Posts for 'Advertising'

On Friday, AP carried the news that Google intends to stop offering paid downloads at Google Video and that it will discontinue support for any downloads made since its launch. Thus ends one of the most anachronistic initiatives I've observed in the broadband video industry.

I was at CES in January 2006 when Google co-founder Larry Page delivered a keynote in which he launched Google Video Store. The press release is here. My recollection of the event is still quite vivid. First, it was such a mob scene that just finding a place to watch the speech was an exercise unto itself. I ended up watching it in a courtesy tent packed cheek-to-jowl with hundreds of others.

As Larry introduced Google Video Store, I kept thinking to myself, "How is that a company with Google's IQ could have made such a startlingly bad product decision?"

Go back to that time for a moment, and imagine that you are Google. You are the foremost company in the world at monetizing content through advertising. You have the ability to meet with the CEO of every major media company in the world -- companies whose video is disproportionately supported by advertising. You have the opportunity to suggest trials, experiments and potentially longer-term deals to bring these companies' video online in an ad-supported manner. You can tantalize them with online riches beyond what they currently collect on-air. And you can be their trusted partner, with the Internet's leading technology, to help figure it all out.

(By the way, at the time, Google's official word was that their choice of the paid model was the only way they could get their hands on full length programs. Yet, just 3 months later, Disney/ABC announced online distribution of ad-supported full length programs. So this was clearly already in the works before January, 2006).

Instead of doing all of this though, you decide to launch using a commerce model, thus completely turning your back on all of the company's massive online advertising horsepower. In doing so, you choose to compete with Apple's iTunes, which has dominant market share and is seamlessly married to the wildly popular iPod. And in an act of arrogance and silliness, you decide to launch your own player, thus rendering all of the premium video incompatible with WMP, Flash, Real and other devices.

And yet, all of this is exactly what Google did. Somehow it managed to persuade premium content providers like Sony BMG, the NBA and Charlie Rose to partner. And it even managed to get Les Moonves, CBS's CEO to come on stage with Larry and make a fawning speech about how excited he was to be a part of all this action.

Now in August, 2007, 20 months later, Google Video Store is dead. Hallelujah. What a ridiculous distraction it has been. I have written over and over that I believe Google is one of the best-positioned companies to exploit broadband video. And yet, like Yahoo most prominently, I still view Google (outside of its YouTube acquisition) as all thumbs in this important new market.

For example - whatever happened to Google's deal with MTV to syndicate its content through the AdSense network? Did anything important come out of that, which might be used for other partners? What's going on with "click-to-play" video ads? And, any updates on Google for TV ads announced in April with EchoStar? Then there's the overhang of the Viacom lawsuit and the introduction of ‘fingerprinting' technology from Google to deter copyright violators. Recently it's looked like its introduction is imminent, and yet no firm timetables have been established.

I'm still expecting big things out of Google in the broadband video area, and I was encouraged to see Gabriel Stricker say in the AP piece that "The current change is a reaffirmation of our commitment to building out our ad-supported...models for video." I hope Google means it.

• Golf Channel “The Drive” Premium Membership - $29.95/year (lots of instructional video – makes sense to charge)
• CourtTV “EXTRA” - $5.95/mo (feeds of multiple trials simultaneously, for the armchair criminologists among you)
• Weather Channel “Desktop Max” $29.99/year – (really the ad-supported Desktop service, but minus the ads, and also more comprehensive than just video)

I was at Streaming Media East today, moderating a session (“Broadband Video: What’s the Formula for Content Success?). First off, kudos to Dan Rayburn and the SM team – there was a ton of energy at the conference, lots of exhibitors and great sessions.

I got a chance to sit in on Martin Niesenholtz’s keynote. As many of you know, Martin’s the longtime SVP, Digital Operations, for the New York Times Company.

• 5M streams/month – up 3x from a year ago
• 20 people dedicated to video
• 100 new video pieces created/month

Martin shared a back-of-the-envelope analysis he’s done to back into how many streams the Times needs to provide to generate $30M in annual revenue from video. His calculation: 60M streams per month, or 12X today’s rate. I didn’t agree with all of his assumptions (for example he assumed $60 CPMs, which is too high, yet only a 1:1 ratio of ads:streams, which I think is too low given the opportunity to surround an in-line video player with display ads), but I did think he was in the ballpark.

Google is finally starting to ramp up the use of its AdSense distribution network to deliver video. As today's NYTimes piece describes, Dow Jones, Conde Nast and others are participating. This follows on previous announcements with MTV, Sony BMG and Warner Music Group. As I said in "7 Broadband Video Trends for 2007", Google is extremely well-positioned to lead the nascent video syndication market by leveraging both AdSense and AdWords. Clearly while the major networks grapple with how to deal with Google/YouTube, other media companies seeking to harness Google's distribution might are moving ahead.

Chicago Tribune article suggests that user generated content producers being paid for their works will soon be ubiquitous. Of course Revver and others have been doing this for a while now. Steven Starr from Revver raises the “recognition vs. reward” question that undoubtedly passes through any UGC producer’s mind.

I’ve said for a while that if someone had laid the YouTube business plan next to the Revver business plan back in 2005, logic would have suggested that Revver would have better prospects given its willingness to share revenues with producers (thereby creating more incentive to post there).

However, what would have been missing from that logic would be the 2 things that I believe made YouTube an early (and big) winner – namely its willingness to push the envelope in allowing copyrighted material to be posted on its site and its superior user experience. Having won the first battle, YouTube appears poised to overlay the financial incentive long missing for content producers. If well-executed, this should make the landscape even tougher for all the others to succeed.