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Analysis for 'Syndicated Video Economy'

  • ESPN-AOL Partnership Highlights Power of Video Syndication

    AOL has scored a huge coup with a deal announced today to syndicate ESPN video content across its owned-and-operated sites, plus its distribution network of 1,700 publisher sites. ESPN video in AOL will be accessible on desktops, smartphones, tablets and connected TV devices.

    Importantly, the deal underscores the allure of online video syndication. By choosing to syndicate through AOL, ESPN concluded - despite its already formidable presence as the top-ranked sports property online - that AOL's distribution network could provide still further online reach and monetization potential. That's no small statement, and it is a testament to both AOL's video growth over the past several years and to the strength of the "Syndicated Video Economy" concept I began talking about back in 2008.

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  • VideoNuze-TDG Podcast #155 - More on AOL's Video Syndication Success; Data from BBC's Olympics Delivery

    I'm pleased to present the 155th edition of the VideoNuze-TDG podcast with my weekly partner Colin Dixon, senior analyst at The Diffusion Group, who joins from London. First up this week, we discuss AOL's video success and the larger concept of video syndication. Earlier this week, AOL revealed that its video revenues jumped from $10 million 2 years ago to $100 million in 2012, largely due to syndication. Colin and I dig into why syndication is so compelling and what's ahead.

    Next up, Colin shares insights he gained from a presentation at the OTTTv World Summit in London by Marina Kalkanis, Head of the BBC's Programmes OnDemand Core Services team, which is responsible for the media and metadata services supporting BBC online. Marina's team oversaw BBC's online simulcast and on demand streaming of the London Olympics.

    Colin was impressed by the scale of the BBC's Olympics operation and how video was consumed online and on mobile devices. One key takeaway - BBC found online/mobile complimenting linear TV, similar to NBC's experience in the U.S.

    Click here to listen to the podcast (20 minutes, 11 seconds)




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  • Syndication Wins: AOL's Video Revenue Jumps From $10M to $100M in Past 2 Years

    I've been devoting a lot of ink to AOL recently because its success has made it the poster child for the power of online video syndication and monetization. In yesterday's Q3 '12 earnings report, AOL delivered the most resounding evidence yet of syndication's value - CEO Tim Armstrong said AOL's video ad revenue jumped from $10 million 2 years ago to a projected $100 million in 2012, with more growth ahead in 2013. The results are mainly due to video syndication, powered by AOL's acquisition of 5Min in 2010.

    Simply put, AOL is capitalizing on the concept of the "syndicated video economy" that I first began discussing 4 1/2 years ago. On the call, Armstrong described how AOL's large video syndication library (which has grown from 30K videos to 450K today) feeds both its owned and operated properties and its network of 30K publishers. All of these sites are hungry for video for 2 important reasons: they meet users' increasingly video-oriented expectations and their adjacent ad inventory is monetized at far better rates than traditional display.

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  • ESPN Capitulates to Syndicated Video Economy

    You'd have to have slept through yesterday to miss the big news that ESPN is now syndicating video clips from a cluster of its programs to AOL, its first-ever such deal. I interpret the deal as an extremely strong indicator that the "Syndicated Video Economy" (as I described this trend 3 weeks ago) is inexorable, even for the richest and most powerful video brands.

    ESPN is one such brand. In 2007 it generated 1.2 billion video views from its own site, placing it in the top 10 of all sites. In January '08, ESPN generated 81 million views according to comScore, ranking it #9. And much of ESPN's broadband video (aside from what it shows exclusively on ESPN360, its online subscription service) is essentially re-purposed from on-air, likely making the margins on ESPN's online efforts insanely profitable.

    Yet with the AOL deal, even the mighty ESPN has now capitulated to the lure of the syndicated video model. And the AOL deal is surely the first of many more deals to come. ESPN has likely come to the same conclusion as have scores of other video content providers, including the major broadcast networks: the future broadband video value chain is going to be more about "accessing eyeballs" - wherever they may live, at portals, social networks and devices - than about "acquiring eyeballs" by driving them to one central destination site. As the most stalwart proponent of the latter approach, other market participants should take heed of ESPN's strategy change.

     

    The motivation behind video providers shifting from traditional scarcity-driven distribution strategies lies in the peculiar dynamics of the Internet: while audiences continue to fragment to a bewildering range of sites, they are simultaneously coalescing in a relatively small number of influential new brands such as YouTube, MySpace, Facebook and the traditional portals. Consider the comScore January stats again. The Google sites (dominated by YouTube) drove 3.4 billion video views or 42 times ESPN's video volume. A distant second was the Fox Interactive Media sites, including MySpace, which drove 584 million views, still 7 times ESPN's total.

    These dynamics incent established video providers and startups in particular to get their video in front of all those eyeballs with more flexible business models. (For those interested in more detail on how the video distribution value chain is fast-changing due to these emerging players, I've posted slides from late '07 here. I'll have updated slides soon.)

    The "Syndicated Video Economy" is creating both unprecedented opportunities and challenges for video providers. I continue to believe the future winners will be relentlessly flexible and willing to adopt new business approaches that keep them in synch with evolving consumer behaviors.

     
  • March '08 Recap - 3 Key Themes

    As I mentioned at the end of February, each month I plan to step back and recap a few key themes from recent VideoNuze posts. Here are three from March '08. (And remember you can see all of March's broadband news, aggregated from across the web, by clicking here)

    The Syndicated Video Economy: An Introduction

    In March I introduced the concept of the "Syndicated Video Economy" ("SVE") to describe how the broadband video providers are increasingly coalescing on a strategy for widespread distribution of video through myriad outlets. In the SVE media companies shift their focus from "aggregating eyeballs" in a centralized destination to "accessing eyeballs" wherever (and whenever) they live. The SVE is a big departure from traditional tightly-controlled, scarcity-driven distribution approaches. Investors have responded by funding SVE-oriented content and technology startups.

    In March I provided several examples of SVE initiatives. CBS launched its Local Ad Network to distribute content to local bloggers and web sites. 60Frames, a new broadband studio, is explicitly focused on partnerships for distribution, and is not even building destination web sites for its programs. And FreeWheel is developing management tools so that content can be optimally monetized across a content provider's sprawling network of syndication partners.

    The SVE resonated strongly with VideoNuze readers; many are focused on it and vested in its further development. Expect to hear a lot more about the SVE from me in coming posts. I'll also have supporting slides I'm developing for upcoming webinars on the topic.

    Over-the-Top: Getting Broadband Video to the TV

    Bringing broadband video all the way to the TV by bypassing existing service providers (so-called "over-the-top") continues to be the big elusive prize for many. This past month YouTube and TiVo announced a partnership to let a subset of TiVo owners gain full YouTube access on their TVs, a welcome move.

    Following that, in "YouTube: Over-the-Top's Best Friend" I suggested the YouTube, with its dominant market position and brand loyalty could in fact be the linchpin to over-the-top devices gaining a foothold with consumers. Google-YouTube executives' vision for YouTube as a video platform, powering experiences wherever they are, lends support to my proposition. Lastly on over-the-top, new contributor Michael Greeson, founder of market researcher TDG, proposed that adapting low-cost devices like DVD player may well be the best way to bridge broadband and TV.

    Social media and video: 2 sides of the same coin

    This past month also continued an escalation of interest in the intersection of social media and broadband video. At the Media Summit there was intense focus on engagement, and how broadband can uniquely create new user experiences that deeply involve the user. These social experiences include sharing, personalization, commenting, rating and so on. In this vein, Maginfy.net introduced new social features to support its specialized user-created channels, a smart evolution of its product.

    And in a follow-up to "The Intersection of UGC and Brand Marketing?" I clarified the opportunities that brand marketers may or may not have to get involved with this hot space. For those interested in more on this subject, new VideoNuze sponsor KickApps provided an informative webinar which is still available here.

    So that's March's recap. There will be plenty more on all of these and other broadband video topics in April and beyond!

     
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