VideoNuze Posts

Daisy Whitney and I are pleased to present the 44th edition of the VideoNuze Report podcast, for December 18, 2009. This will be the last podcast for 2009, and we'd both like to say a huge thanks to everyone who's been listening in this year.

This week I start things off by providing further detail on my experience so far with Comcast's TV Everywhere initiative, Fancast Xfinity TV (or "FXTV" as I call it for short), which was released in beta to 14 million subscribers this week at no additional charge. On the whole I think it's a respectable effort, and in the big picture, is exactly what the company should be doing with online distribution. The main challenge for improving it is getting lots more content from ad-supported and premium cable networks, so that users are more likely to find what they're looking for. For all kinds of reasons, this won't be easy, but if any company can make it happen, it's surely Comcast.

Then Daisy reviews her '09 predictions and shares her "New Media Minute Awards for Excellence." She recognizes Kaltura, 5Min, boxee, Quantcast, and  number 1 pick, MyDamnChannel. All have excelled this year, attracting new venture financing, signing new deals and growing their business. Daisy is particularly proud of MyDamnChannel because it also achieved profitability this year. Listen in to find out more.

Click here to listen to the podcast (14 minutes, 18 seconds)

Click here for previous podcasts

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

Simon Fuller's 19 Entertainment announced a new reality series yesterday, "If I Can Dream" which will rely on streaming, mobile and social media to dramatically enhance audience engagement. "If I Can Dream" will follow five young actors as they pursue Hollywood fame and fortune. The series will be distributed on its own site and through Hulu, MySpace, Clear Channel and others.

While the show will have a traditional 30 minute television-show format, it's clear that Fuller plans to use technology to differentiate the show from the myriad other reality offerings. All of the actors' moves will be streamed live using new sensor technology and audiences will interact with the actors via text, blogs, Twitter, MySpace and other in real-time. For sponsors Pepsi and Ford, we'll no doubt see new brand engagement opportunities. Some of this has already been done with other shows, but Fuller appears to be looking to take it to a whole new level.

Hulu's role is also intriguing. I haven't thought of Hulu as having a place in broadband-only original productions, but as I consider this move, it makes sense. Though deal terms were not disclosed, Hulu is likely putting up no money, and is instead bringing its substantial traffic and promotional capabilities to the partnership. It costs Hulu nothing to give "If I Can Dream" visibility on the site, so it's in a strong position to help establish the show. With the company's reach into brands and agencies it can sell ads without bumping into broadcast networks' sales reps.

Amid much anticipation, Comcast launched its "Fancast Xfinity TV" (my shorthand will be "FXTV") service yesterday. FXTV is Comcast's TV Everywhere offering and it will initially be available only to the company's approximately 14 million "dual play" (digital cable + broadband Internet access) subscribers. Comcast is keeping a "beta" label on FXTV for now, to give it some time to work out the kinks. As a Comcast triple-play customer, I have access to FXTV and I played around with it yesterday and last night. While there's plenty of room for improvement, overall FXTV is off to a respectable start.

When dual play customers now visit Fancast they are immediately notified through a prominent pop-up that there's "Great News for Comcast Customers" about online access to over a 1,000 new shows and movies. "Get started" prompts the user to enter their Comcast.net email address and password, then a 17.5MB download begins which includes the Move Networks player and an Adobe Air application. After naming your computer (you're allowed up to 3 devices to access FXTV), the site reloads with the new FXTV Beta branding. All of that worked fine for me.

A prominent window at the top of the page promotes 4 current TV shows, but FXTV misses a big opportunity to immediately demonstrate its value by oddly showcasing just 1 program (TNT's "Men of a Certain Age,") that's not sourced from Hulu. Savvy users will know the rest are already freely available there. Why not promote 4 programs that are only available to FXTV users? And why not include messaging like "Exclusively for FXTV Users!" to remind users of the payoff for having just gone through a download process?

On the positive side, below this window, FXTV promotes programming from premium channels HBO, Starz and Cinemax. As a non-subscriber to Cinemax, when I clicked on "Juno," which had a little key icon, FXTV's authentication process kicked in, prompting a message to subscribe to Cinemax to watch. However, when I clicked "Learn more" my popup blocker interceded which meant I needed to disable it and then reload the page. The Cinemax promotional page that loads is generic from the Comcast.com web site, featuring a graphic of "Gran Torino" and promotions for 3 other movies. Comcast has a golden upsell opportunity when FXTV users click on premium content. It would no doubt improve its conversion ratio if the landing page were customized to load a graphic of the original movie or show selected at FXTV, well merchandised with trailers, clips and other information. A special offer/reward for FXTV users would also help.

Back on the FXTV site, below the premium channel promotions is an area for Full Episodes, categorized by "Celeb News," "The Hot List," "Dramas," etc. Once again, many of the thumbnails link to content that is freely available online and to all other Fancast users. Once again, I'm surprised that Comcast isn't doing more to promote programs that are only available to FXTV users, making it more explicit what's special about FXTV.

I clicked and watched parts of a number of shows and in general my experience was positive. I've read other reviews describing buffering delays, but I didn't experience any issues, or at least anything different than I typically do when starting videos at other sites. One thing Comcast disclosed on the press call yesterday was that FXTV would be available to dual play subscribers outside their homes. Recall that in the 5,000 person trial, users could only access the service from within their homes, so this is a major step forward. I haven't yet tested FXTV remotely, but will do so while in Florida next week.

The biggest challenge FXTV faces is content availability, particularly from the ad-supported cable networks. For example of last week's top 10 rated cable shows, only TNT's "The Closer" and "Men of a Certain Age" are available on FXTV. Among the top 10, there are no sports (football or WWE) or kids shows like "Sponge Bob" (Nick) or "Phineas and Ferb" (Disney) available. Even for #10 show "Keeping up With the Kardashians" the most recent episodes are from Season 2, back in May 2008 - and this is a show that's on E! Entertainment, a channel that Comcast itself owns! There are no episodes offered of my favorite cable show, AMC's "Mad Men."

The content selection on the premium channels HBO, Starz and Cinemax (note Showtime is not yet available on FXTV) is better, but not eye-popping. For example, the only episodes of HBO's "Entourage" that are available are from Season 2 in 2005, despite the fact that Comcast's CEO Brian Roberts specifically demonstrated and highlighted the idea that all episodes of Entourage would be available when he showed the service at the Web 2.0 conference less than 2 months ago. For some reason HBO must have pulled the rights to Entourage in this time.

A lot of the questions on the press call Comcast conducted yesterday focused on content availability and it's clear that obtaining the rights to distribute the full slate of cable programs online is devilishly complex. To be sure, Comcast has made progress, saying it has 27 networks are supplying programming, totaling 12K titles. There's no distributor in a better position to make online distribution happen than Comcast, yet as I wrote last week about Nielsen not yet being able to collect and then synthesize online viewership, Comcast (and other TV Everywhere providers) are subject to forces beyond their control.

Yet another complicating factor is how advertising in FXTV will work. Comcast said that for now, while "nobody really knows what works best," each network will be permitted to experiment with ad loads. It's not clear how long this will go on, nor what role Comcast will play to guide networks to a certain load. In the meantime though, the downside is that the user experience is inconsistent from one network to another. For an offering that's free to subscribers that's not a big drawback, but the lack of consistency does chip away at least a little bit from the overall experience.

Taken together, Comcast deserves credit for getting FXTV out the door just 6 months since announcing it this summer, which is light speed in cable TV terms. There are lots of ways it can and will be improved upon. Gaining credibility with content providers, so that FXTV can beef up its library is priority #1. As I've been saying for a while now, conceptually FXTV is right on all fronts - it preserves the paid consumer model for content providers, offers users enhanced value and helps Comcast and other providers defend against cord-cutting. Hopefully Comcast and other providers will sufficiently invest in these services to let them reach their full potential.

What do you think? Post a comment now.

Mobile video advertising is showing strength, benefiting from consumer adoption of the "mobile Internet," strong growth in video-capable smartphones and improving availability of high-quality content for mobile devices.

I gained further insight on the mobile video ad opportunity in a conversation yesterday with Ujjal Kohli, the CEO of Rhythm New Media, a firm focused on mobilizing and monetizing TV programming that has raised $27 million to date from a group of blue-chip of investors. Later this week Rhythm will formally unveil "RAMP," the Rhythm Advertising Media Platform, a mobile video ad network targeted to brands already advertising on TV who now also want to have a mobile presence.

Ujjal makes a strong case that mobile video is an ideal environment for brand building, and that it addresses many of the challenges that TV advertising itself is facing (clutter, distraction, fragmentation, inadequate frequency/targeting/measurability). Ujjal believes that the nature of mobile video consumption, with its relatively short duration, focused user sessions gives brands a renewed opportunity to engage their target audiences with hard-to-skip messages, not only in the prime-time window, but throughout the day as well.

Rhythm has been helping stoke the market for high-quality mobile video content by building video apps for clients like Discovery, E! Entertainment, TMZ, TV.com, Family Guy and others. App building has been a means to an end for the Rhythm, which is primarily focused developing its mobile video ad network. In Q4 the company has sold and run 20+ campaigns, for brands like MasterCard, Nikon, Toyota, Marriott, Anheuser-Busch and others. These are almost always 15 second spots repurposed from TV campaigns which is no surprise, as the mobile market is not yet big enough to warrant custom creative.

Ujjal explained that a key Rhythm differentiator is that its ads allow interactivity, or the ability for the user to click on an ad's call to action, as is common online. Rhythm has devised a way to incorporate interactivity in ads shown against videos viewed on iPhones, where the use of QuickTime doesn't enable linking. Ujjal said that click-through rates for its "interactive pre-roll" unit fall in the 2%-6% range, while a "full page" ad unit used for mobile photo viewing, (e.g. slide shows on TMZ.com) generate click-throughs up to 11%. Ujjal would not specify what volume of ads Rhythm is serving, except to say it's in the millions/month and that the CPMs are higher than in online video or TV itself.

I've been very bullish on mobile video for some time now, as I believe it is following a similar growth pattern as online video. The macro-trends supporting mobile video's growth are impressive: Nielsen believes that in Q4 '09, 40% of all phones sold will be smartphones and that by 2011 they'll be majority. By then Nielsen forecasts 90 million a month will be watching mobile video. According to its Q3 '09 A2/M2 report, almost 16 million are now watching mobile video/month, up 53% since Q3 '08. They are watching an average of 3 hours, 15 minutes/month. While this is inexplicably down a bit from a year ago, it's worth noting that the heaviest users, to nobody's surprise are age 12-17 (7 hours, 13 minutes) and 18-24 (4 hours, 20 minutes). As these segments age they'll no doubt carry along their mobile video expectations.

Another dynamic sure to have a positive impact on mobile video consumption is the intensifying competitive battle between carriers and between smartphone manufacturers themselves. The recent AT&T-Verizon ad war about their 3G availability is a glimpse of how these companies will use network capacity (key to a positive video experience) as a competitive lever. On the handset side, there is hyper activity: Motorola's Droid is off to a respectable start, a bevy of Google's Android-based smartphones are due in 2010, and, complicating things further, Google plans to release its own "unlocked" (i.e. carrier neutral) Nexus One smartphone next year. While the iPhone opened the smartphone floodgates, many others are now rushing to get a piece of the action.

The biggest uncertainty impacting mobile video's growth is the wireless networks' ability to keep up . All the snazzy smartphones in the world won't matter if users can't get 3G or better access to watch quality video. But, if broadband is any guide, wireless carriers will build out capacity to meet demand, driving up data plan subscriptions and their own ARPU. Broadband also illustrates that as the necessary building blocks fall into place, content providers will be motivated to take part, providing consumers with ever more choices. While it's still early days, taken together it looks as if big things lie ahead for mobile video and for those like Rhythm who can help monetize it.

What do you think? Post a comment now.

Performance-based video ad network SpotXchange will announce this week a new partnership with audience profiling firm Quantcast that will allow SpotXchange to offer demographic targeting across its entire network as well as Gross Ratings Points (GRP) based campaigns, the standard for TV media buying. As Bryon Evje, SpotXchange's EVP told me last week, being able to translate campaigns into a "cost-per-point" model for its clients means SpotXchange will be more appealing to traditional TV media buyers evaluating online video ad opportunities. SpotXchange's goal is of course to lure over ad dollars traditionally spent on TV.

If a SpotXchange advertiser is also a Quantcast client, then the advertiser will be able to proactively define a specific audience it wants to target and then buy just those ad placements from SpotXchange that fulfill its objective. SpotXchange can use Quantcast's data on particular segments to determine how many GRPs are available, and then by combining its own pricing, can calculate what it would cost a client to reach that audience on a per point basis.

SpotxChange can separately offer demographically-targeted ads by doing a real-time match against Quantcast's data, before an ad is served. If there isn't a targeted user available, then no ad would be served, reducing spending waste and enhancing the overall campaign's ROI.

Quantcast's demographic information is derived by tracking the behaviors of 220 million Internet users across thousands of web sites. I talked briefly with Quantcast's head of business development Winston Crawford who explained that the company's secret sauce is an "inference model" that takes the behavioral data and mathematically translates it into affinity levels.

From this Quantcast is able to build a "lookalike" model which allows advertisers to target those users who have similar affinities (and as a result a higher probably of converting) elsewhere on the web. In the case of SpotXchange, the lookalikes targeted would be users of sites in its publisher network. Quantcast already works with other video ad networks such as Tremor and BBE, along with many display ad networks.

Melding online video ad campaigns with traditional GRP measurement has gained momentum this year, as other video ad networks like Tremor, BBE and YuMe have announced their own initiatives. Combining a GRP approach with demographic targeting offered by firms like Quantcast is further evidence that the online video ad medium is continuing to mature. Despite the news today that CBS Interactive is phasing out its use of third-party ad networks, as video ad networks move to offering campaigns that can be evaluated along traditional TV criteria, this should in turn draw traditional TV ad dollars to online video. That would mean video ad networks' value would increase.

What do you think? Post a comment now.

Following are 4 items worth noting for the Dec 7th week:

1. Boxee's new box with D-Link - It was hard to miss the news from boxee this week that it will be launching its first box, in partnership with D-Link, in early 2010. Boxee has gained a rabid early adopter following, but the high hurdle requirement of downloading and configuring its software onto a 3rd party device meant it was unlikely to gain mainstream appeal. Strategically, the new box is the right move for the company.

For other standalone box makers such as Roku, boxee's box, with its open source ability to easily offer lots of content, is a new challenge (though note, still no Hulu programming and little cable programming will be available on the boxee box). The indicated price point of $200 is on the high side, particularly as broadband-enabled Blu-ray players are already sub-$150 and falling. Roku has set a high standard for out-of-the-box usability whereas D-Link's media adaptors have never been considered ease-of-use standouts. Boxee's snazzy, but very unconventional sunken-cube design for the D-Link box is also risky. While eye-catching, it introduces complexity for users already challenged by how to squeeze another component onto their shelves. If boxee only succeeds in getting its current early adopters to buy the box it will have gained little. This one will be interesting to watch unfold.

2. AT&T tries to solve its iPhone data usage problem - In the "be careful what you ask for, you might just get it" category, AT&T Wireless head Ralph de la Vega revealed an interesting factoid this week at the UBS media conference: 3% of its smartphone (i.e. iPhone) users consume 40% of its network's capacity. Of course video and audio capabilities were one of the big ideas behind the iPhone, so AT&T should hardly be surprised by this result. AT&T, which has been hammered by Verizon (not to mention its users) over network quality, thinks the solution to its problem is giving heavy users unspecified "incentives" to reduce their activity. No word on what that means exactly.

Mobile video has become very hot this year, largely due to the iPhone's success. But the best smartphones in the world can't compensate for lack of network capacity. While AT&T is adding more 3G availability, it's questionable whether they'll ever catch up to user demand. That could mean the only way to manage this problem is to throttle demand through higher data usage pricing. That would be unfortunate and surely stunt the iPhone's video growth. Verizon, with its line of Android-powered phones, could be a key beneficiary.

3. Q3 '09 Nielsen data shows TV's supremacy remains, though early slippage found - Nielsen released its latest A2/M2 Three Screen Report this week, offering yet another reminder that despite online video's incredible growth, TV viewing still reigns supreme. Nielsen found that TV viewing accounted for 129 hours, 16 minutes in Q3. While that amount is more than 40 times greater than the 3 hours, 24 minutes spent on online video viewing, it is actually down a slight .4% from Q3 '08 of 129 hours 45 minutes.

How much weight should we give that drop of 29 minutes a month (which equates to just less than a minute/day)? Not a lot until we see a sustained trend over time. There are plenty of other video options causing competition for consumers' attention, but good old fashioned TV is going to dominate for a long time to come. This is one of the key motivators behind Comcast's acquisition of NBCU.

4. 3D poised for major visibility - In my Oct. 30th "4 Items" post I mentioned being impressed with a demo from 3D TV technology company HDLogix I saw while in Denver for the CTAM Summit. This Sunday the company will do a major public demonstration, broadcasting the Cowboys-Chargers in 3D on the Cowboys Stadium's 160 foot by 72 foot HDTV display. HDLogix touts its ImageIQ 3D as the most cost-effective method for generating 3D video, as it upconverts existing 2D streams in real-time, meaning no additional production costs are incurred.

Obviously those watching from home won't be able to see the 3D streaming, but it will surely be a sight to see the 80,000 attendees sporting their 3D glasses oohing and aahing. Between this and James Cameron's 3D "Avatar" releasing next week, 3D is poised for a lot of exposure.

Enjoy the weekend!

Daisy Whitney and I are pleased to present the 43rd edition of the VideoNuze Report podcast, for December 11, 2009.

This week Daisy kicks us off, discussing key trends to look for from early adopters online in 2010, based on her recent interview with Bill Tancer, the author of Click, and the head of research at Hitwise. The insights may surprise you. Daisy also discusses what sites are heating up and tools that are available to help you detect trends yourself.

Then I dig into further detail on my post from yesterday, "Lack of Viewership Data Could Stall TV Everywhere," in which I outline concerns cable TV networks have regarding Nielsen's current inability to measure online viewership of TV programs. Until this is fixed, many networks will be reluctant to provide their primetime programs to TV Everywhere providers as they won't receive ratings credit for programs viewed online. If online viewership were to cannibalize on-air viewing, networks' ratings-based advertising revenues would suffer. Listen in to learn more.

Click here to listen to the podcast (14 minutes, 25 seconds)

Click here for previous podcasts

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

Based on a number of conversations I've had with cable programming executives, Nielsen's current inability to measure online viewing of TV programs and meld that data effectively with on-air viewing is emerging as a key stumbling block to successful rollouts of TV Everywhere services.

Cable networks are justifiably concerned that any viewership that potentially shifts from on-air to online that they are not credited for will adversely impact their ratings and therefore their advertising revenue. Until the issue is fixed cable networks will be reluctant to offer their most popular programs to TV Everywhere providers, in turn diluting TV Everywhere's appeal to consumers.

Nielsen, the de facto standard in TV ratings measurement, is well aware of these concerns and as Multichannel News reported this past Monday, it plans to accelerate the deployment of its "TVandPC" software which measures online viewing to 7,500 of its National People Meter households by Aug. 31, 2010. While that's a start, as industry executives have told me, it's not just the online viewing data that's needed, but also the proper blending of that data with the on-air data that's critical.

Among the issues is how online viewing, which offers consumers the potential of much-delayed on-demand viewing, should be aligned with Nielsen's "C3" ratings, which captures up to 3 days playback on DVRs. Another issue is understanding and measuring new TV Everywhere viewership patterns (e.g. college students remotely watching shows on a laptop which has been authenticated by Mom and Dad's cable account). Then there's the question of whether the online ad loads are going to be comparable to those on-air (e.g. if the online share of a program's overall viewership carried far fewer ads than the on-air viewership, advertisers and media planners will want to know this). No doubt other issues loom as well.

Add it all up and the process of collecting and then blending online and on-air viewership data is non-trivial and will require a significant investment and testing on Nielsen's part to accomplish. From Nielsen's standpoint, it could be reluctant to make such an investment in overhauling its measurement service unless there were pre-commitments from some of its clients to accepting and buying the enhanced ratings service.

On the one hand, it would seem that cable networks' reluctance to embrace TV Everywhere until adequate measurement systems were in place would be a strong incentive for TV Everywhere providers to support Nielsen's enhancements. However, I've been told that when Nielsen previously made improvements to track Video-on-Demand viewership, not many service providers implemented necessary mechanisms to denote programs were VOD-based, and therefore Nielsen's investment yielded little return. Particularly given the tough economic times, that could make Nielsen more cautious about how it proceeds with online ratings. For now Nielsen has not disclosed its plans.

Still, Nielsen is under pressure to move forward given the formation of the Coalition for Innovative Media Measurement (CIMM), which is comprised of 14 TV networks, agencies and advertisers. CIMM's goal is to explore new methodologies for audience measurement, particularly for set-top box data and cross-platform media consumption. While some in the industry have tagged CIMM as a Nielsen challenger, its members have said they have no intention of trying to replace Nielsen. Regardless, the presence of an industry-backed group trying to wrap its arms around cross-platform audience measurement is likely to only accelerate Nielsen's online tracking efforts.

As VideoNuze readers know, I've been quite enthusiastic about TV Everywhere's potential, though I'm plenty cognizant of the challenges it faces. Measurement is surely near the top of that list. One of the benefits to Comcast of owning NBCU is that, if it chooses to, it can release NBCU's cable networks' programs for TV Everywhere viewing, absent complete online tracking. This would be comparable to what Hulu's owners have chosen to do by distributing their broadcast network shows online (they're at least partly motivated by the belief that online viewing augments on-air viewing). But Comcast won't take ownership of NBCU for another year or so. By that time Nielsen may well be close to rolling a blended online/on-air offering.

In sum, it could well be that 2010 ends up being more a year of experimentation for TV Everywhere while building blocks like audience measurement get put in place. VOD, which years since its launch still lacks many primetime programs as well as dynamic advertising insertion, offers a cautionary example for TV Everywhere providers of how a lack of investment can block the realization of a new medium's full potential. Cable networks in particular will keep looking for signals that TV Everywhere will be more robust than VOD before they get too enthusiastic about online distribution.

What do you think? Post a comment now.