Posts for 'Scripps'

  • New Data Indicates Almost Half of Online Viewers Watch Pre-Roll Ads Even When They Can Choose Not To

    Two recent data points share a common, though somewhat surprising, conclusion: almost half of online viewers watch pre-roll ads to the end even when presented with the choice to opt out and skip the ad entirely. Clearly two data points aren't enough to form a real trend, but they do provide insight into how online video advertising may ultimately differ from traditional TV advertising.

    The first data point came from YouTube and Scripps, via this article in Online Media Daily. Scripps ran ads for 3 different programs on YouTube using its "True View" format that allows users to easily skip past the ad. It turned out that 44% of viewers actually watched the ad through to the end (a key benefit of the TrueView model is that advertisers only pay for ad views, not for skips).

    Then separately this week, video ad manager AdoTube released its Q1 2011 In-Stream Ad Format Index, which provides data on the 4.25 billion ad impressions generated across AdoTube's network (slides here). Among the key findings: 45% of viewers of its "Polite Pre-Roll" which allows skipping, watched through to the end. That was a 7% increase from the prior quarter and on par with conventional pre-roll ads. Another interesting finding was that when the Polite Pre-Roll is used, the abandonment rate for the content itself is 18% lower than when conventional pre-rolls are used, suggesting that ad choice enhances the content experience.

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  • Forget Cord-Cutting, Greed May Destroy the Cable Industry

    For all the ink that's been spilled over the past year about consumer-driven cord-cutting leading to the demise of the cable industry, could it instead end up that greed will cause the industry's own destruction? Maybe so. With the fracas over Time Warner's iPad app reaching ridiculous new levels each week, the industry is experiencing its own version of the old adage "We have met the enemy and he is us."

    Yesterday's turn of events - Time Warner Cable seeking a declaratory judgment from the U.S. District Court that it has the contractual rights to stream cable programming to its iPad app inside subscribers' homes, and Viacom responding with its own suit against Time Warner Cable - represent a dangerous breakdown in key industry relationships at a time when competitive forces loom larger than ever.

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  • Time Warner Cable iPad App Disrupting the Cable Industry

    It's been less than 2 weeks since Time Warner Cable announced its iPad app, but the fur has been flying ever since. In the WSJ's latest coverage today, it details how TWC is continuing to insist that its contracts with cable networks give it the right to stream their linear channels to iPads in subscribers' homes. Conversely, multiple network groups, including Scripps, Viacom and Discovery have disagreed, leading to an increasingly public internecine industry fight.

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  • Gourmet Magazine's Closing Offers Lessons for Navigating the Broadband Era

    Earlier this week when Conde Nast pulled the plug on Gourmet magazine and 3 other titles, there was much hand-wringing about the depressed state of the magazine industry. But while falling ad sales, costs of production, editorial issues and redundancy were all contributors to the 68 year-old Gourmet's ultimate fate, in my view, its failure is part of a much larger story of how much the media business has evolved. More specifically, Gourmet offers abundant lessons for those trying to successfully navigate the broadband era.

    Gourmet, and its owner Conde Nast, are part of a proud media tradition that relied mainly on tying an editorial approach and brand to one specific media outlet - the magazine. In this traditional paradigm, the media world was thought of in terms of categories: broadcast TV network, newspaper, radio, cable, etc. While the same corporate owner might have interests across categories, the specific mission of each media property was well-defined: turn out the best product possible for your chosen medium and keep your audience and advertisers coming back for more. (As a sidenote, this is a key reason why most magazine companies did not launch cable TV networks related to their areas of specialty 25 years ago, thereby opening the field for upstarts.)

    The problem is that this model is out of synch with the way many real people actually experience media today. People affiliate with media brands in a more deeply self-identifying way. It's no longer just the information and entertainment that's conveyed, but also about the statement affiliating with that media brand makes and/or the implied trust and comfort that's provided. For better or for worse - depending on your perspective - brand affiliation is now a deeply ingrained part of our cultural landscape.

    Smart advertisers know this too. They are not just interested in just reaching their target audience when they pick up a magazine for example. They want to surround consumers with their brand whenever consumers engage with their chosen media. Advertisers continue to grapple with how to optimize their media spending to gain mindshare and drive sales.

    Forward-thinking media companies have realized for sometime now that changing consumer and advertiser preferences must drive the way they do business, not the other way around. Two examples I like to cite are ESPN and Food Network, two highly successful cable networks that have built strong media brands and prospered by constantly reinforcing the value of their core franchises.

    Among the many non-cable activities each has launched are successful magazines. That may seem ironic given the magazine industry's woes, but in truth each has figured out how to extend their brand, editorial, and importantly, advertiser interest into print. Food Network magazine's recent success is all the more remarkable; while Conde Nast has undergone a wrenching downsizing, Food Network Magazine, which launched in October '08 (in partnership with Hearst), has recently expanded its circulation base to 900,000, nearly on par with what Gourmet achieved after 68 years.

    Noteworthy for ESPN and Food Network have been their successful online initiatives and push into broadband video, all reinforcing their core franchises. In addition to its ad and commerce supported web sites, ESPN has rolled out ESPN 360, a subscription online video service available in 41 million U.S. broadband homes for which ISPs pay a monthly fee. Food Network too has been busy expanding its franchise in online video, among other things recently launching Food2, a broadband-only channel catering to younger viewers that cultivates up-and-coming talent. And as I wrote on Monday, Scripps Networks (Food's owner) just announced a deal with 5Min (an online video syndication platform) to proliferate its content across the web while also gaining access to additional targeted ad inventory to sell.

    ESPN and Food Network are not alone in having capitalized on the trend away from the single media outlet model, though they are surely among the most successful. On the other hand, giants like Conde Nast (even despite its successful Epicurious.com site) and others continue to struggle in finding the formula for success in the new media world. To be sure, there's no respite in sight; I only see the multi-platform media model accelerating from here. For example, mobile-delivered video, currently being driven by the iPhone, but soon by other smartphones too, represents the next big wave to crash against traditional media's shores.
     
    Learning to successfully adapt to these new realities is not an option. The alternative is the eventual demise of other proud names.

    What do you think? Post a comment now.

     
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  • The Cable Industry Closes Ranks

    First, apologies for those of you getting sick of me talking about the cable TV industry and broadband video; I promise this will be my last one for a while.

    After attending the CTAM Summit the last couple of days, moderating two panels, attending several others and having numerous hallway chats, I've reached a conclusion: the cable industry - including operators and networks - is closing ranks to defend its traditional business model from disruptive, broadband-centric industry outsiders.

    Before I explain what I mean by this and why this is happening, it's critical to understand that the cable business model, in which large operators (Comcast, Time Warner Cable, etc.) pay monthly carriage or affiliate fees to programmers (e.g. Discovery, MTV, HGTV, etc.) and then bundle these channels into multichannel packages that you and I subscribe to is one of the most successful economic formulations of all time. The cable model has proved incredibly durable through both good times and bad. In short, cable has had a good thing going for a long, long time and industry participants are indeed wise to defend it, if they can.

    It's also important to know that the industry is very well ordered and as consolidation has winnowed its ranks to about half a dozen big operators and network owners, the stakes to maintain the status quo have become ever higher. All the executives at the top of these companies have been in and around the industry for years and have close personal and professional ties. There's a high degree of transparency, with key metrics like cash flow, distribution footprint, ratings and even affiliate fees all commonly understood.

    One last thing that's worth understanding is that the cable industry has very strong survival instincts, or as a long-time executive is fond of saying, "Real cable people (i.e. not recent interlopers from technology, CPG or online companies that have joined the industry) were raised in caves by wolves." The fact is that the industry started humbly and experienced many very shaky moments. Yet it has managed to survive and continually re-invent itself (for those who want to know more, I refer you to "Cable Cowboy: John Malone and the Rise of the Modern Cable Business" by Mark Robichaux, still the best book on the industry's history that I've read).

    All of that brings us to broadband and its potential impact on the cable model. As I've said many times, broadband's openness makes it the single most disruptive influence on the traditional video distribution value chain. Principally that means that by new players going "over the top" of cable - using its broadband pipes to reach directly into the home - cable's model is at serious risk of breaking down, once and for all.

    The cable industry now gets this, and I believe has closed ranks to frown heavily on the idea of cable programming, which operators pay those monthly affiliate fees for, showing up for free on the web, or worse in online aggregators' (e.g. Hulu, YouTube, Veoh, etc.) sites. The message is loud and clear to programmers: you'll be jeopardizing those monthly affiliate fees come renewal time if your crown jewels leak out; worse, you'll be subverting the entire cable business model.

    And this message isn't being delivered just by cable operators such as Peter Stern from Time Warner who said on my Broadband Video Leadership Breakfast panel that "a move to online distribution by cable networks would directly undermine the affiliate fees that are critical to creating great content." It's also coming from the likes of Discovery CEO David Zaslav who said on a panel yesterday that "there's no economic value from online distribution," and that "great brands like Discovery's must not be undervalued by making full programs available for free online."

    The issue is, as a practical matter, can the industry really control all this? If there's zero online distribution, then as Fancast's impressive new head, Karin Gilford said on my panel yesterday, "pressure builds up and another channel inevitably opens" (read that as The Piracy Channel). The problem is that if, for example, an operator does put programs up on its own site - as Fancast is doing - they're available to ALL the site's visitors, not just existing cable subscribers, unless other controls are put in place like passwords, IP address authentication, geo-targeting, etc. But these are confusing and cumbersome to users whose expectations are increasingly being set by broadcasters who are making their primetime programs seamlessly available to all comers.

    So what does this closing ranks suggest? Going forward, I think we'll still see cable networks putting up plenty of clips and B-roll video from their programs, maybe the occasional online premiere, some made-for-the-web stuff, paid program downloads (iTunes, etc.) and promotional/community building contests, as Deanna Brown from Scripps described with "Rate My Space" or Zaslav discussed with "MythBusters."

    But when it comes to full cable network programs going online, I think that spigot's going to dry up. That has implications for online aggregators like Hulu, who will continue to have big holes in their libraries until they're ready to pay up for these carriage rights. And it also means that broadband-to-the-TV plays are also going to be hampered by subpar lineups unless these companies too are willing to pay for cable programming.

    By closing ranks the cable industry's making a bold bet that its ecosystem can withstand broadband's onslaught and the rise of the Syndicated Video Economy. In yesterday's post I noted that the music industry tried a similar approach; we know where that got them. There are plenty of reasons to think things could indeed be different for the cable industry, but there are as many other reasons to think the cable industry is massively deluding itself and could someday be grist for a chapter in the updated version of Clay Christensen's "The Innovator's Dilemma," (my personal bible for how to pursue successful disruption), right alongside the inevitable chapter about how the once mighty American auto industry spectacularly lost its way.

    For my part, there are just too many moving parts for me to call this one just yet.

    What do you think? Post a comment now!

     
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  • Notes from Broadband Video Leadership Breakfast

    Yesterday, I hosted and moderated the inaugural Broadband Video Leadership Breakfast, in association with the CTAM New England and New York chapters, here in Boston (a few pics are here). We taped the session and I'll post the link when the video is available. Here are a few of key takeaways.

    My opening question to frame the discussion centered on broadband's eventual impact on the cable business model: does it ultimately upend the traditional affiliate fee-driven approach by enabling a raft of "over-the-top" competitors (e.g. Hulu, Netflix, Apple, YouTube, etc.) OR does it complement the model by creating new value and choice? As I said in my initial remarks, I believe that how this question is ultimately resolved will be the key determinant of success for many of the companies involved in today's broadband ecosystem and video industry.

    I posed the question first to Peter Stern, who's in the middle of the action as Chief Strategy Officer of Time Warner Cable, the second largest cable company in the U.S. I thought his answer was intriguing: he said that it is cable networks themselves who will determine the sustainability of the model, depending on whether they choose to put their full-length programs online for free or not.

    Later in the session, he put a finer point on his argument, saying that "a move to online distribution by cable networks would directly undermine the affiliate fees that are critical to creating great content" and that finding ways to offer these programs only to paying broadband Internet access subscribers was a far better model for today's cable networks and operators to pursue (for more see Todd Spangler's coverage at Multichannel News).

    Peter's point echoes my recent "Cord-Cutters" post: to the extent that cable networks - which now attract over 50% of prime-time viewership, and derive a third or more of their total revenues from affiliate fees - withhold their most popular programs from online distribution, they provide a powerful firewall against cord-cutting. Speaking for myself for example, the prospect of missing AMC's "Mad Men" (not available online anywhere, at least not yet...) would be a powerful disincentive for me to yank out my Comcast boxes.

    These thoughts were amplified by the other panelists, Deanna Brown, President of SN Digital, David Eun, VP of Content Partnerships for Google/YouTube, Roy Price, Director of Digital Video for Amazon and Fred Seibert, Creative Director and Co-founder of Next New Networks, who held fast to a highly consistent message that broadband should be thought of as expanding the pie, thereby creating a new medium for new kinds of video content. David, in particular cited the massive amount of user-uploaded and consumed video at YouTube (amazingly, about 13 hours of video uploaded every minute of every day) as strong evidence of the community and context that broadband fosters.

    Still, our audience Q&A segment revealed some very basic cracks in the panelists' assertions that the transition to the broadband era can be orderly and managed (not to mention that afterwards, I was privately barraged by skeptical attendees). First and foremost these individuals argued the idea that the cable industry can maintain the value of its subscription service by using the control-oriented approach typified by the traditional windowing process flies in the face of valuable lessons learned by the music industry.

    Of course most of us know that sorry story well by now: an assortment of entrenched, head-in-the-sand record labels forcing a margin rich, but speciously valued product (namely the full album or CD) on digitally empowered audiences, who decided to take matters into their own hands by stealing every song they could click their mouses on. Consequently, a white knight savior (Apple) offering a legitimate and consumer-friendly purchase alternative (iPod + iTunes), which would grew to be so popular that it has made the record labels beholden to it, while simultaneously hollowing out the last vestiges of the original album-oriented business model.

    Does history repeat itself? Are Peter and the other brightest lights of the cable industry deluding themselves into thinking that a closed, high-margin, windowed platform like cable can ever possibly morph itself into a flexible, must-have service for today's YouTube/Facebook generation?

    I've been a believer for a while that by virtue of their massive base of broadband-connected homes, high-ARPU customer relationships and programming ties, cable operators have enormous incumbent advantages to win in the broadband era. But incumbency alone does not guarantee success. Instead, what wins the day now is staying in tune with and adapting to drastically changed consumer expectations, and then executing well, day after day. One look at the now gasping-for-breadth behemoth that was once proud General Motors hammers this point home all too well.

    As Fred succinctly wrapped things up, "The reason I love capitalism is that it forces all of us to keep doing things better and better." To be sure, broadband and digital delivery are unleashing the most powerful capitalistic forces the video industry has yet seen. What impact these forces ultimately have on today's market participants is a question that only time will answer.

    What do you think? Post a comment now!

     
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  • June '08 VideoNuze Recap - 3 Key Topics

    Wrapping up a busy June, I'd like to quickly recap 3 key topics covered in VideoNuze:

    1. Execution matters as much as strategy

    I've been mindful since the launch of VideoNuze to not just focus on big strategic shifts in the industry, but also on the important role of execution. I'm not planning to get too far into the tactical weeds, but I do intend to show examples where possible of how successful execution can make a difference. This month, in 2 posts comparing and contrasting Hulu and Fancast (here and here) I tried to constructively show how a nimble upstart can get a toehold against an entrenched incumbent by getting things right.

    While great execution is a key to successful online businesses, it may sometimes feel pretty mundane. For example, in "Jacob's Pillow Uses Video to Enhance Customer Experience" I shared an example of an arts organization has begun including video samples of upcoming performances on its web site, improving the user experience and no doubt enhancing ticket sales. A small touch with a big reward. And in this post about the analytics firm Visible Measures, I tried to explain how rigorous tracking can enhance programming and product decisions. I'll continue to find examples of where execution has had an impact, whether positive or negative.

    2. Cable TV industry impacted by broadband

    As many of you know, I believe the cable TV industry is a crucial element of the broadband video industry. Cable operators now provide tens of millions of consumer broadband connections. And cable networks have become active in delivering their programs and clips via broadband. Yet the broadband's relationships with operators and networks are complex, presenting a range of opportunities and challenges.

    On the opportunities side, in "Cable's Subscriber Fees Matter, A Lot," I explained how the monthly sub fees that networks collect put them on a firm financial footing for weathering broadband's changes and an advantageous position compared to broadband content startups which must survive solely on ads. Further, syndication is offering new distribution opportunities, as evidenced by Scripps Networks syndication deal with AOL in May and Comedy Central's syndication of Daily Show and Colbert Report to Hulu and Adobe. Yet cable networks are challenged to exploit broadband's new opportunities while not antagonizing their traditional distributors.

    For operators, though broadband access provides billions in monthly revenues, broadband is ultimately going to challenge their traditional video subscription business. In "Video Aggregators Have Raised $366+ Million to Date," I itemized the torrent of money that's flowed into the broadband aggregation space, with players ultimately vying for a piece of cable's aggregation revenue. These and other companies are working hard to change the video industry's value chain. There will be a lot more news from them yet to come.

    3. Video publishing/management platforms continue to evolve

    Lastly, I continued covering the all-important video content publishing/management platform space this month, with product updates from PermissionTV, Brightcove and Entriq/Dayport. Yesterday, in introducing Delve Networks, another new player, I included a chart of all the companies in this space. I put a significant emphasis on this area because it is a key building block to making the broadband video industry work.

    These companies are jostling with each other to provide the tools that content providers need to deliver and optimize the broadband experience. The competitive dynamic between these companies is very blurry though, with each emphasizing different features and capabilities. Nonetheless, each seems to be winning a share of the expanding market. I'll continue covering this segment of the industry as it evolves.

    That's it for June; I have lots more good stuff planned for July!

     
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  • How-to Category Gets Crowded

    The Internet's low entry barriers are again at work, this time in the video-based "how-to" category, which has recently attracted a rush of well-funded new competitors. It's no surprise: how many of us would rather watch a video of someone explaining how to do something vs. reading a lengthy and often poorly-written guide?

    Like many things in the broadband video world, the players' strategies, content approaches and business models are all over the board. In the ad-supported category, the earliest entrants (and their funding) are ExpertVillage (now owned by Demand Media) and VideoJug ($30M from last May), with HowCast ($8M from Tudor/others), 5Min.com ($5M from Spark Capital) and WonderHowTo.com (undisclosed amount from General Catalyst) launching more recently. Of course there's also YouTube and DIYNetwork from Scripps, with its sister cable channel, and scores of other sites that offer free instructional video. Then in the paid download category there is Zipidee (angel round), which recently acquired TotalVid and iAmplify ($6M from Kodiak). plus countless other video download sites.

    One of the lines of demarcation for the ad-supported sites is how they acquire content. Does the video come solely from "experts" or also from the community? For now, it appears that ExpertVillage and VideoJug rely on experts while the other ad-supported upstarts rely on the community as well. I spoke with Ran Harnevo, CEO of 5Min.com, who believes its highly community-oriented focus is a real differentiator. In fact, 5Min bills itself as a "Life Videopedia", a spin on the hugely popular Wikipedia, which demonstrates the power of user contributions.

     

    The whole notion that a top-down editorially-driven approach will ever be sufficiently comprehensive seems unlikely, so my guess is that some UGC augment eventually will be required by all players. That means these sites will compete with each other for the best contributors, in the same way that video sharing sites like Metacafe, Veoh, Revver and others compete with each other in general video.

    To succeed in this horse race, 5Min's focus is to offer the best overall platform, including a focus on technology. So 5Min provides strong branding opportunities, a revenue share, tools and features and of course, traffic. On the technology side, one differentiator is its "SmartPlayer", which allows zooming, super slow-motion, frame-by-frame and storyboard playback.

    One of the main reasons there's so much activity on the ad-supported side is that how-to videos provide highly-targeted and engaged audiences that sponsors crave. At a minimum, marrying these how-to videos to Google AdSense provides a baseline revenue model. But the real opportunity is to aggregate enough traffic in a category to land sponsors who will be prominently featured. So for example, while 5Min already does an impressive 5M views/mo, it will likely need to be in that range per category to appeal to big-name sponsors. The company will begin running ads in Q2, and is focused on display ads and overlays, not pre-rolls, which Ran thinks are too disruptive. To build its traffic it will pursue widgetization, 3rd party distribution and SEO.

    All of this how-to activity is clearly going to be a boon for users. Just as the Internet has provided an explosion of information, these video how-to sites will now make doing things a whole lot easier. How to break out of the growing pack will continue to be each how-to site's challenge for the foreseeable future.

     
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  • Discovery and Scripps Networks Are Blazing Ahead

    The past two days have witnessed two very significant cable network-related transactions. First, Discovery announced its acquisition of HowStuffWorks for $250 million, its largest acquisition ever. And second, Scripps announced that it would separate itself into two companies, with its marquee networks, HGTV and Food Network, finally being pried free from the E. W. Scripps's traditional newspaper business.

    I interpret these announcements as continued recognition by major cable networks that their futures lie squarely in the interactive and broadband video areas. These networks - and others - are laying the groundwork for an evolution from sole dependence on their traditional business model. That model has been a monster success over the years, built on ever-expanding distribution through cable and other multichannel platforms and annual increases in monthly affiliate fees.

    With the advent of the Internet and broadband, the fragmentation of audiences, the proliferation of content startups and the strengthening of online advertising models, all cable networks realize that embracing interactive/broadband opportunities is critical to their future success.

    Discovery's acquisition of HSW gives it a trove of broad and deep online content, some developed by HSW and some supplied by third parties, which will now be available to Discovery's multiple properties. In one fell swoop, Discovery gains scale and expertise, which must now be delicately integrated into its current on-air and online brands. If the integration of HSW's content is a success, it will become a template for other deals.

    Meanwhile, the Scripps split up follows that of Belo, another lagging newspaper company. The standalone entity, Scripps Networks Interactive, will have a growth focus leveraging strong brands in some of the best lifestyle categories (food, home, luxury, etc.). With its own currency to do deals, I wouldn't be surprised to see Scripps ramp up its acquisition activity as it bolsters its position across all these categories (in fact CEO Ken Lowe said as much in the analyst call). Scripps has been a real leader among cable programmers in building out broadband extensions to its cable networks and I would expect to see that activity grow, accompanied by distribution deals with online distributors which have strong reach.

    While the Discovery and Scripps deals are the latest evidence that the traditional cable programming world is undergoing significant change, I expect we'll see plenty more similar moves in the year ahead.

    (Note while both Discovery and Scripps are clients, these are my opinions only and no confidential information has been relied upon)

     
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  • Maven Moves the Broadband Video Ad Market Forward

    Maven Networks got a lot of ink today with 2 announcements, first the launch of a new broadband ad platform and the second, the launch of a new industry collaboration dubbed the "Internet TV Advertising Forum." These have been in the works for a while and Maven gave me a heads up on both over the summer.

    The Ad Forum is noteworthy, as it appears to be a genuine "good guy" effort to move the whole industry forward in optimizing the ad model. Ten companies signed on for launch, including heavies like Scripps, Fox News, Oglivy, TV Guide, Microsoft, DoubleClick and 24/7.

    I caught up by phone with Kristen Fergason, Maven's VP of Marketing to learn more. First, the Forum is completely open to everyone. Though initially underwritten by Maven, over time it will probably take on more of a "dues-paying" model. And to show that "open" really does mean open, I asked what happens if competitors like Brightcove for example, wanted in? Her reply: "we'd happily accept them".

    The forum is mean to bring together agencies, content providers and vendors to build consensus about how to move past the market's current reliance on pre-rolls. Kristen said industry players have been "chomping at the bit" to get involved and Maven received 40 applications today alone. Importantly, the Forum is meant to augment IAB initiatives, not compete with them. The Forum will run focus groups and collect research based on ideas generated by Forum members to see what works and what doesn't. Results will be available to everyone.

    Maven believes that a "rising tide lifts all ships", but because its ad platform is ready now, it will benefit disproportionately. That's where today's other announcement comes in. The demo I saw shows how new ad units (videos, overlays, banners, etc.) can be dynamically inserted, not just at the beginning of the video, but throughout. The result is that a lot of new inventory is available. The below graphic shows "cue points" for manual insertion, but an algorithm can also be used to insert based on what the system knows about things like clip length, average user session time, click-thru, etc. Note I didn't see this feature in action, so I can't say for sure how well it actually works.

     
    There's also pretty neat telescoping transaction capability as shown below, which allows the content provider or advertiser to collect specific user information. The video resumes when the user is done.
     
    The ad platform looks like a solid entry and when taken together with other myriad ad initiatives in the market, everything suggests that we may actually see life beyond pre-rolls. Hallelujah.
     
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