Categories: Deals & Financings
KickApps and NBCU are announcing a licensing deal this morning which includes KickApps' App Studio and Premium Social Video Platform. The deal enables all of NBCU's entertainment properties to use KickApps' social software solution, expanding upon a prior relationship between the companies which has primarily focused on NBC's local media properties.
As Marc Siry, NBCU's SVP, Digital Products and Services explained to me, KickApps's key differentiator was its self-service App Studio which allows NBCU's brands to quickly create customized, socially-oriented sites and video players using drag-and-drop tools. Marc said that the self-service aspect to the App Studio was particularly important as each NBCU property has its own customization requirements. With resources tight, it was key to be able to have each property be somewhat self-sufficient. Marc said that social wrapping is essential to all media today, and that no other online video platform that NBCU evaluated offered the same capabilities.
(As a side note, I have always thought of KickApps as a social platform first and foremost, which also offered video functionality. As a result it's not really a pure OVP, though with its NBC win, KickApps is showing that for some customers, it is a bona fide OVP competitor.)
NBC has strongly pursued social interaction on its local sites, encouraging users to submit comments, video, and other engagement opportunities. With local media impacted by audience fragmentation, efforts to re-invent how to connect with audiences have been crucial. Looking ahead - though unable to get too specific for now - Marc told me that NBCU already has several projects in the works that will leverage KickApps: a fan site from Telemundo, a new video portal emphasizing "secondary" non-TV program content with rabid fan interest, and a celebrity-oriented user-generated site. Parent company GE is even planning to use KickApps as an enterprise solution for video sharing among internal units.
Marc said that one other appealing aspect of KickApps was its embrace of Adobe's Open Source Media Framework ("OSMF"). For those not familiar with OSMF (formerly known as "Strobe") it is a public, pre-release initiative aimed at allowing developers to use pluggable components to create rich Flash-based playback experiences. It is still early days for OSMF and it represents something of a challenge to many online video platforms which offer similar integrations as part of their product or through professional services.
But as Marc explained, OSMF is valuable to NBCU because it is seeing more and more requirements from its brands and advertisers to do custom creative and OSMF gives it a baseline of functionality on which to build. Prior to KickApps, NBCU properties relied mainly on homegrown software for video applications, which Marc said had limited flexibility.
KickApps's NBCU win is yet another example of how dynamic the market for video solutions is today. I am continually hearing about how specific content providers each have their own unique requirements, so an individual video platform provider can be a perfect fit in one situation, but be less than optimal in another. While some requirements are converging, I anticipate a level of individuality will persist for some time to come, sustaining the OVP fragmentation we've seen to date.
What do you think? Post a comment now (no sign-in required).
Surely one of the most enduring questions I and others who watch the online video industry are asked (and in fact often ask ourselves) is: How can video management and publishing platform companies continue to launch, even as the space already seems so crowded?
Personally I've been hearing this question for at least 6 years, going back to when I consulted with Maven Networks, whose acquisition by Yahoo was one of the few industry exits (and likely the best from an investor ROI perspective, regardless of the fact that it was shut down little more than a year later as part of Yahoo's retrenching. With yesterday's launch of Episodic and the recent launch of Unicorn Media, plus last week's $10M Series C round by Ooyala, it's timely to once again try to make sense of all the activity in the platform space.
The best explanation I offer traces from my Econ 101 class: supply is expanding to meet demand. Over the past 10 years, there has been an enormous surge of interest in publishing online video by an incredible diversity of content providers. Importantly, interest by content providers has intensified in the last few years. I can vividly recall 2003 and 2004, trying to explain to leading content providers why online video was an important initiative to pursue. Still, their projects were often experimental and non-revenue producing. Contrast this with today, where every media company on earth now recognizes online video as a strategic priority.
But even as online video's prioritization has grown, many media companies don't have all the strategic technology building blocks in place. In fact, many continue to use home-brewed technology developed a while back. The range of video features needed continues to grow and evolve rapidly. Consider how requirements have expanded recently: live, as well as on-demand video; long-form programs as well as clips; paid, as well as ad-supported business models; mobile, as well broadband distribution; multiple bit rate, as well as single stream encoding; in-depth analytics as well as top-line metrics; widespread syndication as well as destination-site publishing; off-site, as well as on-site ad management. The list goes on and on.
As media company interest has grown, technology executives and investors have taken note. Venture capital firms continue to see online video as a high-growth industry (even if the revenue model for content providers is still developing, as are many of the platforms' own revenue models), with significant macro trends (e.g. changing consumer behavior, proliferation of devices, improved video quality, etc.) as fueling customer interest. Another important factor for platforms is rapidly declining development costs. As Noam Lovinsky, CEO of Episodic told me last week, open source and other development tools has made it cheaper than ever to enter the market with a solid product. With ever lower capital needs, a new video platform entrant that can grab its fair share of the market has the potential to produce an attractive ROI.
Of course all the noise in the platform space means media executives need to do their homework more rigorously than ever. I'm a strong believer that the only way to really understand how a video platform works, how well-supported it is and how well-matched it is to the content provider's needs is to vigorously test drive it. Hands-on use reveals how comprehensive a platform really is, or how comfortable its work flow is, or how well its APIs work. While I get a lot of exposure to the various platforms through the demos I experience and the questions I ask, I'll readily concede this is not the same as actually living with a platform day-in and day-out.
Another complicating factor is that while there are some companies purely focused on video management and publishing, there are many others who offer some of these features, while positioning themselves in adjacent or larger markets. When I add these companies in, then the list of participants that most often hits my radar would include thePlatform, Brightcove, Ooyala, Twistage, Digitalsmiths, Delve, KickApps, VMIX, Grab Networks, ExtendMedia, Cisco EOS, Irdeto, KIT Digital, Kaltura, blip.tv, Magnify.net, Fliqz, Gotuit, Move Networks, Multicast Media, WorldNow, Kyte, Endavo, Joost, Unicorn Media and Episodic (apologies to anyone I forgot). Again though, this list combines apples and oranges; some of these companies are direct competitors, some are partners with each other, some have a degree of overlap and so on.
There's a long list of platforms to choose from, yet I suspect the list will only get longer as online and mobile video continues to grow and mature. At the end of the day, who survives and succeeds will depend on having the best products, pricing the most attractively and actually winning profitable business.
What do you think? Post a comment now.
Switching gears a bit, lately it has become apparent to me that broadband video is not just proliferating for consumers, it is also beginning to change how businesses communicate with their constituencies. As people spend more of their time watching video at sites like YouTube, Hulu and others, it was probably inevitable that businesses would embrace video as well. This is the context for Origin Digital's new business TV solution, which can be thought of as a "Hulu-for-the-Enterprise" solution. Origin's Darcy Lorincz recently walked me through their strategy and showed me a demo at NAB.
Origin has been managing large scale corporate video events for 10+ years, and was recently acquired by Accenture. With the business TV solution it is leveraging that experience and its relationships to present a one stop solution for companies to communicate their messages. The solution is a hosted white-label video content management system, player, customizable UI/template and social media features, rolled into one. In a sense the business TV solution turns enterprises into video publishers presenting TV-like experiences.
Origin's goals are to help companies improve on how key messages and information are communicated to constituencies and save on face-to-face meetings and travel budget. Darcy explained how Accenture itself has used the business TV solution to build 11 internal "channels." The most active is for human resources, a crucial function in a professional services firm with offices worldwide.
In the HR channel I saw, supporting written materials are still available (with some neat zooming options) and they are arranged alongside relevant videos. Topics include HR policies and procedures, training classes offered, company updates, etc. The business TV solution can also integrate with existing ERP and SAP resources. Other channel examples are executive communications, marketing, sales, investor relations, etc. Users can save specific videos, create playlists, embed, download, share and comment.
Of course, to make use of something like this presupposes that the company has a library of video assets, and/or is ready to commit to shooting ongoing video. Darcy said feedback it has received suggests that a lot of big companies already have lots of video; the problem is there's been no easy way to organize and present it. Further, with the cost of producing high-quality video becoming cheaper and more available through companies like TurnHere and StudioNow, this will become less of any issue over time. Still, it's a paradigm change that will take time to adjust to.
Interestingly, Origin's is just one of many business-focused initiatives hitting my radar. Brightcove told me recently that they've set up a group focused on non-media (i.e. business/government/education) sectors which is getting traction. KickApps has also shared with me they've seen an uptick in corporate communications interest, with an emphasis on social media/interactivity (Alcatel Lucent's Network Cafe is an example). Lastly, a consumer-oriented video platform company recently explained to me confidentially that they're planning a full shift of their model to support business video.
If you happen to be going to next week's All Things D conference, Origin will be demo'ing its business TV solution. If not, there's a pretty good overview video here. Between it and all of these other business-focused initiatives, there could be a lot of Hulu-like activity coming soon.
What do you think? Post a comment now.
Categories: Business Apps
Jambo Media has moved video syndication another step forward with the official release of "Jambocast," an all-in-one video syndication platform. Jambocast, which is available for white-label licensing, essentially allows vertically-focused web sites to build out their own private video syndication networks. For web site that either don't have their own video, or want to augment what they do have, syndicating video into their sites is a great option. Jambo's CEO Rob Manoff recently explained to me how Jambocast works.
Jambocast follows on the company's success with its own video syndication network, Jambo Video Network (JVN). According to comScore, JVN ranked #18 in March '09, with 9M unique visitors and 37M video streams (U.S. only). As Rob noted, JVN has taught the company a ton about what's required to build and run a syndication network, lessons it has incorporated into the development of Jambocast.
First and foremost is the importance of offering a comprehensive solution. Rob explained that what he sees as unique about Jambocast is that it offers each piece part of what a syndicator would need - a "video syndication network-in-a-box." Customers get a customizable video player, ad management (which is also integrated with 3rd party ad networks), publisher/syndication management, content management and tracking/reporting. Jambocast's goal is to make it easy to get up and running and start making money. As Rob says, "we're a bunch of ad network guys building a video network with an ad network mentality."
Jambocast also responds to what content providers have been telling Jambo for a while: they want full control of where their content resides. Though embedding has become highly popular, Rob sees Jambocast as the "anti-embed alternative," for content providers who want hyper-distribution, but without risk of their brands ending up in undesirable places. Jambocast's syndication management features give web sites the tools to offer 3rd party content providers comfort.
Jambocast is getting quick traction - customers on board include Mondo Media (adult animation), KidsTube (video aggregator for kids), a large pet-related site (undisclosed for now) plus 6-8 others signed up, but also not yet disclosed.
Jambocast is a classic example of how syndication is continues to permeate the broadband video ecosystem. Though it's distinct, I'd put Magnify.net and KickApps in a somewhat similar orbit, with the former placing more emphasis on UGC and the latter more on social media features. Yet all are part of what I refer to as the Syndicated Video Economy, which continues to grow in influence. Having already made its own syndication network profitable, Jambo is now also going to help others do the same.
What do you think? Post a comment now.
(note: Jambo Media is a VideoNuze sponsor)
Categories: Syndicated Video Economy
Hearst-Argyle's goal is to allow local residents to discuss news topics important to their community and to upload their own photos and videos. The first u local area was launched in Dec '08 by WMUR in Manchester, New Hampshire and according to Hearst-Argyle generated tens of thousands of submissions in the first week alone. The other stations in Hearst-Argyle's portfolio will roll out u local in the coming months. For KickApps, the deal follows one with WorldNow, announced last year to drive social media into WorldNow-powered sites.
The question begs: can a local TV station become a social media hub for its local residents? In the Facebook-MySpace-Twitter-YouTube age, we seem to be on the cusp of social media saturation. Yet despite all these engagement opportunities, focused local social media initiatives could well find a place. People are extremely passionate about their local communities and the social bonds are very tight. Sharing common experiences, concerns and passions online with local neighbors seems like an updated version of what's been happening over backyard fences since the beginning of time.
The key is execution, not just in the user experience, but in the positioning of what the local broadcaster's brand will stand for. Striving to be a social media hub is a new positioning, and to incent viewer behavior, Hearst-Argyle will need to embrace the capability, heavily promote it and then manage it so it's a safe, well-lit area of its sites.
It's no surprise that local broadcasters have been slammed by the economic downturn. They were already hit hard by free classified services like Craigslist, fragmenting audience behavior, the shift of network programs to online and more recently the decline of the auto industry which is a key advertiser category. Now there are numerous entrants trying to grab their traditional local video advertisers. Not a day goes by without multiple stations announcing cutbacks. In short, local broadcasters need a total reinvention of their business models if they're to survive. u local is not the complete answer, but it is certainly a move in the right direction.
What do you think? Post a comment now.
Digitalsmiths is announcing this morning that Cisco has invested an undisclosed amount in the company. The deal adds onto Digitalsmiths' $12M Series B round from a couple months ago, led by .406 Ventures. Digitalsmiths has been building momentum in the video indexing and content management/publishing space and the Cisco investment is a nice validation for the company, particularly in this bruising economic climate. I talked to Digitalsmiths' (which is a VideoNuze sponsor) CEO/co-founder Ben Weinberger on Friday to learn more.
The deal was shepherded by the Cisco Media Solutions Group, which recently announced the general availability of its Eos (Entertainment Operating System) social media platform at CES. This follows a period of relative quiet for Eos. Almost 2 years ago I moderated an NAB Show Super Session panel which included Dan Scheinman, the SVP/GM of CMSG who was then just beginning to talk about Eos.
As Ben explained it, Digitalsmiths' indexing and video management will allow Eos to offer more advanced, targeted advertising capabilities to its customers. That certainly puts it in line with marketers' increasing desire for maximum context and ROI for their dollar. Improved navigation and a strong focus on monetization have been two critical Digitalsmiths' competitive differentiators.
At a broader level, Ben described how other Cisco groups began taking interest in Digitalsmiths during the due diligence process. In particular, the idea of Digitalsmiths-generated video metadata and indexing could become an interesting fit for Cisco's other products (remember that through its 2005 acquisition of Scientific-Atlanta, Cisco became one of the biggest suppliers of set-top boxes to video service providers. Cisco's also a leading maker of broadband access/routing infrastructure and in-home networks through Linksys).
Still, realizing this value is well down the road and will require working across multiple groups each with multiple priorities. For example, anything involving advanced advertising in the cable industry will also have to align with the growing role that Canoe is going to play in the industry. For now the upside of the Digitalsmiths investment is in how Eos leverages the company's technology.
Eos is a newcomer to the social media platform space, which has evolved considerably over the last two years. KickApps, Pluck and others have made a lot of headway in the media and entertainment vertical Eos is targeting; other verticals like sports, brand marketing and enterprise have also recently started to grow.
I have to admit that even after watching this almost year-old video of Dan explaining Eos, I'm still not sure I fully understand the role of Eos as a standalone offering from Cisco, especially when I read recently that its business model is a combination of a "nominal license fee and an ad revenue split." I mean, is there really enough financial upside in a hosted social media platform for mighty Cisco (fiscal Q1 '09 revenues of $10.3B) to pursue it? It's also worth asking whether Cisco has sufficient core software platform development competencies in this area. Certainly Cisco has plenty of financial muscle to back Eos, but is that enough to succeed in the crowded and scrappy social media space?
Yet another piece of this to consider is how players like Facebook and MySpace fit in at the intersection of social media and video. While neither is offering a white label platform (nor do I expect them to), last week's CNN/Facebook inauguration effort exposed the possibility that some major media companies may simply try to marry their video to these existing audiences. I've been a big fan of making broadband video more engaging through social applications but I'm cognizant that doing so is easier said than done. With resources increasingly scarce, some media companies may need to rethink how social they can afford to be.
For Eos, incorporating Digitalsmiths effectively would be a big help and could lay the foundation for other Cisco groups to benefit down the road as well. If Cisco's truly committed to the social media platform space this story will unfold over many years.
What do you think? Post a comment now.
Amidst all the gloomy economic news, there are actually still some earlier stage companies that are raising new money. To learn more about their how they're doing it, I emailed the CEOs of seven broadband/mobile video companies which have collectively raised nearly $80M in the last 3 months. I asked 3 basic questions:
While there were some common themes in their answers (many of which echoed the usual fundraising maxims), there was plenty of variety and a few outliers. Space constraints don't allow for me to share all of their specific answers, so I've tried my best to summarize the common themes and highlight key nuggets of wisdom below. If you have any questions, drop me an email.
The seven CEOs who graciously took time out of their busy days to contribute their thoughts (along with the recent rounds they've raised) are:
1. What are the key success factors for raising money given the difficult economic climate?
The answers that dominated were all around revenue, profitability and cash flow. All the CEOs mentioned, in one way or another, that being able to demonstrate real revenue growth and momentum is essential. Some noted that in the past traffic or usage may have been sufficient, but now the "premium is on paying customers," and how get to profitability and cash flow breakeven using reasonable assumptions. Several mentioned that investors are as risk averse as ever, which of course comes as no surprise. They want to see concrete, well thought-out plans.
Investors have also become more sophisticated about the whole broadband video sector and expect entrepreneurs to be able to explain where they fit into the ecosystem and what their points of differentiation are. Importantly, they are looking for proven models (unfortunately an oxymoron for a pure startup), or at least some minimal history of success that goes "beyond PPT slideware."
A couple of CEOs noted that investors have shifted from asking "how fast can you scale?" to "how will you get through this crisis?" They no longer expect a quick exit. They are looking for a real plan which includes contingency tactics if for example, competitors do something desperate like cut their prices in half.
2. What are the biggest challenges?
The prevailing theme here was uncertainty, starting with investors' own business models. They're focused on how much of their funds to hold in reserve to shore up existing portfolio companies. They're trying to gauge their own limited partners' appetite for venture investing given the credit squeeze. Then of course they're trying to understand the impact of broadband market drivers like ad spending and user adoption. One CEO lamented the difficulty of persuading people to put new money to work on the very day the stock market's dropping by 500 points. Still another noted that all of this can lead to a "self-fulfilling prophecy" where everything freezes and missed opportunities abound.
With respect to the broadband market specifically, one CEO said the key challenge is showing how "you monetize video for your clients." Absent that, "it will not only be hard to raise money, but harder still for your client to spend money with you."
Another said that the level of scrutiny has gotten so high that it's not even worth talking to any investor which doesn't have its own track record of investing in the broadband video sector. It's just too hard to educated people in this environment. Another CEO added that your model needs to be "brilliant and bulletproof, with an A-level management team already in place." Boy, there's a steep hurdle to clear.
3. Is there any specific advice you'd offer to those trying to raise money these days?
Many of the answers to this question reflected fundraising basics: understand your business thoroughly, put a balanced team in place, seek out investors you know first, have a solid plan, and bootstrap as much as possible first.
With respect to the raising money in the current lousy market, there was a broad range of sentiment. One CEO said "Don't...the terms are going to suck..." while another said to be "incredibly realistic about how much to raise, your burn rate and valuation." On the more optimistic end of the spectrum, one said "The market's poor performance means that investors are looking for new opportunities. Ignore all the negative energy and naysayers." And another remarked that "Even during the tech disaster of 2001-2003, angel investors, VCs and tech behemoths were still putting money to work in promising sectors." Another heavily emphasized the value of loyal and supportive existing investors (if there are any) in helping making the case to new investors.
More tactically, one CEO said that the more you "minimize uncertainty that surrounds your business specifically, the better off you'll be." Another said to make the transaction as simple as possible, and to "get the big items off the table first." Still another said to demonstrate "you're indispensable to customers, helping them weather the downturn." Finally one cautioned to be ready to take a lot more meetings than usual and expect a lot deeper follow up..."it may require you to go well beyond investors in your backyard to find the right fit."
Hopefully some of this is helpful to those of you trying to raise money right now, or thinking about doing so in the near future. Broadband video remains one of the hottest sectors out there; even still, if you're not getting a lot of love right now, you're not alone...
What do you think? Post a comment now.
Categories: Deals & Financings
Notwithstanding the countless times I've received emails with links to video clips or visited social networking pages where video is embedded, I've often had the sense that true social engagement around premium quality video has been lacking.
"Engagement" is one of those nebulous Internet words that can mean many things to different people. To me, the most appropriate online engagement opportunities should be modeled on how we have traditionally engaged with offline media. Some relevant offline examples that come to mind include recommending a movie to a friend, clipping a newspaper article to send to a colleague, chatting informally with friends and family during a TV show or sharing opinions about favorite actors and actresses over drinks.
As consumers shift their viewing to broadband, the key to engagement is to enable users to effortlessly and intuitively emulate some or all of these behaviors. I concede that's easier said than done. Yet in addition to existing efforts, I see new signs that premium video sites are starting to understand how strategic it is for them to incent user engagement. New steps are being taken to make deeper, more consistent engagement a reality, not just a goal.
For example, just yesterday CBS announced its "Social Viewing Rooms" which allow users to view programs together while commenting, interacting and finding each other (note this is something that Paltalk and others have pursued for a while). It wasn't clear from the announcement, but I think a critical success factor for CBS will be allowing users to bring existing friends (from Facebook, MySpace, etc.) into the rooms, rather than requiring new relationships to be built.
I found another example in a presentation I recently attended by Ian Blaine, thePlatform's CEO. In it, he made clear that his company is planning a big push into engagement-oriented features ranging from recommendations to ratings to social networking via sister company Plaxo. Still another initiative is "MediaFriends" a clever application that's coming soon from Integra5 which converges text messaging and social networking with viewing across multiple screens. Finally, another is from Volo Media, which is today announcing a plug-in for iTunes that allows one-touch sharing, bookmarking and more, helping open up a window from iTunes into the larger web environment.
All of these activities are in addition to other social media capabilities being brought to premium video from companies like KickApps, PermissionTV, Brightcove, Gotuit and Magnify.net. Then of course there's the steady migration of premium video into YouTube, which is the granddaddy of video sharing and social engagement.
Broadband is much more than an exciting new distribution outlet for video providers, it's also a whole new platform for extending social behaviors that are deeply valued and highly ingrained in all of us into the virtual world. Embracing opportunities for deeper engagement with and around premium video means thinking of viewers more as participants and less as passive audiences. When done right the payoffs in engagement, loyalty, viewing time and monetization will be substantial.
What do you think? Post a comment now!
Categories: Video Sharing
More news today in the fiercely competitive video management, publishing and delivery space. KickApps, a social media platform provider and Akamai, the leading content delivery network, have announced a partnership integrating KickApps's Video Player Studio with Akamai's Stream OS video management system. On Friday I spoke to Michael Chin, KickApps's SVP of Marketing to learn more about the joint offering's benefits.
I look at this deal as a front-end/back-end marriage, bringing together the two companies' complimentary capabilities as they seek to stake out new advantages in this market. KickApps, which has a roster of media companies, sports teams and others using its turnkey social media applications, has recently released its Video Player Studio, enabling customers to build on-demand customized video players for their sites.
Meanwhile Akamai's Stream OS has been focused on the back-end tasks of video management and publishing, such as uploading/storing/editing video and metadata, distributing video through managed RSS feeds, and controlling syndication through business rule creation and geo-targeting.
Michael sees the joint offering's key differentiators as comprehensive out-of-the box functionality, improved flexibility/time to market and integrated social media features (rating, tagging, commenting, etc.).
KickApps is also counting on financial benefits to lure customers. It uses pay-as-you-go CPM-based pricing vs. the typical platform license fee model used by others. Large media companies usually buy out their entire KickApps-generated inventory at an agreed-upon CPM, while smaller companies stick to an ad revenue share approach. Another financial lever in the deal is that KickApps has negotiated very favorable CDN pricing from Akamai, which gives it more pricing flexibility for customers.
Michael believes that between the broader feature set and pricing advantages, the KickApps-Akamai joint offering will be well-positioned to appeal to customers of competitors like Brightcove, Maven (Yahoo) and thePlatform (Comcast), not to mention smaller players in the space who have narrower feature sets.
The KickApps-Akamai partnership continues to raise the competitive bar in this space. These are important, real differentiators the companies are using. That said, this space is very fluid, and in the coming weeks there will be at least 3 other companies which I've spoken to recently which will raise the bar in still other ways. This is a space that continues to evolve, as customer needs shift and their revenue pressures intensify. More news coming soon.
What do you think? Post a comment now.
(Note: Akamai is a current VideoNuze sponsor and KickApps is a former sponsor)
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!
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!
Yesterday Magnify.net, a company I've previously written about, released its version 3.0, introducing new social features and also Pro and Enterprise versions. Magnify's CEO Steve Rosenbaum gave me an update.
Magnify is a platform that enables enthusiasts to assemble relevant video from sharing sites (YouTube, Metacafe, Dailymotion, others) into channels. One of the things I originally liked about the Magnify approach is that it is a powerful avenue for would-be curators to simplify the morass of video now available at disparate locations into one easy-to-access area for others with similar interests. The concept has clearly proven popular: since I wrote the original post in October '07 the number of Magnify channels has roughly doubled from 17,500 to 33,000+ and page views have spiked to 18 million this month.
The social features Magnify is introducing in its 3.0 version are aimed at creating deeper community interaction within the channels and are a natural evolution for the company. Quite frankly, they're something I would have expected earlier (chalk it up to finite resources?). The social features allow members to create and view profiles, "friend" each other and to track and subscribe to other members' activities. There's also integration with Twitter, Mogulus and Flickr.
Reactions to Magnify's move have been mixed and raise interesting questions about the interplay of social media and broadband video. For example, if I understand TechCrunch writer Erick Schonfeld's perspective correctly, he just doesn't buy into the idea that video is a solid foundation for community building and that the existing social networks can and do incorporate video just fine, thereby obviating the need for community within Magnify's channel context. While he rightly identifies a potential logistical issue of Magnify not offering cross-channel profiles, and simmering social networking saturation, overall I think he's underestimating the potential of video as a catalyst for social interaction.
Using well-organized and curated video as a foundation for community development actually makes a ton of sense. In our media-saturated society, video is a common and defining thread for starting and sustaining our interactions. As one example, Steve pointed me to the "Native American Tube" channel at Magnify. Have a look, there are 388 members and counting, and see how active the back-and-forth commenting is? People have strong and passionate affiliations with particular videos, programs and even networks - and want to share their thoughts.
Meanwhile, for all the growth of Facebook, MySpace and Bebo, social media is far from a mature space. At last week's Media Summit, the integration of social media and video was among the hottest topics. The reality is that existing media brands (especially in the niches) and aspiring ones like those Magnify is powering have a strong ability and economic incentive to create community and interaction opportunities for their audiences. I expect we'll see no let up in their enthusiasm, and Magnify's social tools, as they further evolve, will become a key part of the company's success.
(Note: if you want to know more about this topic, yesterday there was a webinar sponsored by KickApps and Akamai. KickApps helps companies set up their own social networks and is getting significant traction in the media space.)
I had 3 key takeaways from the 2008 Media Summit which just wrapped up in NYC. The event just keeps getting better - great keynotes, terrific informal hallway chit-chats/networking and tons of well-directed energy. Though the event's agenda is broad, I was focused on the video-related elements. Here are 3 takeaways:
1. Iger and Moonves Get Tech; Lots of Innovation/Growth Ahead
A clear highlight for all attendees was the 2 morning keynote interviews, day 1 with Disney CEO Bob Iger and day 2 with CBS CEO Leslie Moonves. Both were ably conducted by senior Businessweek editors. Until a couple years ago, big media was in a defensive crouch regarding technology's uninvited incursion into their businesses. No more. Iger and Moonves are obviously convinced that technology, the Internet and broadband video delivery are now their companies' friends. Iger in particular really pounded this theme home.
An example of how technology helps which Iger repeatedly touched on was how Disney will leverage the platform of Club Penguin, its recent acquisition, to build communities for other properties (e.g. "Cars", "Pirates," etc.). These moves are intended to engender ever-greater levels of engagement. By the way, if you're a parent of youngsters and you've ever bemoaned how Disney's gotten its hooks deeply into your kids, you ain't seen nothing yet!
Moonves was emphatic that the Internet extends the value of CBS properties. March Madness was an example he offered. Three years ago it generated $250K of broadband subscription revenue. Two years ago CBS converted to ad-support and generated $4M. Then last year it generated $10M and this year is projected for $23M. And as Moonves pointed out, other than bandwidth, it's all incremental profit for the company. Echoing another conference theme, he further added that "the Internet should not be used to just regurgitate TV," but rather for the medium's unique capabilities.
Iger's and Moonves's mantras are no doubt being sent down to the troops from the executive suite. That suggests we can all expect a whole lot of tech-based innovation springing from these media giants.
2. Engagement and Originality: Buzzwords or More?
Two touchstones in many sessions were "engagement" and "originality." Both reflect the evolving viewpoint that broadband video has its own unique capabilities and that breaking through requires going far beyond traditional, passive programming approaches. With respect to engagement, the concept of introducing "social media" opportunities was often cited as the key tactic. An amorphous term, social media refers to all manner of user participation: content sharing, interactivity, personalization, mashups, uploading, commenting, rating and so on. Basically it's anything that gets viewers to do more than just sit back and enjoy the show. (For those looking to learn more, note next week's webinar on social media, presented by VideoNuze sponsors KickApps and Akamai)
Regarding originality, this relates back to Moonves's comment about not using the medium for regurgitation of TV shows (though to be sure there's value to that). Many people echoed that theme, emphasizing broadband must be used for original programming. The proliferation of independent "broadband studios" is encouraging early evidence that the originality bar will keep rising, prompting established and startup players to harness broadband's limitless possibilities.
3. Missing in Action: Paid business models
It wasn't that long ago that discussions about broadband video business models focused evenly on paid and ad-supported. No more. The paid model was completely missing in action at the event. I think I can count on one hand the number of times the concept was raised in sessions. Also MIA was DRM, the paid model's enabler (or torturer, depending on your perspective).
I detect a broad consensus that the broadband video industry has hitched its wagon to free ad-supported video for the foreseeable future. Many of you know I've been a long-time and enthusiastic proponent of this approach and I'm extremely happy to see things unfold this way. Though the broadband video ad model is still immature, all macro trends point to a bright future. One in particular is video syndication, which I wrote about 2 days ago. Syndication was a dominant theme, as panel representatives from both large and small content providers enthusiastically embraced it. See my post earlier this week, "Welcome to the Syndicated Video Economy" for more on this.
Ok, there you have it. There's plenty more tidbits I took away from the summit, so feel free to ping me if you'd like. And if you attended, post a comment and share your takeaways as well!
Lately I've been thinking a lot about where there may be potential points of intersection between user-generated video and brand marketing.
On the one hand, YouTube and others have demonstrated there's huge interest among amateur producers in creating and posting video content. Since the overwhelming majority of these producers do not make any meaningful money from these videos, their motivation is emotional. On the other hand, brands are grappling with things like how to break through the clutter, deepen consumer engagement, create more authenticity and build loyalty.
So it seems like there should be a natural point of intersection if brands could incent their passionate customers to create videos which not only sang the praises of their favorite products but actually provided valuable information sought by other prospective customers. Offering these videos would enable customers to show off their favorite products in action and also provide a valuable service to prospects. The concept is sort of like a video-based TripAdvisor, but not limited to travel.
Here's an example from a personal experience. Recently I've been in the market for a 50+ inch HDTV. If you've been in this mode recently you know the drill - lots of online research, reading users' comments, going to stores to see different models, etc. Even after doing all this, I still felt like I was missing something. I really wanted to see the intangibles - what distance seemed right, what's the right height for the stand, what were the ambient issues, how were accessories connected and so on.
In short, I was looking for actual owners to provide short, but informative videos showcasing how the TV actually worked out when brought into their homes. To be sure, there's no shortage of text comments to this effect. But the best I could find beyond text was a link at Amazon to "Share your own customer images." It seems like such a natural to me that online retailers, review sites and TV manufacturers should all provide a user-generated video platform for consumers to upload videos providing further information on their TVs.
What I'm describing is not another brand-sponsored UGC contest, but rather solid consumer-contributed product information. T-Mobile has something like this running with Current TV right now, but seems to really be the exception. I looked at the web sites of Sony, Samsung, Panasonic, Sharp, Philips and Mitsubishi and, although in some cases there are buying guides and FAQs, none of them seek to harness the enthusiasm of their actual customers by enabling video contributions.
Maybe I'm missing something, but I think this is a big untapped opportunity. I know companies like ViTrue and StashCast are pursuing opportunities like this, and then there are countless private label social network platforms like KickApps, Ning and others (TechCrunch has a good list here) that also enable some flavor of this. But I just haven't seen this concept clearly or pervasively implemented yet. If you have, please post a comment. I just have to believe that some smart brands - particularly those selling complex, expensive products that benefit from video-based information - are going to realize their passionate customers are incredible assets just waiting to be empowered to speak out through user-generated video.
Traditional relationships between content providers and powerful aggregators/distributors are being fundamentally challenged broadband video. That's because broadband is an open medium, allowing content providers and brands to enjoy unprecedented direct access to their target audiences. This diminishes a lot of the leverage that aggregators/distributors have traditionally had.
Yet, as I have said for a while, I believe that there's a place for direct-to-consumer and third party distribution/promotion to co-exist harmoniously. But finding good examples has been a challenge. That's why a deal that KickApps announced today with MySpace and VIBE for its "Vibe Verses 3" promotion resonated strongly for me.
In a nutshell here's how the deal works: a major social networking site (MySpace) has partnered with a specialty publisher (VIBE) for a user generated video-dominated contest (VIBE Verses 3) to build a long term user-generated franchise (powered by KickApps), which will be mainly supported by ad sales.
To understand the deal better, I talked to Michael Chin, SVP of Marketing at KickApps earlier this week. For those not aware, VIBE is a major brand for the urban scene and VIBE Verses 3 is the third round of a contest that "challenges aspiring rap artists to upload videos of themselves performing original lyrics over pre-selected music tracks." Basically you can think of it as an "online-only, urban American Idol." All of the video uploads and social networking is powered by KickApps.
What's interesting to me is that MySpace is involved as the main promotional partner, seeking to build out its strength in this key category. As a large general purpose community site, they're partnering with VIBE, a well-known brand in the category, to bring more value to their members. As Josh Brooks at MySpace puts in the release, "VIBE is a pillar in hip hop and this partnership will help solidify MySpace as the place online for established and developing hip hop artists."
And according to Michael, this was done as a biz dev deal, not an ad sales deal. MySpace and VIBE believe that together they can build a franchise in hip hop that generates longer term value by creating a large, engaged audience of interest to other brands (e.g. Coke, Nike, etc.).
Of course none of this would be possible without broadband - it's the enabler for the user-generated videos that are at the heart of the contest.
In the open broadband video era where direct access to the consumer is ubiquitous, it's going to take more creativity to make deals work for everyone. I think this one is a good example of what can succeed. The deal serves as a template for how other specialty content providers and aggregators/distributors might work together, tapping user participation to build franchises that leverage each party's core skills and assets.
One of the things I really enjoy about being an analyst in the burgeoning broadband video industry is getting first-hand exposure to all the clever innovation that's going on. I find it endlessly fascinating to hear directly from entrepreneurs on the front lines where the kernel of their idea came from which led to their business plan. A user experience issue? A technology deficiency? A business model flaw? Over the years I've heard many stories. Some kernels have real weight, while some don't quite resonate for me.
Magnify.net falls into the former category. My read is that this is a company trying to solve a real problem with a very clever solution and the right "corporate attitude" to make it a likely winner.
Magnify is actually solving a number of real problems, many of which relate to the highly distributed or "Long Tail" nature of the Internet and broadband video. First is that while consumers love broadband video, finding what they want is problematic. Novelty quickly turns to frustration when rummaging through big video sharing sites to find something relevant. No matter how much users want choice, some level of editorial or "curation" is essential to optimize their experience.
Magnify enables existing enthusiast or vertical web sites (whether independent or major media) to obtain video from the best video sharing sites (YouTube, Metacafe, etc.) and coherently present a screened assortment to their users. The sites' use their editorial skills to sort the wheat from the chafe, with easy-to-use admin tools ensuring that no offending video slips through the cracks.
So the second problem Magnify solves is enabling thousands (17,500 and counting to be exact) of sites to provide quality video to their users without the hassle and expense of creating it themselves (the "matchmaker" role). These sites get 50% of the revenue from the ads Magnify sells around the video (or they can keep up to 50% of the inventory to sell themselves), leveraging their audience and subject matter expertise. Incorporating video into web sites is becoming online table stakes. I agree with Steve, in the years ahead, sites without video are going to look "charming".
The only real hole I can find in Magnify's model is that it doesn't currently compensate the content creators themselves (a la Revver for example). However I'd expect that to change as creators upload directly to Magnify and the company's network and traffic builds out over time.
Lastly, I like Steve's attitude. He views the market as an incredibly expanding pie, and not "winner take all." As a result, while there are others who touch on Magnify's space (Brightcove, ROO, VideoEgg, Ning, KickApps, etc.), he's less concerned about competition per se and matching feature-for-feature, but rather on responding to the needs and wants expressed directly by their own user base. Companies that do this ultimately win, regardless of competition.
The Magnify story plays into a number of areas I follow closely - the changing role and power of video distributors, the continued "nichification" of video, the challenge of video discovery and the reliance on ads, not subscription fees. To the extent that their approach succeeds it will further morph traditional video models. For a 10 person company that's only done an angel round, they've accomplished a lot in addressing genuine Long Tail issues in the broadband video industry. (Btw, TechCrunch has 2 great reviews, here and here).