VideoNuze Posts

Yesterday VideoNuze and The Diffusion Group hosted "Demystifying Net Neutrality," the first in our 2010 webinar series. Our guests, Barbara Esbin, Senior Fellow and Director, Center for Communications and Competition Policy, Progress & Freedom Foundation (against) and Chris Riley, Policy Counsel for Free Press (for) did an outstanding job advocating their positions. Net neutrality is extremely complex and we had a flood of questions, which our guests did a great job of addressing.

Though Chris made his points well, personally I'm still not persuaded that net neutrality regulations are needed now. As I wrote last fall, my core concern is that no sustained pattern of broadband ISP behavior has been proven. Colin and Chris argue that "corporations can't be trusted" and that inevitable biases will arise for the biggest broadband ISPs who are also the biggest video service providers. All of that may be true. But until it's proven, it's dangerous business to start tinkering with the well-functioning Internet. The FCC should stay vigilant, but not pursue net neutrality regulation now.

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It's Super Bowl time again, which means it's time for me to write my annual post wondering whether this will be the year that Super Bowl advertisers really embrace online video and social networking opportunities. Four years ago, I speculated that at some point a Super Bowl ad could go for $10 million apiece, because the online video extensions could drive the ROI so much higher than what a traditional 30 second ad alone delivers. Nonetheless, advertisers and their agencies have been painfully slow to get with the online video program, and I've been ranting about the missed opportunities (see here and here) year after year.

As this NY Times piece describes though, this could finally be a breakthrough year. I like the way that Kathy O'Brien, VP for personal care at Unilever put it, "The Super Bowl is an element of a complete, 360-degree campaign." That's smart thinking. On Monday I'll tally up the score to see how this year's Super Bowl advertisers did with their online video and social networking extensions.

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This week brought news that YouTube's recent foray into rentals netted the company a whopping $10,709.16. I wasn't surprised by the results, as YouTube only made 5 Sundance films available for 10 days. As I suggested 2 weeks ago, even with YouTube's massive audience, it would be unreasonable to expect too much. Still, it was great promotion for the indie film producers and no doubt a learning experience for YouTube.

I'm not religiously opposed to YouTube broadening its model beyond free and ad-supported video, but I do think YouTube needs to be wary of spending a lot of time trying to secure me-too rights for distribution of Hollywood's prime TV and movie output. That's highly competitive ground, and Netflix for one, has enormous advantages given its robust subscription model. YouTube is in the pole position when it comes to the ad-supported online video model and it needs to be relentlessly focused on proving it can make the model profitable.

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Daisy Whitney and I are pleased to present the 48th edition of the VideoNuze Report podcast, for February 5, 2010.

This week we get started with me reviewing yesterday's post about FreeWheel now serving close to 2 billion video ads per month and signing up MLB Advanced Media as their newest customer. FreeWheel's Doug Knopper told me that it is benefitting from both its new customers and also from year-over-year increases in ads served for existing customers. FreeWheel is also in the middle of the "syndicated video economy" that I've written before, having integrated with big third parties such as YouTube, AOL, MSN, Fancast and others.

Then Daisy describes her interview from last week's NATPE show with Chloe Sladden, director of media partnership for Twitter. The company is planning to launch its Media Developer's Platform later this year, along with new measurement tools. Daisy shares what she learned.

Click here to listen to the podcast (12 minutes, 38 seconds)

Click here for previous podcasts

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FreeWheel is on a roll, now serving almost 2 billion video ads/month, doubling its volume just since November, 2009. In addition, the company has added Major League Baseball Advanced Media to its customer roster and began implementing ads during the fall playoff season. The MLB win comes on top of recently announced customers Turner Broadcasting System and VEVO. FreeWheel's co-CEO/co-founder Doug Knopper brought me up to speed on all the news late last week.

Doug said that part of the increase in FreeWheel's volume is attributable to the additional customers that have come on board, but he's also very excited about the year-over-year growth in ad volume FreeWheel is seeing for longer-term customers ("same store sales" if you will). FreeWheel is seeing big increases due to 3 factors: customers posting greater quantities of video, plus deepening viewership of that video (all of this borne out by comScore's '09 video consumption data); customers' improving ability to actually sell ads against these videos (reflecting the shift of budgets to the online video medium); and reduced friction through the emergence of "accepted practices" in ad operations.

FreeWheel is also benefiting from its specialization in helping content providers monetize their video on third-party sites (e.g. YouTube, AOL, MSN, Fancast, etc.). More and more content executives are realizing that sizable viewership opportunities exist by syndicating their video outside of their own properties. Doug said that every content company FreeWheel is now talking to is interested in some kind of syndication.

Doug described 3 types of syndication he's seeing: (1) across a family of sister corporate sites, such as PGA.com providing CNN.com video, which are both owned by Turner; (2) between affiliated entities like local MLB teams providing video to the main MLB.com hub and (3) externally, to unaffiliated 3rd parties, such as WMG music providing videos to YouTube. Given all this syndication activity, I was interested to learn from Doug what percentage of the ads FreeWheel serves fall into each of these 3 buckets vs. what percentage are served on the customer's sites themselves. Doug said that FreeWheel is pulling those numbers together in a way that ensures its customers privacy and will get back to me when he has them.

In addition to the above syndication activity, FreeWheel is seeing experimentation with delivering ads to mobile devices, convergence/CE players and Internet-enabled TVs. In all these cases, customized ad policies determine who sells what ad inventory and how revenue is shared and reported. Powering all of this has been part of FreeWheel's core mission from inception, making it a key player in what I've called the 'syndicated video economy."

FreeWheel's growth echoes what I've been hearing lately from both video ad network executives and video content providers. They too are talking about rapidly rising volumes and improving monetization. As I wrote recently, I've been impressed lately by efforts to make video ads more engaging and provide a better ROI, a trend I see continuing. Taken together, while it's still relatively early days, online video advertising seems to be making great strides.

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Please join me for the complimentary "Demystifying Net Neutrality" webinar tomorrow, Thurs, Feb. 4th at 11am PT / 2pm ET. This is the first of six webinars VideoNuze is presenting in 2010, in partnership with The Diffusion Group, one of the leading digital media research firms. The webinars are sponsored exclusively by ActiveVideo Networks

TDG's Colin Dixon and I will host the webinar, and we will have 2 expert guests with us who are on opposite sides of the net neutrality debate: Barbara Esbin, Senior Fellow and Director, Center for Communications and Competition Policy, Progress & Freedom Foundation (against) and Chris Riley, Policy Counsel for Free Press (for). Barbara and Chris will advocate their positions and then Colin and I will question each of them before opening it up to audience Q&A.

The webinar promises to be a deep-dive educational session examining all of net neutrality's pros and cons. For anyone with a stake in broadband/online content delivery and over-the-top video specifically, it will be a must attend session.

REGISTER NOW - IT'S FREE!

KickApps and NBCU are announcing a licensing deal this morning which includes KickApps' App Studio and Premium Social Video Platform. The deal enables all of NBCU's entertainment properties to use KickApps' social software solution, expanding upon a prior relationship between the companies which has primarily focused on NBC's local media properties.

As Marc Siry, NBCU's SVP, Digital Products and Services explained to me, KickApps's key differentiator was its self-service App Studio which allows NBCU's brands to quickly create customized, socially-oriented sites and video players using drag-and-drop tools. Marc said that the self-service aspect to the App Studio was particularly important as each NBCU property has its own customization requirements. With resources tight, it was key to be able to have each property be somewhat self-sufficient. Marc said that social wrapping is essential to all media today, and that no other online video platform that NBCU evaluated offered the same capabilities.

(As a side note, I have always thought of KickApps as a social platform first and foremost, which also offered video functionality. As a result it's not really a pure OVP, though with its NBC win, KickApps is showing that for some customers, it is a bona fide OVP competitor.)

NBC has strongly pursued social interaction on its local sites, encouraging users to submit comments, video, and other engagement opportunities. With local media impacted by audience fragmentation, efforts to re-invent how to connect with audiences have been crucial. Looking ahead - though unable to get too specific for now - Marc told me that NBCU already has several projects in the works that will leverage KickApps: a fan site from Telemundo, a new video portal emphasizing "secondary" non-TV program content with rabid fan interest, and a celebrity-oriented user-generated site. Parent company GE is even planning to use KickApps as an enterprise solution for video sharing among internal units.

Marc said that one other appealing aspect of KickApps was its embrace of Adobe's Open Source Media Framework ("OSMF"). For those not familiar with OSMF (formerly known as "Strobe") it is a public, pre-release initiative aimed at allowing developers to use pluggable components to create rich Flash-based playback experiences. It is still early days for OSMF and it represents something of a challenge to many online video platforms which offer similar integrations as part of their product or through professional services.

But as Marc explained, OSMF is valuable to NBCU because it is seeing more and more requirements from its brands and advertisers to do custom creative and OSMF gives it a baseline of functionality on which to build. Prior to KickApps, NBCU properties relied mainly on homegrown software for video applications, which Marc said had limited flexibility.

KickApps's NBCU win is yet another example of how dynamic the market for video solutions is today. I am continually hearing about how specific content providers each have their own unique requirements, so an individual video platform provider can be a perfect fit in one situation, but be less than optimal in another. While some requirements are converging, I anticipate a level of individuality will persist for some time to come, sustaining the OVP fragmentation we've seen to date.

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