote earlier this week, "Video Behavior Changes Suggest Evolution, Not Revolution For Now."

Don't get me wrong, video consumption on alternative platforms (i.e. broadband, mobile, DVR) is continuing to grow briskly. But the reality is that when you look at the numbers, they suggest steady rather than dramatic, overnight change is what's really happening in the market. This reality is sometimes missed in the ongoing hype.

Meanwhile Daisy adds more detail to a post she wrote, "Fox's Prison Break Finale Demonstrates the Power of Social Media," which describes how Fox cleverly used social media to promote a DVD with 2 additional episodes following the on-air finale. Fox used various social media sites to release a teaser picture from the new episodes and began promoting the DVD which will be available on July 21 on DVD and for purchase on iTunes. It's an intriguing way for the studio to migrate users beyond traditional TV consumption and generate additional revenue.

Click here to listen to the podcast (13 minutes, 37 seconds)

Click here for previous podcasts

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