The Internet is awash in free videos to watch. For consumers, that's been great news as there are more choices available today than ever. For independent content creators, the Internet offers an unparalleled opportunity to build audience and visibility. The problem is that for these creators, actually making money online has remained a tough nut to crack.
Now, a startup named LittleCast is giving content creators an easy way to sell their videos, via Facebook and in iOS and Android mobile apps. CEO Amra Tareen explained to me that the process is pretty straightforward - content creators just upload their videos to LittleCast and decide how much to charge. LittleCast transcodes the video into various formats and HD/SD resolutions and stores them in the cloud. They can then be published in LittleCast's media player on Facebook and in the mobile apps.
I'm pleased to present the 179th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia. Yesterday, YouTube confirmed that it will offer content partners the ability to charge for subscriptions. In what its calling a pilot program, 53 subscription channels are being launched, some from established brands like UFC, PGA, National Geographic and Jim Henson, and many more from less well-known content partners.
In this week's podcast Colin and I discuss whether this is a big deal or not. Colin's more bullish than I am, seeing it as a very important piece in the YouTube puzzle, adding to existing advertising, rental and purchase monetization options.
I agree it's smart move by YouTube, but I don't think it's a game-changer. While I see this as the right thing to offer content partners - especially those with huge audiences on YouTube - this is akin to "freemium" type option that will require partners to very clearly differentiate the incremental content available in their subscription tiers in order to convert a small percentage of their free viewers to monthly subscribers.
A complicating factor is that for many users, YouTube subscriptions will be on top of - not a substitute for - already expensive pay-TV monthly bills. Then there's also a Netflix, Hulu Plus, Amazon or other SVOD subscriptions which already make a claim on finite entertainment dollars too. Lastly, YouTube is perceived as a "free" site by many, so it will take significant promotion by channels to persuade users to pay.
Bottom line: YouTube is doing right by its content partners in offering this capability, but it's up to the content partners themselves to make it successful. My guess is for most partners, advertising will continue to dominate their YouTube-related revenue for a long time to come.
Listen in to learn more!
Click here to listen to the podcast (18 minutes, 15 seconds)
At the NABShow last week, NeuLion and Deluxe Digital Distribution announced a partnership creating the "NeuLion TVE Platform with Deluxe OnDemand" which enables customers to deliver branded online movie stores. Targeted customers include retailers, service providers and content owners who can tap into Deluxe's catalog of 50K movie and TV show titles.
At NABShow I did a video interview with Chris Wagner, NeuLion's EVP and co-founder, who explains the deal and its potential.
Disney's announcement that it was shutting down its Disney Movies Online service on Dec. 31 is another blow for transactional VOD and digital lockers for movies, two corners of the online video ecosystem that are struggling for traction.
Transactional VOD - renting or buying movies online - has become a tougher sell to consumers in the digital age. Not long ago Hollywood studios' home video divisions boomed as many consumers were keen to buy DVDs and create large collections of movies that they prominently displayed. But while DVD sales have gone off the cliff recently, digital rentals and purchases haven't picked up the slack.
thePlatform is introducing new commerce capabilities as part of its mpx video management platform today. Marty Roberts, thePlatform's SVP, Sales and Marketing, told me last week that as online video continues to mature, customers are looking to monetize content through every release window, so transactions have gained importance.
thePlatform's commerce capability allows service providers and content owners to create business rules for pay-per-use, download-to-own, season passes, movie bundles and other special promotions in addition to ad-supported and subscription models. Marty noted that the new commerce system enables complimentary monetization to electronic sell-through already available for certain titles via iTunes, Amazon and other third-parties.
Amazon has been offering its customers the opportunity to upload video product reviews for years, but peruse the site and you'll see that text reviews still dominate, with only a scattering of videos. No doubt recognizing how powerful video has become, it looks like Amazon may be putting a new emphasis on video product reviews. In an email I received yesterday from the company (which millions of other Amazon customers are likely receiving as well), the subject line read "Review your recent purchases at Amazon.com," with a large callout:
"New on Amazon! Grab your video camera or webcam and add video to your customer review. Click on "Review this product" above to upload a video or find a different product to review"
To be accurate, video reviews aren't a new feature on Amazon, though clearly they haven't been used much; for the 3 products I had bought, all had a healthy number of text reviews, but none had any video.
Following are 4 news items worth noting from the week of August 24th:
1. Time Warner Cable, Verizon launch TV Everywhere trials - Little surprise that Time Warner Cable announced its own TV Everywhere trial yesterday, given that former sister company Time Warner has been one of its biggest proponents. More interesting was Verizon launching a TV Everywhere initiative, which I regard as a pretty strong indicator that most or all service providers will eventually get on board. (The Hollywood Reporter has a story that DirecTV is in talks too for online distribution of TBS and TNT to start).
I have to give credit to Time Warner CEO Jeff Bewkes, TV Everwhere's key champion, who's clearly generated a groundswell of support. While some critics see TV Everywhere as being at odds with the "open Internet" ethos, I continue to think of it as a big win for consumers eager to get online access to their favorite cable programs. Assuming authentication is proven in during the trials I expect a speedy rollout.
2. Conde Nast distributes through boxee - I was intrigued by news that Conde Nast Digital will begin distributing video from its Wired.com and Style.com sites through boxee. boxee and others who connect broadband to TVs are valuable for magazines and other content providers who have long been shut out of the cable/satellite/telco distribution ecosystem, thereby unable to reach viewers' TVs. Years ago special interest magazines missed big opportunities to get into cable programming, allowing upstart cable networks to grow into far larger businesses (consider ESPN vs. Sports Illustrated, Food Network vs. Gourmet or CNBC vs. Forbes). Broadband gives magazines, belatedly, an opportunity to get back into the game.
3. Amazon announces 5 finalists in UGC ad contest - Have you seen the 5 finalists' ads in Amazon's "Your Amazon Ad" contest, announced this week? They're quite clever, with some amazing special effects. The contest is another great example of how brands are tapping users' talents, posing new competition to ad agencies. I haven't written about this in a while, but I continue to be impressed with how different brands are pursuing this path. Doritos has been the most visible and successful with its user-generated Super Bowl ads.
4. Microprojectors open up mobile video sharing opportunities - Maybe I've been living under a rock because I just read about "microprojectors" for the first time this week (I have a decent excuse since as I non-iPhone owner I wouldn't have a use for one, yet). As the name suggests, these are pocket-size projectors that allow you to output the video from your iPhone to project onto a large surface like a wall or ceiling. According to this NY Times review the quality is quite respectable, and is no doubt only going to improve. The mind boggles at what this could imply for sharing mobile video. Imagine bringing a kit - consisting of an iPhone, portable speakers and microprojector - to your friend's house, then plugging in and projecting either a live stream or an on-demand program for all to see.
Enjoy your weekend!
A lot of my time at VideoNuze is spent exploring how broadband's massive penetration has opened up new opportunities for video distribution to consumers. But a recent conversation with Kelly Thompson, COO of iStockphoto served as a reminder that broadband is also beginning to play an important role for professionals seeking stock video footage.
For those not familiar, the "stock" industry refers to photographs, images, audio and video that creators make available for use by others under various license arrangements. Stock assets are often used by creative professionals in lieu of having to create their own because of time and expense limitations.
iStockphoto pioneered a new "microstock" online marketplace which allows stock assets to be downloaded for as little as a dollar apiece. The company has grown rapidly, anticipating $200M in revenues this year delivering over 30M assets, or about 1 every second of every day. iStockphoto splits between 20-40% of each download fee with its contributors depending on terms the contributor has chosen. This year it will pay out over $60M to thousands of contributors. Kelly noted that some contributors' whole income is derived from iStockphoto payments (top contributors can make $300K-400K/year). Getty Images, the largest stock house in the world, bought iStockphoto in 2006 for $50M.
What caught my eye is iStockphoto's move into stock video distribution. Though video has been available for just 3 years, Kelly anticipates it will account for $20M or 10% of revenues in '09. Kelly explained that there's been a massive increase in the need for stock video, as demand for it to be included in PowerPoint presentations, web sites and online campaigns has surged.
Buying stock video at iStockphoto is easy. After setting up an account, you enter keywords or just browse the video catalog. You're presented with thumbnail images, which expand to play the full video when you roll over them. Payments are made using "credits," iStock's currency. Videos are offered in different quality and prices, depending on the user's needs. A lower res video might be around $15 to download while the same in HD quality might be $75.
Kelly explained that widespread broadband access and inexpensive HD cameras that produce amazing video are the key contributors to making iStock's stock video downloads take off. With the market for stock video growing rapidly, competition is heating up from well-funded players like Fotolia and Thought Equity Motion, which specializes in video collections from premium providers like MGM Studios, National Geographic and NBC News.
Still, with broadband's rise, and now mobile video's increasing popularity, the market for stock video seems like it has a lot of growth ahead. Clever companies continue to recognize how broadband creates different types of opportunities to distribute video to various end users.
What do you think? Post a comment now.
Ever find yourself shopping online and wish that there was a video that showed you the product's key features and benefits, and maybe even showed the product in action? And assuming that the video educated you and in turn increased the likelihood that you actually followed through and bought the product, wouldn't that delight the online retailer because it increased their conversion rate?
Invodo has built up a library of 20,000 product videos from 1,900 manufacturers that it is now syndicating for free to over 1,000 online retailers like Amazon, Sears, Buy.com and others. Craig said that they've been able to build their video catalog in less than a year primarily by sending crews to industry trade shows, where they arrange to have company reps explain their products on camera. Though there was nothing fancy about the videos I randomly selected to watch, they did convey valuable product texture and would have helped in the purchase consideration process.
My first inclination was to think Invodo should be charging for the videos, all the more so if they help drive higher conversion for the online retailers. However, Craig and Trey explained they've been most focused on scaling distribution and simply giving the video away to retailers for free is the best way to do that. That makes Invodo another example of the free business model that Chris Anderson discussed in his original Wired article, which will released as the book "Free" in a few weeks.
But giving away the core product (both the content and platform), with the goal of upgrading the customer to pay for premium features (the so called "freemium" model), means Invodo's business model depends on identifying valuable premium features that retailers will be willing to pay for.
There are two premium paths the company is pursuing. First it is offering a "buy now" button in the videos, which supports impulse buying, raising conversion. And second, it is offering an embedded player, so the video plays within the retailer's product page (as opposed to being a link to a new player window). The embedded player also provides features like ratings, sharing, etc. All of this too is meant to increase conversion rates.
With video becoming more pervasive and expected by users, it is only natural to think that retailers will embrace it as well. The only other company I can think of that is doing something vaguely similar is ExpoTV. But their product reviews are created by users, and I don't think they syndicate these videos to retailers.
It's clearly still very early days for Invodo and the category. I'll be curious to see how things work out.
What do you think? Post a comment now.
Brand Performance, a large player in the market for licensed character products for kids, is announcing Thwoop.com today, using broadband to invert the traditional model for content and commerce. I got a briefing from Ty Simpson, the company's CEO.
First a little background. Whenever you walk into a store like Toys-R-Us, you'll see rows and rows of products from hit kids programs like Ben10, Cars, Hannah Montana, etc. Licensing the characters and images from these shows to product manufacturers is a key source of revenue for program creators. If you have young kids as I do, you can attest to their popularity.
As Ty explains it, the industry is traditionally very hit driven. That means there is only a relatively small amount of room on TV for all of the character-driven programs that are produced. Similarly, big-box retailers allocate their finite shelf space to only the hottest properties. Ty recognized this latter scarcity several years ago and set up Tystoybox.com to focus exclusively on providing distribution for a broad range of licensed character products, many of which cannot get physical distribution. The site and its sister, AllAboardToys.com, have become the two largest independent online stores for these products.
With Thwoop.com, Ty is capitalizing on the scarcity of on-air shelf space for the programs themselves. The site aims to create a new kids entertainment experience, offering full program episodes of various kids programs along with trailers and other video. The first partner is NCircle, producer of Animal Atlas, Hermie & Friends and other shows. Thwoop.com's goal is to be a destination site where video can be seen and purchased, social networking and interactivity is promoted and user-generated product reviews are uploaded.
What's really unique here is that the whole site is supported by commerce, not advertising. On-air these programs are all ad-driven and the licensed products are considered ancillary. But Thwoop.com inverts the model, with commerce supporting the video. Ty explained that he's become a strong believer in broadband's potential to dramatically open up video availability, and that product sales will naturally follow. Presenting a strong user experience was a top priority, and Thwoop has partnered with Magnify.net to power the entire site. Magnify's CEO Steve Rosenbaum said his company is unveiling its "theater-mode" and full-screen player as part of the launch.
As a parent Thwoop.com raises some interesting questions. For example, my son is a Ben 10 fanatic. I like the idea of a site where he can watch the old episodes and immerse himself in the characters, and maybe even interact with other kids (assuming the right safeguards were in place). On the other hand, I have to admit, it scares the bejeezus out of me that he would get even more exposure to the licensed products. As my wife likes to remind me, we hardly need any more Ben 10 paraphernalia in our house...
Regardless, Thwoop.com is exactly the kind of new, innovative experience that broadband enables. Clever entrepreneurs like Ty recognize that broadband resolves traditional distribution scarcities, opening up completely new business models. When I put my VideoNuze hat on, I'm excited to see it launch.
What do you think? Post a comment.