Posts for 'Advertising'

Kiptronic, a dynamic ad insertion service provider for broadband-delivered video and audio has announced integrations with the two dominant ad management systems, DoubleClick's DART for Publisher and Microsoft's Atlas Ad Manager. This allows Kiptronic customers to traffic their ads from within these familiar ad management consoles beyond browser/PC-based environments.

Kiptronic plays an important role delivering ads against video that's increasingly consumed outside the browser/PC. These days video consumption is being fragmented to widgets, smartphones, downloaded apps like Adobe Media Player, gaming devices, Internet-connected TVs and more coming as the syndicated video economy gains steam.

While more viewership is obviously a plus for content providers, this new heterogeneity creates headaches for ad operations staff tasked with running the correct ads wherever the video is consumed. Kiptronic's secret sauce is inserting both in-browser and also in these disparate environments after recognizing their specific attributes. I'm only aware of one other company in this space, which is Volo Media, but as I understand it, they only insert in downloaded video.

Last week Bill Loewenthal, Kiptronic's President and CEO, and Jonathan Cobb, the company's founder and CTO briefed me on the new integrations as a follow up to a background call Bill and I had about a month ago. Kiptronic's customers are mainly premium content providers such as divisions of Fox, CBS, Time Warner and Sony BMG who place a high value on control and who have their own sales teams.

Kiptronic's key mantra has been enabling ad insertion to all these new environments without requiring any changes to customers' publishing processes. However, to date Kiptronic had required customers to use its proprietary management tool to insert their ads. For customers who use DART and Atlas, these new integrations now eliminate this step, likely boosting Kiptronic's appeal.

The whole concept of video consumption outside the PC/browser domain is a fascinating topic that content providers need to be mindful of. In the next couple of months Kiptronic is going to make data available showing the breakdown of all the places its ads are served. It's a pretty accurate data set given Kiptronic's role. Bill gave me a preview and it is definitely eye-opening. I'll be sharing the info as soon as it's available.

What do you think? Post a comment.

I was pleased to see comScore announce on Tuesday that beginning this month it will report two sets of numbers for online ad networks: "potential reach" and "actual reach."

Potential reach will represent the unduplicated visitors to all sites that an ad network has under contract to deliver ads to (based on written documentation), while actual reach will represent the number of ads actually served (based on a tagging mechanism that comScore will require the ad networks to implement to be counted). This is a welcome development, particularly in the intensely competitive video ad network space. In fact, it seems such an obvious move, one wonders why comScore has been so tardy in introducing it.

Followers of VideoNuze and other industry blogs know that comScore's measurement deficiencies recently set off a tempest after comScore ranked YuMe, one of the large video ad networks, #8 in reach in its Ad Focus report. With YuMe trumpeting its ranking, other industry players challenged it by noting that the full audience of MSN (a site that YuMe serves ads to) had been counted. The confusion was caused by the fact that comScore had not been delineating "potential" from "actual" reach or providing apples-to-apples numbers for all networks. Chastened, comScore re-ranked YuMe, sending it plummeting in the rankings.

All of this of course only served to create more confusion for media buyers who are trying to cobble together media plans that achieve their broadband video reach and frequency goals within budget, while minimizing their time invested. Though I'm a huge advocate of the ad-supported model dominating the broadband video landscape well into the future, I'm cognizant that the friction media buyers currently encounter is the single biggest challenge the ad model currently faces in its bid to scale and redirect spending from traditional outlets.

So comScore's new reporting is a step forward after two recent steps back. Let's hope for more forward progress.

What do you think? Post a comment.

I continue to be surprised that more long-form premium content providers have not pursued initiatives to slice and dice their programs into a non-linear user presentation. This is what "The Daily Show" has done at its site, deconstructing every episode into searchable clips. I think it's a big opportunity to drive more fan engagement, new ad inventory and provide insight about new programming ideas.

While this idea is a natural for archived sports and news programming, I think the model applies to scripted programs as well. Here's an example:

As I've written before, my wife and I were huge fans of "The West Wing" during its seven-year run on NBC. While we now own the full DVD collection, periodically I'll talk to someone about the show and reminisce about a specific moment from years back. (In fact, TWW seems cosmically related to the current election cycle, given the show's last narrative around 2 candidates - one younger and one older - battling to succeed Bartlet.) This spurs many of those, "boy, I'd love to see that scene right now!" moments.

So wouldn't it be awesome if NBC or Warner Bros. (its producer), or whoever has the rights, were to create a site where all the episodes were archived and fully indexed for searching? This would go far beyond the show's current lame-o web site. I could type in "Bartlet speeches," "Josh meltdowns" or even "C.J.-Danny fights" and instantly see collections of relevant clips.

Before you accuse me of being geeky, stop and consider that we all have our favorite programs and love to relive memorable lines and moments. I'd argue that a really vibrant community could be built at these sites, attracting traditional advertisers eager to continue their audience relationships. Then of course there's the opportunity to embed clips into Facebook and MySpace pages, extending the community further. And think about what this ongoing loyalty would do to drive up the value of broadcast syndication rights.

The big challenge here is indexing the archive. The process must rely heavily on accurate metadata generation, but in a highly scalable, cost-effective manner. That's a mouthful of requirements, so clearly this isn't easy stuff. Various players are trying to crack this nut; two which I've previously written about are Gotuit (which is announcing a partnership with Move Networks today) and EveryZing, but there are others too. Recently I've had briefings with 2 companies that are investing in this area and will have news in the coming months.

Long-from premium providers are facing an onslaught of competition from short-form alternatives while also commonly experiencing a shortage of available inventory. Non-linear presentations of their content addresses both these issues, while delighting loyal fans. I see this as an emerging and sizable opportunity.

Am I missing something here? Post a comment now!

Citysearch, the big online local information company, is making an aggressive push into video. The company is currently running a new promotion which allows its merchants to have a complimentary video made for them, which enhances their Citysearch listing, and can also be used on their own web site and on YouTube.

I'm always on the lookout for ways video can drive more revenue, and Citysearch's effort (originally begun in early '07) qualifies on at least two levels. First, it's a valuable enhancement to Citysearch's pay-for-performance ad model, increasing the ARPU the company derives from its merchants. Second, it appears to be a bona fide differentiator for merchants in helping them attract new business. And of course it helps deliver on users' growing expectations for video experiences.

Last week I spoke with Brian McCarthy, Citysearch's VP of Merchant Product to learn more about how the program works. I also spoke to Marc Edward, who runs Marc Edward Skincare in West Hollywood, CA, which is a merchant that's been offering video in its Citysearch listing for over a year.

Under the current promotion, Citysearch will make a 60-90 second video for its merchants for no cost to them. Citysearch has partnered with 3 production firms, TurnHere, StudioNow and GeoBeats to produce the video, which Brian said cost under $1,000 apiece. The merchant is involved in the editing process and then the video is added to the merchant's listing. When a user watches the video for at least 10 seconds, the merchant is charged a fee ranging from $.40 to $2.00, as part of Citysearch's "multimedia package."

Back on July 22nd I passed on news from comScore that YuMe had broken into the top 10 ad networks, reaching almost 135 million unique visitors in June. Not so fast it turns out. As reported well by both NewTeeVee and Online Media Daily over the few days, comScore has quietly revised YuMe's reach down to 59.2 million uniques, which would actually land it at number 32 on comScore's June Ad Focus report.

The change results from re-assigning some traffic from major YuMe client MSN. comScore had given YuMe credit for all of MSN's page views, when in fact YuMe was only serving ads on certain sections of the portal. So comScore has decided it's more accurate to give YuMe credit solely for those pages.

Needless to say, YuMe is not happy about the change and is protesting the new numbers. Its argument is that with comScore's revised approach, YuMe traffic is being counted differently than all other ad networks. For now it continues to prominently showcase the original comScore numbers on its home page. YuMe seems determined to see a revision to the revision, so we'll all have to see what comScore does next.

There are many posts on VideoNuze about the various ad networks and how they seek to differentiate from each other. Traffic is certainly one of the key battlegrounds, so it's no surprise this skirmish has broken out over the comScore numbers. One is tempted to feel some sympathy for media buyers...if the measurement firms haven't yet figured out how to accurately count the networks' relevant traffic, how are the agencies expected to buy on behalf of their clients?

Another sign of video advertising's continued growth is that video ad network YuMe has broken into comScore Media Metrix's Ad Focus top 10, reaching almost 135 million unique visitors in June. The full stats are in this comScore release. While obviously a big win for YuMe (which I've previously written about here), a larger point that I think is worth noting is that this demonstrates how pervasive broadband video is becoming for all publishers. Going forward I expect YuMe's reach to continue to rise, and also for other video ad networks to keep moving up comScore's list.

The trend toward widespread video syndication to small-to-medium sized web sites continues to gain momentum.

Two recent initiatives - plus others I expect are still to come - point to the increasing likelihood that broadband video's eventual distribution model will look far different from traditional, tightly-controlled approaches. I'm becoming more convinced that "syndicated video economy" concept I sketched out in March is where the market is heading.

Now instead of distributing ads, Google is looking to take the AdSense model a step further by distributing video content (along with ads) to myriad web sites hungry for video, and cash. First up are comedic webisodes from Seth MacFarlane (creator of Fox's "Family Guy"). Google's proposition to small, and even larger sites, makes sense: we'll give you free high-quality video content, all supported by pay-for-performance ads. You get great content and can make money at it. What's not to like? Not much in my opinion. It seems like such a compelling model that one wonders why Google hasn't done this earlier. In fact, they did. Back in August 2006, Google announced a test with MTV to do exactly the same thing (the ensuing YouTube-Viacom litigation no doubt scotched the test). Hopefully this time around Google will have more luck.

Meanwhile, hyper video syndication is not just for the mighty like Google. Consider Jambo Media, a two year-old company with 12 employees which has built out a syndication network now generating over 2 million video views per day. Web sites like BestCelebGossip.com, Epigee.org and MensTech.com may not be household names, but, as Jambo's CEO and co-founder Rob Manoff explained to me, they are representative of virtually unlimited long tail web publishers eager for video, but unable or unwilling to create it themselves.

Rob and his team of ex-affiliate marketing and advertising veterans have created the Jambo Video Network by licensing video from sources such AP, iVillage, Ivanhoe Broadcast News, and then packaging them into "channels" for distribution in a Jambo video player. Of course ads come along with the video content (though Jambo has a separate ad-free "JamboCast" white label solution in the works too).

Affiliate sites can login to their Jambo account to select which channels to receive while customizing the look and feel of the video player. Over 100 sites have affiliated, which Rob believes will grow to several hundred by the end of '08, driving a projected 5 million views/day. Rob said that sites earn $2-4 effective CPM with revenue per day ranging from $10-30 on the low end all the way up to $1,000/day on the high end.

Jambo is pursuing a space that syndicators like Roo, Voxant, ClipSyndicate, Newsmarket and others have been in for a while. All of these players, along with now Google, are doing what Rob articulates well: creating video ad inventory where none previously existed. Such is the power of syndication in the frictionless Internet environment. And why smart content providers - from startups to established TV networks - are recognizing that increasingly, syndication is where the broadband market is heading.

The Diffusion Group, a leading analytics and advisory firm specializing in broadband media and the digital home, is releasing a new report tomorrow entitled, "Online TV and the Future of Digital Video Advertising." VideoNuze is offering half a dozen slides as a complimentary download (note, VideoNuze has no financial interest in this report).

Click here to download slides

Though I haven't seen the full report, in a conversation with Mugs Buckley, the report's author (and also periodic VideoNuze contributor), I got a sneak peek at some of its key conclusions. The report is based on TDG's proprietary consumer research and modeling, interviews with industry executives, data from other firms and other secondary research. In sum, the report pegs '08 video ad revenue at $590 million, growing to $9.98 billion in 2013.

To establish some order, Mugs first identifies four types of video, estimating each one's current market share in terms of stream count and ad revenue and then forecasting them through 2013. The four types are "user generated video," "long-form," "short clips" and "other" (which includes all paid models, adult content, corporate and educational videos, etc.).

No surprise, UGV currently accounts for 42.4% of streams, but only 3.7% of ad revenues. Conversely, long-form accounts for only 2.2% of streams but 41.6% of ad revenues. Note the disparity would be lower if, instead of using streams (where one 40 minute TV show stream is equivalent to one 10 second clip stream on YouTube), the report used "minutes viewed" or another consumption-centric metric. I agree with Mugs though - in either case, the underlying point would still be true - long-form, higher-quality video is going to be where ad dollars are and will be concentrated.

The report's forecast reinforces the point: by 2013, long-form's stream share will roughly double to 4.1%, with its share of ad revenue growing to 69.4%. Conversely UGV's stream share grows a little bit, but its ad share shrinks to 1.8% . A wildcard in this mix is the role of short-clips, defined as 2-5 minute videos including everything from news/entertainment/sports videos to webisodes. Mugs is bullish on this segment, with its lower costs to produce and ability for users to watch spontaneously. This is where a lot of market activity and original programming is happening and it's still early to gauge its acceptance by users and advertisers.

A key input to the revenue forecast is the underlying CPM forecast. Mugs said her approach was to be relatively conservative with CPM's predicting little more than inflation-adjusted growth. For long-form that means CPMs growing from $40 today to $46 in 2013, which feels pretty modest, especially if targeting and engagement tactics pay off (see more on Disney's efforts in this post). On the UGV CPM forecast, it's important to note the $15 CPM refers to YouTube's announced CPM target for partners' video, NOT pure UGV.

There's lots more info in the slides, and if you're interested in the whole report, it's best to contact sales@thediffusiongroup.com or 469-287-8050.

Click here to download slides

Though broadcast TV networks have been aggressively pushing their shows online, there has been simmering angst about what impact this will ultimately have on their traditional economics.

I have explored this issue recently in "Does Broadband Video Help or Hurt Broadcast TV Networks?" and in two posts on Fox's "Remote-Free TV" initiative here and here. NBCU's CEO Jeff Zucker has helped to stoke this concern, publicly calling broadcasters' #1 challenge the risk of exchanging "analog dollars for digital pennies."

Thus I was both a bit surprised, but also encouraged, to hear Albert Cheng, Disney/ABC's EVP of Digital Media tell me in a recent briefing that despite the fact that online revenue per program per eyeball is currently less than it is for on-air, he's confident that online will eventually catch up and surpass on-air. I don't regard these comments as idle boasts. A thick PowerPoint deck covering its online video strategy, which Disney/ABC shared with me, reveals the meticulous thought and in-depth audience research that is guiding Disney's online video initiatives. Not to mention ABC.com is the most-used network web site.

Cheng is quick to point out that Disney/ABC has followed a careful and consistent strategy since it moved into online distribution a few years ago (note Disney/ABC was the first network to work with iTunes and first to offer programs for free. Other networks quickly followed). The focus has been on continued learning and refinement.

From a strategy standpoint, Disney/ABC's video player, powered by Move Networks, is the centerpiece. The focus is on delivering a high-quality, consistent user experience in which ads are engaging, but not intrusive. While other networks have received more ink for their syndication efforts Cheng is quick to point out that access to Disney/ABC's player has always been open, allowing other sites to refer their users, if not actually integrate the player.

By making an RSS feed available of its online programs' meta-data, Cheng believes Disney/ABC can achieve much of what others gain through syndication deals (see how Hulu displays results for a "Lost" search below, subtly noting "Watch at ABC" This is the same concept I noted in my recent Hulu vs. Comcast post), while avoiding the downsides of ad sales conflicts, business rules implementation and delivery overhead.

By controlling their own ad inventory, Disney/ABC avoids the sometimes one-sided revenue sharing deals widely-discussed in the industry (Hulu alone is rumored to keep 90%) and the channel conflict that inevitably results from having two sales teams calling on the same media buyers. Cheng does see a role for online aggregators, but mainly for library or off-network product, especially as a backstop for traditional syndication.

Cheng's rationale for broadband's eventual revenue superiority to on-air ultimately boils down to this: since broadband can offer both superior targeting and engagement vs. on-air, by definition it deserves higher pricing. But getting to that vision from today's reality is where Disney/ABC's hard work of evangelizing to advertisers and ongoing testing is key (and where the company's recently announced "Ad Lab" comes in).

What do you think? Post a comment and let everyone know!

If you've ever hungered for insight about a specific video's performance beyond just how many views it has received, Visible Measures is a company after your heart. An independent firm that measures the reach and engagement of broadband video across the Internet, VM heralds an era of ultimate insight into how each and every video performs when it enters the Internet's fast-moving current.

By integrating its code with the video player, VM collects data on session length, drop-out points, rewind activity, click-throughs, viral distribution, geographic usage and other metrics. Think of VM as "big brother-esque" (in a positive way) in tracking a video's "true reach" as VM puts it, supplying a dizzying array of data to content providers and advertisers. The data is presented in intuitive, graphical formats that analysts can parse and sort to understand the video's ROI and what can be done to improve performance next time around. The company is already tracking over 80 million videos in its database.

None of this is to suggest that VM's data will replace programmers' and advertisers' creative instincts, but it would surely provide some real world augments to help offset the inherent guesswork involved in the creative process. (for more specifics about how VM works, see the below video from DEMO '08)

For advertisers specifically, today VM is announcing both its "VisibleCampaign" solution to measure ad campaigns' performance and also a collaboration with Dynamic Logic to track how these campaigns affect a brand's perception. Both initiatives are important in helping advertisers and agencies gain more insight about the broadband video medium and why it's important to invest. As someone who has expressed concern that the broadband ad business needs to mature quickly to support the myriad startup and established media companies relying on it, VM's will surely help decision-makers across the board gain comfort in shifting over more of their budgets.

VM is a perfect example of innovation needed to help optimize a new medium as it takes root. The company has raised $19 million through three rounds and is based in Boston. Based on what I've seen I'm quite enthusiastic about its odds of success.

The crew over at Hulu must be gleefully fist-bumping each other this week as Hulu scored a key strategic and public relations coup in adding to its lineup two of Comedy Central's most popular programs, "The Daily Show with Jon Stewart" and "The Colbert Report." Though officially positioned as a test, Hulu still deserves big-time kudos as the deal is an endorsement of its value proposition.

The deal and Hulu's execution illustrate a larger point that I've been making for a while: one of broadband's three key disruptions is that it enables new aggregators to gain an edge on larger incumbents by changing the dynamics of competition. To be more specific, in this case, I think that Hulu has out-executed Comcast, America's #1 cable operator by delivering new value to consumers and gaining important PR momentum. Here's why:

Second, and more concerning is that, as a Comcast digital subscriber, when I tried to find The Daily Show and Colbert in Comcast's VOD menu, all that is available are five older Colbert clips and 1 older Daily Show clip. My guess is these haven't been updated in a while. No full-length Daily Show or Colbert programs are available at all in VOD.

While the Comcast spokesperson told me that the company works closely with its programming partners like Viacom to figure out the optimal mix of programming to make available on VOD, I think an unavoidable conclusion here is that Comcast (and other cable operators) is constrained by its inability to monetize VOD programming with advertising (what this week's "Project Canoe" is meant to address) and to easily add new programming on the VOD menu. These programming gaps create opportunities for upstarts like Hulu to capitalize on.

It may be unfair to zero in so narrowly on Comcast's execution with Daily Show/Colbert, yet things weren't much different when I searched for MTV's popular "The Hills" on Hulu, Fancast and Comcast's VOD. While Hulu doesn't appear to have a deal for full episodes of "The Hills" it masks this cleverly by providing thumbail images and easy navigation back to MTV's site where the video lives, for over 50 episodes (this is tactic Hulu uses for ABC's shows as well). On the other hand, Fancast displays just 5 full episodes, 2 from this season and 3 from last. And on VOD there are also just 5 episodes, though all from this season.

I think it's pretty significant that Hulu, a site that only went live 3 months ago can not only gain access to hit Comedy Central programs like Daily Show/Colbert, but can execute quickly. Hulu is using its advantages - flexible technologies, interactive features (clipping, embedding, sharing), monetization capability, savvy PR and startup pluck to compete with far-larger incumbents like Comcast.

Of course Comcast racks up billions of VOD views each year and has vast resources, making it an important player in on-demand programming. Yet Hulu has managed to make Comcast's advantages look a little less intimidating. I asked the Comcast spokesperson about this. She acknowledged Hulu's progress, but maintained that Comcast believes its mulit-platform approach is stronger.

In the big picture that's true, but when it comes to winning consumers' hearts and minds, it's often execution, not broad strategy that carries the day. And don't forget, when Hulu is unshackled from the PC - with its content freely riding Comcast's broadband pipes all the way to the TV - execution will matter even more.

This week Hulu provided a textbook example of how broadband-only aggregators can gain a foothold against well-established incumbents. Comcast and other incumbents should be taking notice and getting their game on.

What do think? Post a comment and let everyone know!

Late last week, news broke that Heavy Media, which operates Heavy.com, one of the leading destination sites for men 18-34 was spinning off its Husky Media unit as a standalone ad management and network company. I found the deal intriguing and followed up with David Carson, co-CEO to learn more and see how it plays into larger trends I've been tracking.

Broadband ad networks already compete vigorously with each other to build out their publisher networks and cultivate brands and agencies to obtain a share of their spending. The networks are continuously enhancing their technology and trying to optimize their various ad units to demonstrate the superiority of their approach. And as I recently wrote in "Tremor, Adap.tv Introduce New Ad Platforms," some firms are now enabling ad aggregation in an effort to improve their publishers' effective CPMs.

With this context in mind, a key question is "does the world really need another video ad management and network?" David patiently explained that they've received a lot of outside interest in their units, namely the "barn doors" that are shown before the video plays, the subsequent skin that remains on the sides while the video plays, and the playlist-like queuing of video with ads judiciously interspersed (which Heavy calls its Video Guide). Heavy has avoided pre-rolls entirely. This interest spurred them to separate Husky.

David believes that each of these units offers superior value. As compared with pre-rolls, where David said "bounce" or early termination rates can be 50% (resulting in the actual content never being seen), with Husky's approach, there's a 90% completion rate, and particularly when users come through the Husky "Video Guide", the number of videos consumed can be 3-6 times greater. David also said they're seeing click-throughs averaging 1.6%, above industry norms.

So of course the next question is, if these units perform so well, what's to stop others from introducing them as well? In fact, David would encourage this, as he believes it would help educate the market and maybe help establish these as preferred units. As long as Husky continues to get its fair share that would be a win. Husky has patents on the skin, and how it works with various video players.

David said investor meetings are underway and he anticipates the company completing its own financing. Husky will have its own separate management team. Heavy also announced last week a syndication deal for its Burly Sports show to CBSSports.com, and, no surprise, Husky will be the ad platform. To the extent that Heavy can do other syndication deals where Husky gets included, that will help it gain market share.

Clearly there continues to be a huge amount of experimentation in the broadband video ad market. The Husky deal further shows that sometimes developing technology for your a site's own use can, if successful, end up creating larger financial value.

Two-and-a-half weeks ago, in "Fox's 'Remote-Free TV': Broadband's First Adverse Impact on Networks" I asserted that Fox's decision to cut in half the number of ads it will include in two new programs was influenced by the limited ads shown in networks' broadband initiatives.

By giving "RFTV" a try, Fox was catching on to the idea that fewer commercial interruptions improves the viewer experience. I pointed out that the challenge RFTV posed is that cutting ad time in half means that Fox would have to double the CPMs it charged just to remain whole. Could Fox do that?

Yesterday's piece in Adweek provided at least a preliminary answer: No. Adweek, quoting unnamed media agency sources, reported that Fox is getting only a 35-40% premium for the "RFTV" ad inventory. If my math is right that would imply that Fox is grossing 30-33% less total ad revenue than it would have under its traditional ad model.

Broadcast networks, having moved much of their programming online, have engendered new viewer expectations for fewer ads. The early results from Fox's "RFTV" initiative may indeed be evidence that these new expectations are at odds with sustaining broadcasters' traditional margins and profits.

With this week's news that Veoh has garnered another $30 million in financing, by my count the total amount raised by the top broadband video aggregators now exceeds $366 million. The breakdown is below, according to publicly available data I've pulled together.

While definitions of who should be included in this category are admittedly fuzzy, I consider broadband aggregators to be companies that are providing a broad-based destination site that focuses mainly on professionally-created video. Often these sites include broadcast network and cable TV programming, but they don't have to. I'm sure plenty of readers have their own definitions and that I've overlooked some, so feel free to post a comment to add others to the list.

Savvy investors seem to have an enormous appetite for these kinds of companies. Veoh, with 28 million monthly unique visitors, and others have demonstrated their ability to attract lots of eyeballs. Yet all of these companies are solely reliant on advertising, and that of course makes begs the question how well these companies can convert their traffic to real revenue and therefore become profitable, sustainable businesses?

Since all of these companies are private it is hard to assess their momentum. Yet in a recent panel I moderated at Streaming Media East, Mike Henry, SVP of Ad Sales for Veoh explained the range of current challenges. Chief among them is getting traditional TV media buyers to clearly understand the broadband medium, how to buy into it and how to measure its performance. These are crucial matters since the biggest source of broadband ad dollars will no doubt come from brands shifting their TV spending to broadband.

Of course, to the extent that these companies can continue raising big money, they're buying themselves more runway. Complicating matters is that all of these sites live in the long shadow of YouTube, which alone still accounts for around 40% of all video views per month. Then there are big players like Yahoo, MSN and AOL and recent entrants like Adobe which are vying for their share of the video pie. But at some point these companies will have to show they can make money and survive.

With all these crosscurrents, it will be interesting to see how these companies' stories unfold.

At the recent Cable Show in New Orleans, Comcast's president Steve Burke said that Project Canoe's new CEO would be announced on June 1. However, June 1 has come and gone without any news. Project Canoe, which Mugs covered for VideoNuze recently, is the cable industry's new interactive ad system, meant to draw national advertisers to cable's VOD and other advanced video delivery platforms. A rumor has circulated widely that David Verklin, former CEO of Aegis North America (a large advertising service firm) would get the nod, but nothing has been made official. I haven't heard what is causing the delay. If you know, post a comment...

Looking back over two dozen posts in May and countless industry news items, I have synthesized 3 key topics below. I'll have more on all of these in the coming months.

1. Broadband-delivered movies inch forward - breakthroughs still far out

In May there was incremental progress in the holy grail-like pursuit of broadband-delivered movies. Apple established day-and-date deals with the major studios for iTunes. Netlix and Roku announced a new lightweight box for delivering Netlix's "Watch Now" catalog of 10,000 titles to TVs. Bell Canada launched its Bell Video Store, complete with day-and-date Paramount releases, with others to come soon. And Starz announced a deal with Verizon to market "Starz Play" a newly branded version of its Vongo broadband subscription and video-on-demand service.

Taken together, these deals suggest that studios are warming to the broadband opportunity. This is certainly influenced by slowing DVD sales. Yet as I explained in "iTunes Film Deals Not a Game Changer" and "Online Move Delivery Advances, Big Hurdles Still Loom" broadband movies are still bedeviled by a lack of mass PC-TV connectivity, no real portability, well-defined consumer behavior around DVDs and the studios' well-entrenched, window-driven business model. Despite May's progress, major breakthroughs in the broadband movie business are still way out on the horizon.

2. Broadcast TV networks are embracing broadband delivery - but leading to what?

Unlike the film studios, the broadcast TV networks are plowing headlong into broadband delivery, yet it's not at all clear where this leads. In "Does Broadband Video Help or Hurt Broadcast TV Networks" and "Fox's 'Remote-Free TV': Broadband's First Adverse Impact on Networks?" I laid out an initial analysis about broadband's pluses and minuses for networks. I'll have more on this in the coming weeks, including more in-depth financial analysis.

On the plus side, in "2009 Super Bowl Ads to Hit $3 Million, Broadband's Role Must Grow," "Sunday Morning Talk Shows Need Broadband Refresh" and "Today Show Interview with McClellan Showcases Broadband's Power," I illustrated some opportunities broadband is creating. On the other hand, "Bebo Pursues Distinctive Original Programming Model" and "More Questions than Answers at Digital Hollywood" explained how exciting new programming approaches are taking hold, challenging traditional TV production models. Broadcasters are in the eye of the broadband storm.

3. Advertising's evolution fueled by innovation and resources

Last, but hardly least, I continued on one of my favorite topics: the impact broadband video is having on the advertising industry. Over the last 10 years the Internet, with its targetability, interactivity and measurability has caused major shifts in marketers' thinking. With broadband further extending these capabilities to video, the traditional TV ad business is now ripe for budget-shifting. We'll be exploring a lot of this at a panel I'm moderating at Advertising 2.0 this Thursday.

In "Tremor, Adap.tv Introduce New Ad Platforms" and "All Eyes on Cable Industry's 'Project Canoe'" (from Mugs Buckley), key players' innovations were described along with how the cable industry plans to compete. Content providers are being presented with more and more options for monetizing their video, a trend which will only accelerate. Yet as I wrote in "Key Themes from My 2 Panel Discussions Last Week," many issues remain, and with so many content start-ups reliant on ads, there may be some disappointment looming when people realize the ad market is not as mature as they had hoped.

That's it for May. Lots more coming in June. Please stay tuned.

Last week I moderated 2 panel discussions, one for Streaming Media East in New York, and the other for MITX, the Massachusetts Innovation and Technology Exchange, in Boston. In the former, "Reinventing the Ad Model Through Discovery and Targeting" and the latter, "Driving Audiences to Your Online Video Content: Strategies for Success in a Crowded Market" panelists discussed many of the key themes I continue observing in the broadband video market.

To the disappointment of many, it looks like there won't be any big news about the cable industry's "Project Canoe" at the Cable Show convention in New Orleans this week.

Project Canoe is a high-profile partnership among the nation's six largest cable companies (Comcast, Time Warner Cable, Cablevision, Cox Communications, Charter Communications and Bright House Networks) to enable national interactive advertising campaigns to be executed across the companies' cable operations. The code-name Canoe is meant to emphasize that cable operators are working together in the same boat, so to speak.

For the past nine months, the partners' Canoe leads have been meeting weekly. Once a top secret initiative, Canoe's existence was leaked in a September, 2007 Wall Street Journal article. But since then there has been no new information, leading to speculation about how much progress has been made.

Yet Canoe remains a top priority throughout the industry, and for good reason. With big advertisers like GM and Intel shifting their once big-budgeted TV ad campaigns to the Internet in significant sums, it's key that the cable operators need to figure out a way to not only protect the $5 billion or so that they generate in spot-cable advertising today, but also to increase their piece of the $70 billion dollar TV ad spend or cut into other slices of the massive US total ad spend pie. The next 3-5 years will be critical as cable advertising, the Internet and broadband video jostle for advertisers' affections.

The buzz in New Orleans suggests advertisers and agencies are excited about Canoe, though its development seems slower than they prefer. Why the slow progress that's perceived? Several operators stated that integrating the infrastructure required to execute Canoe with cable's legacy systems is hard stuff. No doubt. Then of course there are other key priorities weighing on the industry resources, such as the February 2009 digital transition.

Meanwhile, the Internet and broadband video advertising continue steaming ahead, giving advertisers and their agencies the measurement and targetability that they yearn for on TV. Cable operators have been stymied in their ability to jointly offer advertisers easy access to a nationwide or near-nationwide footprint, especially critical for Video on Demand. Canoe addresses this and other opportunities, in part by creating a set of standards for all to follow.

The only Canoe "news" at this week's Cable Show came from Comcast's Steve Burke, who stated that a CEO would be announced on June 1. Comcast is a key player in Canoe, funding between $50-70 million of the $150 million initial investment. Rumors have swirled that David Verklin, who recently stepped down as CEO of Aegis North America (a large advertising services firm) will assume the position of CEO. If true, that could be the news to break on June 1.

Why is Fox doing this and why does it matter? According to TV Week's coverage, Mr. Liguori said: "The broadcast business needs a jolt. This gives viewers one less reason to change the channel." The first statement is certainly true, but the second seemed off somehow. If the programming's really compelling, it seems unlikely that viewers are going to change the channel (when did you ever change the channel in the middle of "24" for example?).

Switching channels doesn't seem to be the issue; rather, I think the more pressing concerns behind RFTV are ad-skipping from DVR usage and broadband's growing influence. But on the DVR side, if I'm a viewer watching programs like these in recorded mode, are fewer pods or shorter ads going to make me any less inclined to hit the fast-forward button to skip the ads? Doubtful. I only need to retrain myself to hit the "play" button sooner.

If that's the case, then it seems to me that "RFTV" should be interpreted as a response to viewers' preference for broadband's "limited commercial interruptions" model. But when Fox cuts these programs' on-air ad time in half, it needs to double its fees per ad to remain even. Fox is now talking to advertisers to see if it can turn that goal into a reality. Maybe it can. Maybe it can't. If it can't, then these 2 new programs' on-air monetization will be lower than traditional expectations. Could this mean that "RFTV" may actually end up representing broadband's first demonstrably adverse impact on the network TV business? Quite possibly.

In my post last week, "Does Broadband Video Help or Hurt Broadcast TV Networks?" I argued that while broadband offers short-term benefits, in the long-term it's going to force broadcast TV networks to fundamentally adjust to different economics. Broadband's limited commercial interruptions means far fewer ad slots to monetize. RFTV may be a harbinger that this approach may now be coming to on-air as well.

Though broadband delivery is still nascent, its implications are far-reaching. In this case, having moved most of their prime-time programs online, networks now need to show it brings positive results. That will be interesting to watch. Longer-term may be nearer than I thought.

What do you think of Fox's "RFTV" initiative? And how does it impact the network's business? Post a comment and let everyone know!

Yesterday's article in the NY Times, "In the Age of TiVo and Web Video, What is Prime Time?" was the latest of many about the changing landscape of broadcast network TV. An underlying question that receives a lot of attention, yet little in the way of clear-cut conclusions: Does broadband video help or hurt broadcast TV networks?

The jumble of conflicting data and opinions on this topic (as well as the related topic of DVRs' impact on the networks) is causing plenty of speculation during this important upfront week of when billions of dollars of networks' ads are bought and sold.

Here's a synopsis of how I think proponents of each would defend their answer:

Broadband video helps: The world is changing - consumers are more empowered than ever and it's pointless to resist. Broadband is a great way to catch up on episodes missed, conveniently sample programs, engender interactivity, transform viewers into viral promoters, etc. More exposure will translate into more on-air viewership. Plus as broadband audience size builds ad revenue will as well. Network programming is and always will be the most watched, most valued source of video entertainment and with broadband opening up all kinds of new revenue opportunities, there's ample reason to be optimistic.

Broadband video hurts: Broadband kills networks' success formula, driving profitable on-air viewership to profitless broadband viewership. It's pie-in-the-sky thinking to believe that broadband revenues will ever catch up. Since only a limited amount of ads can be included in online broadcasts, even the higher CPMs received per ad deliver nowhere close to the revenue per episode per viewer as the on-air model does. All the interactivity and engagement in the world will never offset this shortfall. As more programs move online and viewers can eventually watch these right on their TVs, the shift from on-air to online consumption will only accelerate, causing permanent erosion to the traditional economic formula.

So which is it - are networks helped or hurt by broadband? I think the answer is short-term it helps, but long-term it hurts. In the short-term, there is evidence that broadband expands audiences. For example, The Office's premiere last fall 9.7 million people tuned in, but another 2.7 million watched online.

Expanding viewership is great, but what happens to networks' revenues if next fall 7.7 million watch on-air and 4.7 million online? And 3 years from now, 5.7 million on-air and 6.7 million online? You can count on viewers to gravitate to the optimal viewing experience, and if online further improves, expect more eyeballs to shift. Again, since there are fewer ads online, the only way for total network revenues to keep pace are to show more ads online (see ABC's plan on that front), dramatically raise CPMs and/or dramatically raise viewership. My guess is that even the most optimal mix of these three will not deliver enough to offset on-air's revenue decline.