YouTube TV is back as this year’s World Series presenting sponsor and as with last year, Google’s skinny bundle is once again dominating. Watching the game last night (go Sox!) it was impossible to not be exposed to the brand and also some very creative elements of the “Watch like a fan” campaign.
YouTube TV renewed its World Series sponsorship for 2018 and 2019 with MLB back in March of this year. As with 2017, before the first pitch was thrown, there was a highly produced 90 second ad. At first it looked like a promo for various Fox networks, though when the Google Home demo popped in it became clear it was for YouTube TV.
Major League Baseball is becoming a huge beneficiary of YouTube TV’s aggressive expansion plans. Under a new deal announced this morning, YouTube TV will be the “presenting sponsor” of the 2018 and 2019 World Series, the same groundbreaking role YouTube TV had in last Fall’s classic. That deal had many innovative aspects and introduced the YouTube TV brand and service to millions of viewers.
I'm pleased to present the 205th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.
Colin is in London this week and shares observations on the intense battle for broadband subscribers in the U.K. BT has been aggressively laying fiber in a bid for broadband subscribers. It recently spent about 1.4 billion pounds on soccer rights to supply its BT Sport channels. Colin says BT has seen lift in both broadband and pay-TV subscribers as a result. One wonders whether Google could try something similar here in the U.S. by bidding for NFL and other rights somewhere down the road?
Speaking of the NFL, it and Major League Baseball were in the news this week for filing a brief with the Supreme Court urging review of broadcasters' challenge to Aereo. The leagues basically asserted that if Aereo is deemed legal, more of their games will migrate to cable, which of course has been happening anyway. Meanwhile Aereo's lead investor Barry Diller said this week he could see a 35% adoption rate for Aereo long-term, primarily driven by millennials. This would be hugely disruptive if it were to happen.
Listen in to learn more!
Click here to listen to the podcast (18 minutes, 11 seconds)
If you think your monthly pay-TV bill is already pretty expensive, then brace yourself for rate increases that will definitely be happening over the next several years, particularly in certain geographic areas of the U.S. Why? Because the cost of programming continues to spiral, led by sports. In fact, over the past 24 months, at least $80 billion has been committed by broadcast and cable TV networks to televise sports in the U.S. (note this includes $6 billion, the minimum either News Corp. or Time Warner Cable will likely pay for TV rights to the L.A. Dodgers' games).
The chart below itemizes all of the deals that I'm aware of; no doubt there are others as well that aren't included. Also not included are the expected increased costs of renewals for some of sports' highest-profile events like the Super Bowl and NCAA March Madness in coming years.
If you were trying to tune out last week, whether lying on a beach or on a family getaway, you didn't miss all that much exciting online video-related news. However there were some items worth noting and below I've highlighted five that caught my eye.
Daisy Whitney and I are pleased to present the 48th edition of the VideoNuze Report podcast, for February 5, 2010.
This week we get started with me reviewing yesterday's post about FreeWheel now serving close to 2 billion video ads per month and signing up MLB Advanced Media as their newest customer. FreeWheel's Doug Knopper told me that it is benefitting from both its new customers and also from year-over-year increases in ads served for existing customers. FreeWheel is also in the middle of the "syndicated video economy" that I've written before, having integrated with big third parties such as YouTube, AOL, MSN, Fancast and others.
Then Daisy describes her interview from last week's NATPE show with Chloe Sladden, director of media partnership for Twitter. The company is planning to launch its Media Developer's Platform later this year, along with new measurement tools. Daisy shares what she learned.
Click here to listen to the podcast (12 minutes, 38 seconds)
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FreeWheel is on a roll, now serving almost 2 billion video ads/month, doubling its volume just since November, 2009. In addition, the company has added Major League Baseball Advanced Media to its customer roster and began implementing ads during the fall playoff season. The MLB win comes on top of recently announced customers Turner Broadcasting System and VEVO. FreeWheel's co-CEO/co-founder Doug Knopper brought me up to speed on all the news late last week.
Doug said that part of the increase in FreeWheel's volume is attributable to the additional customers that have come on board, but he's also very excited about the year-over-year growth in ad volume FreeWheel is seeing for longer-term customers ("same store sales" if you will). FreeWheel is seeing big increases due to 3 factors: customers posting greater quantities of video, plus deepening viewership of that video (all of this borne out by comScore's '09 video consumption data); customers' improving ability to actually sell ads against these videos (reflecting the shift of budgets to the online video medium); and reduced friction through the emergence of "accepted practices" in ad operations.
FreeWheel is also benefiting from its specialization in helping content providers monetize their video on third-party sites (e.g. YouTube, AOL, MSN, Fancast, etc.). More and more content executives are realizing that sizable viewership opportunities exist by syndicating their video outside of their own properties. Doug said that every content company FreeWheel is now talking to is interested in some kind of syndication.
Doug described 3 types of syndication he's seeing: (1) across a family of sister corporate sites, such as PGA.com providing CNN.com video, which are both owned by Turner; (2) between affiliated entities like local MLB teams providing video to the main MLB.com hub and (3) externally, to unaffiliated 3rd parties, such as WMG music providing videos to YouTube. Given all this syndication activity, I was interested to learn from Doug what percentage of the ads FreeWheel serves fall into each of these 3 buckets vs. what percentage are served on the customer's sites themselves. Doug said that FreeWheel is pulling those numbers together in a way that ensures its customers privacy and will get back to me when he has them.
In addition to the above syndication activity, FreeWheel is seeing experimentation with delivering ads to mobile devices, convergence/CE players and Internet-enabled TVs. In all these cases, customized ad policies determine who sells what ad inventory and how revenue is shared and reported. Powering all of this has been part of FreeWheel's core mission from inception, making it a key player in what I've called the 'syndicated video economy."
FreeWheel's growth echoes what I've been hearing lately from both video ad network executives and video content providers. They too are talking about rapidly rising volumes and improving monetization. As I wrote recently, I've been impressed lately by efforts to make video ads more engaging and provide a better ROI, a trend I see continuing. Taken together, while it's still relatively early days, online video advertising seems to be making great strides.
What do you think? Post a comment now (no sign-in required)
Daisy Whitney and I are pleased to present the 29th edition of the VideoNuze Report podcast, for August 28, 2009.
In this week's podcast we discuss comScore's rankings of video ad networks' potential reach for July, 2009. I offered a first look at these rankings in Wednesday's post. As I pointed out, these rankings represent the aggregate reach of each ad network's publisher list. This is different from a ranking of actual reach, which comScore is working on, and plans to begin releasing at some point in the near future. Daisy and I remind listeners that potential reach is an imperfect measure, but it is still an important filter for media buyers trying to gain insight into who the major video networks are.
Unrelated, I touch base on last week's podcast in which Daisy and I discussed the Southeastern Conference's shortsighted ban on fan-generated video in stadiums. I raise the topic because earlier this week I had the pleasure of taking my 9 year-old daughter to Fenway Park to see a Red Sox-White Sox game. All around us were people taking pictures and video. And go to YouTube and you'll find plenty of fan video of key Red Sox moments.
Somehow fan video doesn't seem to bother MLB as it does the SEC. I don't claim to understand the difference in thinking, but Daisy notes that MLB has been among the most forward-looking sports leagues around. Daisy is so peeved at the SEC that she's protesting by vowing never to attend an SEC game (a relatively insignificant threat since she's in fact never attended an SEC game and lives on the other side of the country!)
Click here to listen to the podcast (13 minutes, 53 seconds)
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Following are 4 news items worth noting from the week of August 17th:
CBS's Smith says authentication is a 5 year rollout - I had a number of people forward me the link to PaidContent's in-depth coverage of CBS Interactive CEO Quincy Smith's comments at the B&C/Multichannel News panel in which he asserted that TV Everywhere/authentication won't gain critical mass until 2014.
I was asked what I thought of that timeline, and my response is that I think Smith is probably in the right ballpark. However, these rollouts will happen on a company by company basis so timing will vary widely. Assuming Comcast's authentication trial works as planned, I think it's likely to expect that Comcast will have its "On Demand Online" version of TV Everywhere rolled out to its full sub base within 12 months or so. Time Warner Cable is likely to be the 2nd most aggressive in pursuing TV Everywhere. For other cable operators, telcos and satellite operators, it will almost certainly be a multi-year exercise.
NFL makes its own broadband moves - While MLB has been getting a lot of press for its recent broadband and mobile initiatives, I was intrigued by 2 NFL-related announcements this week that show the league deepening its interest in broadband distribution. First, as USA Today reported, DirecTV will offer broadband users standalone access to its popular "Sunday Ticket" NFL package. The caveat is that you have to live in an area where satellite coverage is unattainable. The offer, which is being positioned as a trial, runs $349 for the season. With convergence devices like Roku hooking up with MLB.TV, it has to be just a matter of time before the a la carte version of Sunday Ticket comes to TVs via broadband as well.
Following that, yesterday the NFL and NBC announced that for the 2nd season in a row, the full 17 game Sunday night schedule will be streamed live on NBCSports.com and NFL.com. Both will use an HD-quality video player and Microsoft's Silverlight. They will also use Microsoft's Smooth Streaming adaptive bit rate (ABR) technology. All of this should combine to deliver a very high-quality streaming experience. But with all these games available for free online, I have to wonder, are NBC and the NFL leaving money on the table here? It sure seems like there must have been some kind of premium they could have charged, but maybe I'm missing something.
Metacafe grows to 12 million unique viewers in July - More evidence that independent video aggregators are hanging in there, as Metacafe announced uniques were up 67% year-over-year and 10% over June (according to comScore). I've been a Metacafe fan for a while, and their recent redesign around premium "entertainment hubs" has made the site cleaner and far easier to use. Metacafe's news follows last week's announcement by Babelgum that it grew to almost 1.7 million uniques in July since its April launch. Combined, these results show that while the big whales like YouTube and Hulu continue to capture a lot of the headlines, the minnows are still making swimming ahead.
Kodak introduces contest to (re)name its new Zi8 video camera - It's not every day (or any day for that matter) that I get to write how a story in a struggling metro newspaper had the mojo to influence a sexy new consumer electronic product being brought to market by an industrial-era goliath, so I couldn't resist seizing this opportunity.
It turns out that a review Boston Globe columnist Hiawatha Bray wrote, praising Kodak's new Zi8 pocket video camera, but panning its dreadful name, prompted Kodak Chief Marketing Officer Jeffrey Hayzlett to launch an online contest for consumers to submit ideas for a new name for the device, which it intends to be a Flip killer. Good for Hayzlett for his willingness to change course at the last minute, and also try to build some grass roots pre-launch enthusiasm for the product. And good for the Globe for showing it's still relevant. Of course, a new name will not guarantee Kodak success, but it's certainly a good start.
Enjoy your weekend!
VideoNuze readers will recall that back in Dec '08, my 2nd prediction for 2009 was that mobile video was finally going to take off. Among the drivers I identified, the main one was clearly the massive, and growing, popularity of the iPhone. But despite all of its gee-whiz capabilities, the iPhone 3G, which was then the latest one on the market, and was running the iPhone OS 2.0, still wasn't really optimized for video.
Flash forward to June '09 and the release of the iPhone OS 3.0, which is downloadable to iPhone 3G, and pre-installed on the iPhone 3GS, and we can see that Apple now has the architecture in place to fuel a massive takeoff of mobile video streaming.
Following is a deep dive explanation of why that is, based on a detailed conversation I had John Bishop, SVP of Business Development & Strategy at Inlet Technologies, an encoding company that's involved with recent iPhone video apps, an excellent new white paper from Akamai, "HTTP Streaming for iPhone Best Practices" and other research I conducted. (For those that want to get further into the weeds, note also that Akamai, Inlet and Turner Sports have an upcoming webinar on this topic.) If you're a video provider looking to capitalize on mobile video distribution, and the iPhone in particular, all of this is crucial to understand.
The most important video-related elements Apple has released are support for HTTP streaming, a new protocol for adaptive bit rate (ABR) streaming and a new iPhone media player that can handle both. In addition, a significant increase in battery life (especially important to retain phone functionality) is enabled by a hardware-based video decoder. And the iPhone supports "HSDPA," an enhanced 3G protocol AT&T is rolling out, which provides up to 7.2 megabit per second delivery, guaranteeing outstanding video quality. All of these elements, when combined with the iPhone's open (well, relatively at least) App Store and web browsing, offer video providers a breakthrough mobile video environment.
HTTP-based streaming is particularly key because CDNs already have massive deployments of HTTP (the web delivery standard) servers. That means they avoid significant capex to support proprietary video streaming protocols like RTSP and RTMP, and can instead focus just on hardening their HTTP infrastructure to scale video distribution.
Apple's new ABR streaming protocol means a far superior user experience that obviates disruptive buffering and users having to make confusing choices like "hi res" or "low res." ABR streaming was pioneered by Move Networks. Microsoft and Adobe now each have their own ABR streaming approaches.
Importantly, because the iPhone supports H.264, video providers can use existing encoding vendors like Inlet to simply create multiple iPhone-compatible video files encoded at different bit rates that are then delivered to their CDN for iPhone distribution. No intermediary "encapsulation" step needs to be taken to support Flash for example. As the iPhone's media player auto-detects available mobile bandwidth, it continuously re-selects the optimal video file to stream. Inlet makes a key contribution in this process by doing "key frame alignment" - essentially allowing the new file being streamed to start at the same frame where the old file left off. Pretty cool stuff.
From the content provider's standpoint, iPhone-directed video can either be embedded in a web page, or as part of an app, for distribution in the iPhone's gigantic app store. The open web approach of course means it's available for all to see. On the other hand, the app route means greater control of the brand, user experience and business model (e.g. free, paid, authenticated, etc.), though it will involve time and money is needed for development.
This whole paradigm is still so new that we've only begun seeing the first iPhone video apps come to market. Examples include the updated version of MLB.com's At Bat app, the live Aug. 7th concert from Underworld, the PGA Championship app from Turner Sports and the PGA, and yesterday, the launch of the HSN "shop app." I can relate to the value of the PGA app - I was in a car on my way back to Boston on Sunday afternoon, furiously - and unsuccessfully - trying to follow the Yang-Woods showdown shot-by-shot on my Blackberry (I'm a Verizon sub, so no iPhone for me, grrrr....). If I'd had an iPhone, would I have spontaneously paid $1.99 for the PGA app so I could watch the action? In a heartbeat.
Mobile video is an incredibly exciting extension of the broadband experience users have come to love, except with the additional benefit of being untethered. The iPhone is the first environment that brings all the necessary elements together and will, in my view, drive an explosion of mobile video streaming apps (though I concede to being uncertain what AT&T will think of all this). Think about video apps that are yet to come from folks like Hulu, Netflix, and others. No doubt we'll see Android, Palm and Blackberry further fuel the addressable market. Add it all up and there's a lot of growth ahead in the mobile video space.
What do you think? Post a comment now.
Roku has announced this morning that MLB.TV Premium subscribers will now be able to access the service on their TVs via the $99 Roku video player. MLB.TV joins Netflix, Amazon, and blip.tv programs already accessible via Roku. According to Brian Jaquet, Roku's director of corporate communications, who I spoke to last week, dozens of other partners will be added to the service by the end of '09. The MLB.TV integration is obviously an exciting value proposition for its subscribers and for Roku adds live programming for the first time.
To go a level deeper than the headlines about the deal that you're likely reading elsewhere this morning, here are 3 key takeaways:
1. Roku's textbook "Crossing the Chasm" marketing strategy could make it a big-time winner - I've long said that as remarkable as the growth in broadband viewership has been over the past few years, what's more remarkable is that virtually all of this viewership has occurred not on consumers' primary viewing device - the TV - but rather on computers. As such, the last and most significant catalyst in broadband video's evolution and for its disruptive power to be realized is broadband connections bridging to the TV, for the masses.
The problem is that while avid market watchers and participants like you and me know what the above buzzword gobbledygook means, average consumers not only don't know, but they don't care. For technology marketers seeking to penetrate mainstream buyers, this is in fact the central challenge described in Geoffrey Moore's classic book, "Crossing the Chasm" (which I highly recommend if you want to understand the technology product marketing further). I have a lot of respect for Roku because it understands all of this and because it is following a textbook chasm-crossing marketing strategy tailored to the pragmatist mindset of its target market.
Roku's strategy reads right out of Moore's book: piggybacking off popular existing brands (Netflix, MLB, etc.), focusing on the "whole product," pursuing niche applications first and presenting its benefits "face-forward" as Moore says (e.g. see Roku's home page that blares "50,000+ videos to watch. INSTANTLY"). By doing all of the above and also pricing low ($99) and keeping the product radically simple, Roku is speaking strongly to its prospects and minimizing their purchase risk (a critical barrier in mainstream technology adoption). All of this means Roku could be a big-time winner in the convergence race.
2. Rapid technology changes are driving broadband video innovation - I asked Brian last week if Roku has any plans to add a hard drive to the box, which would allow both storage/downloading and possibly an ability to cache content for higher-quality delivery. His response, that "we believe streaming is robust enough to accomplish all of our objectives," dramatically illustrated for me how quick technology change is in the broadband market. I say this because just 6 short years ago, I consulted with Maven Networks, whose whole original value proposition was built around a desktop app for video downloading. The point of it was to work around streaming limitations to offer content providers and users a breakthrough experience. Streaming technology advances have quickly and completely eradicated Maven's whole initial reason for being.
This example illustrates how broadband market participants must never accept today's technologies as the defining parameters of future services (or as a wise CTO mentor of mine used to say, "Never fight technology progress. It's relentless and it will always win."). I try to constantly remind clients and other industry colleagues that it is crucial to understand the strands of technology progress - where key challenges lay, how quickly they might be resolved, what motivations are at work in fueling or stymying progress. What Roku is doing today would have been impossible just 5 years ago. The same goes for YouTube, the iPhone, etc, etc. To succeed in broadband it is crucial to acknowledge current technology limitations, but simultaneously look beyond them and stay aligned with technology's relentless progress.
3. A major video industry PR battle for consumers' hearts and minds is about to explode - As players like Roku bring well-loved brands like Netflix, Amazon and MLB to the TV, the degree of consumer awareness and interest in convergence or "over-the-top" services is going to grow considerably. It will be increasingly common to go to a cocktail party and hear 2 neighbors carry on about how cool it was to watch this show, or that game, or this movie, all without their incumbent video service provider involved. To be sure "cord-cutting" is not going to skyrocket any time soon, but what is going to happen is the kind of buzz-building that can lay the groundwork for major future change (e.g. remember when you first started hearing about how fast or accurate this new thing called "Google" was? Pretty soon everyone was using it for search).
Cable companies in particular know this, and are preparing an all-out response with TV Everywhere. I've been critical of Time Warner CEO Jeff Bewkes's hyping of TV Everywhere, though I'm beginning to appreciate more why he's doing it. The cable/satellite/telco ecosystem must not only stay relevant in the coming convergence era, they must remain consumers' preferred providers. The money at stake is in the tens of billions of dollars. All that means that as consumers we should anticipate a dramatic increase in the decibel level for promotion of various video alternatives. A pitched PR battle for our hearts and minds lies ahead.
What do you think? Post a comment now.
Yesterday's announcement by Netflix that it will be adding to its Watch Instantly library past seasons ABC's "Lost," "Desperate Housewives," "Grey's Anatomy" and "Legend of the Seeker" is another step forward for Netflix in strengthening its online competitiveness.
At a broader level though, I think it's also further evidence that the near-term success of Watch Instantly and other "over-the-top" broadband video services is going to be tied largely to deals with broadcast TV networks, rather than film studios, cable TV networks or independently-produced video sources.
Key fault lines are beginning to develop in how premium programming will be distributed in the broadband era. Content providers who have traditionally been paid by consumers or distributors in one way or another are redoubling their determination to preserve these models. Examples abound: the TV Everywhere initiative Comcast/Time Warner are espousing that now has 20+ other networks involved; Epix, the new premium movie service backed by Viacom, Lionsgate and MGM; new distribution deals by the premium online service ESPN360.com, bringing its reach to 41 million homes; MLB's MLB.TV and At Bat subscription offerings; and Disney's planned subscription services. As I wrote last week in "Subscription Overload is On the Horizon," I expect these trends will only accelerate (though whether they'll succeed is another question).
On the other hand, broadcast TV networks, who have traditionally relied on advertising, continue mainly to do so in the broadband world, whether through aggregators like Hulu, or through their own web sites. However, ABC's deal with Netflix, coming on top of its prior deals with CBS and NBC, shows that broadcast networks are both motivated and flexible to mine new opportunites with those willing to pay.
That's a good thing, because as Netflix tries to build out its Watch Instantly library beyond the current 12,000 titles, it is bumping up against two powerful forces. First, in the film business, well-defined "windows" significantly curtail distribution of new films to outlets trying to elbow their way in. And second, in the cable business, well-entrenched business relationships exist that disincent cable networks from offering programs outside the traditional linear channel affiliate model to new players like Netflix. These disincentives are poised to strengthen with the advent of TV Everywhere.
In this context, broadcast networks represent Netflix's best opportunity to grow and differentiate Watch Instantly. Last November in "Netflix Should be Aggressively Pursuing Broadcast Networks for Watch Instantly Service," I outlined all the reasons why. The ABC deal announced yesterday gives Netflix a library of past seasons' episodes, which is great. But it doesn't address where Netflix could create the most value for itself: as commercial-free subscription option for next-day (or even "next-hour") viewing of all prime-time broadcast programs. That is the end-state Netflix should be striving for.
I'm not suggesting for a moment that this will be easy to accomplish. But if it could, Netflix would really enhance the competitiveness of Watch Instantly and its underlying subscription services. It would obviate the need for Netflix subscribers to record broadcast programs, making their lives simpler and freeing up room on their DVRs. It would be jab at both traditional VOD services and new "network DVR" service from Cablevision. It would also be a strong competitor to sites like Hulu, where comparable broadcast programs are available, but only with commercial interruptions. And Hulu still has limited options for viewing on TVs, whereas Netflix's Watch Instantly options for viewing on TVs includes Roku, Xbox, Blu-ray players, etc. Last but not least, it would also be a powerful marketing hook for Netflix to use to bulk up its underlying subscription base that it intends to transition to online-only in the future.
Beyond next-day or next-hour availability, Netflix could also offer things like higher-quality full HD delivery or download options for offline consumption. Broadcasters, who continue to be pinched on the ad side, should be plenty open to all of the above, assuming Netflix is willing to pay.
I continue to believe Netflix is one of the strongest positions to create a compelling over-the-top service offering. But with numerous barriers in its way to gain online distribution rights to films and cable programs, broadcast networks remain its key source of premium content. So keep an eye for more deals like the one announced with ABC yesterday, hopefully including fast availability of current, in-season episodes.
What do you think? Post a comment now.
One might think that the depths of the worst economic recession in decades would be a lousy time to begin asking penny-pinching consumers for additional payments to access content. Yet this is exactly what many video providers plan to do, as a variety of broadband-delivered video subscription plans are beginning to take shape. Based on conversations I've been having with industry executives and what I've been reading, various subscription plans are now underway. This leads me to think that "subscription overload" is on the horizon.
Interest in getting consumers to pay has several sources. Many executives have concluded that advertising alone is an insufficient model, even as the cost of delivering broadband video is actually plummeting. Some of this concern relates to the widespread advertising slowdown, where even established players like the big broadcast networks are being forced to accept rate cuts. These declines cannot be made up with greater ad quantity as there's prevailing worry about just how many ads can be loaded into a broadband-delivered program before the viewer gets turned off.
There is also significant fear of not learning from the demise of the U.S. newspaper industry, which largely adopted an ad-only online business model that hasn't worked (causing some like the NY Times to now consider reinstituting subscription services). Newspapers' woes have become a touchstone in practically every conversation I've participated in recently. Last, but not least, there's no small amount of envy toward cable networks, whose dual subscription/advertising revenue model has allowed them to weather the recession better than most.
Subscription plans seek some combination of differentiators: offering premium video in better windows, at better-quality, with deeper selection, across multiple devices and with some degree of exclusivity. The thinking is that these enhancements will allow subscription services to be distinguished from and co-exist with free ad-supported services. The implicit bet is that these differences will be understood and valued by consumers.
Subscription plans are beginning to leak out, as happened last week in remarks by Disney CEO Bob Iger. Many in the industry (including me) anticipate that Hulu will launch a subscription service soon, particularly as it seeks to become a part of cable operators' TV Everywhere initiatives (which themselves seek to enhance the value of current cable subscriptions).
Other plans are on the drawing board. When I read yesterday, for example, about NBC's Ben Silverman jumping to IAC to form a new video venture, I suspect it's almost a given that the venture will consider some type of premium model. The growth of mobile video is another factor fueling subscriptions. This is what MLB is doing with its new At Bat 2009 subscription app for the iPhone, which builds on its highly successful MLB.TV broadband subscription service.
With so many subscription services underway, it's inevitable that many of them won't get traction. I mean, is it likely that consumers will pay extra so they can see a program online just hours after it airs, instead of a day later? Or so they can receive 1080-equivalent HD quality online, when 720-equivalent HD is available for free? I'm skeptical, even before factoring in the recession-driven belt-tightening many consumers have adopted. The bar for a subscription service to succeed is very high.
Still, with broadband allowing video providers direct access to their target audiences, their well-known brands as powerful enablers, and the crummy advertising climate showing no letup, it is no surprise that the pendulum is swinging heavily toward subscriptions.
What do you think? Post a comment now.
Following are 4 news items worth noting from the week of July 20th:
Apple reports blowout iPhone sales in Q2, continuing to drive market - It was another record quarter, as Apple reported selling 5.2 million iPhones, bringing to 21.4 the total sold to date. This despite acknowledging temporary shortages during the quarter. The iPhone continues to revolutionize the mobile market, and from my standpoint is the key catalyst for both recording and consumption of mobile video. This market is poised for significant growth as new smartphones hit the market along with fixed monthly data plans. Apps like MLB.com At Bat 2009, which offers live streams of games, are certain to be hits and emulated widely.
8 minute video of Amazon's Jeff Bezos discussing lessons learned and Zappos acquisition - You couldn't miss news this week of Amazon acquiring Zappos for around $900M, its largest deal ever. Interestingly, Amazon posted a video on YouTube of Bezos discussing the deal, but not until he walked through several maxims of Amazon's success (obsess over customers, think long term, etc.). The video is extremely informal, with Bezos flipping hand-scrawled notes on an easel and improvising funny anecdotes. It has a slightly random feel (until he gets to the Zappos part, you start to wonder, what's the point of all this?), but I give Amazon and Bezos lots of credit for using video in a totally new way to communicate with stakeholders. I'd love to see more CEOs do the same.
Is Disney CEO Bob Iger serious about creating a subscription site for its online video? This week at Fortune's Brainstorm conference, Iger floated the idea that Disney will offer movies, TV shows and games for paying subscribers. The timing seems more than coincidental as Comcast gears up for its On Demand Online trial. Is Iger serious about this, or is it a head fake from Disney so it can try to negotiate incremental payments from Comcast and others seeking to distribute Disney content online? It's hard to tell, but I'd be curious to see what Disney has in mind for its possible subscription service. Consumers hate the idea of paying twice for anything (even paying once is not so popular), so if Disney is somehow going to create another window where they charge for access to content that's still on, or was recently on cable, that would be an awkward model.
"Mad Men" coming to Comcast's On Demand Online trial - Speaking of the Comcast trial, I was thrilled to hear from David Evans, SVP of Broadband at Rainbow Media (owners of AMC, the network behind Mad Men) at yesterday's CTAM Teleseminar that the show will be included in Comcast's trial and presumably in rollout. David is very bullish on online distribution and the larger TV Everywhere concept, though cautioned that there are many rights-related issues still hanging out there. I'm a huge Mad Men fan (whose new season starts on Aug 16th) and the idea that I don't have to worry about recording each episode or managing space on my DVR, and that I can watch remotely when I'm on the road, all underscore TV Everywhere's value.
There was much reporting yesterday of eMarketer's estimate that NBC generated revenue of $5.75 million from its broadband Olympics video. The firm's press release dismissively called the sum "a passable performance." Others, from the blogosphere to mainstream media piled on, characterizing NBC's video revenues as underwhelming, using terms such as "pittance," "piddling," and "unimpressive."
Let's hold on a second here. At the risk of sounding like an irrepressible NBC supporter, I'd like to offer the alternative viewpoint: NBCOlympics.com's video ad revenues actually don't matter.
Don't get me wrong, when it comes to high-stakes Olympics broadcasting - and a sagging economy to boot - every dime counts. Rather, my point is that by focusing on the broadband ad number (which at virtually any level would have been a mere rounding error on NBC's $1 billion+ of overall Olympic ad revenues) we are getting distracted from NBC's real and very valuable broadband accomplishments.
Consider this: there were more on-demand and live sports choices for Olympics viewers than ever, NBC and its technology partners conquered herculean operational challenges without any major snafus and the foundation was laid for broadband to play an increasingly important and integral role in all future iconic programming events.
Focusing just on the operational achievements for a moment, a conversation I had yesterday with Brick Eksten, President of Digital Rapids, the company that provided all of the video encoding and streaming technology for NBC's live streaming events was a reminder of all the complexities NBC and its partners took on. There were up over 100 live simultaneous feeds that needed to be ingested, encoded in multiple bit-rates and delivered in real time across the globe to the right distribution points. All of this had never been done before.
Unlike domestic implementations or those focusing mainly on on-demand delivery, live broadband delivery from China meant spec'ing out all the delivery systems in advance and then shipping all of the gear well in advance of the event itself. There were many unknown variables, beginning with the vast potential range of concurrent users. So long hours were invested by partners modeling different scenarios to meet targeted delivery quality goals. Compounding matters, Brick explained that due to space, manpower and time limitations, Digital Rapids and others were challenged to push their systems to do things not previously done.
Meanwhile, NBC faced a pioneer's balancing act, simultaneously trying to preserve the value for its on-air broadcast rights/supporting advertisers, while meeting consumers' expectations for broadband on-demand access to everything. NBC could have chosen to charge for broadband access (as CBS originally did with March Madness, and as MLB continues to do) or provide only highlights clips or nothing via broadband at all. Instead, it offered up - at no charge - 2,200 hours of live streaming and 3,000 hours of on-demand.
Some fans on the sidelines have groused this wasn't enough. Now some analysts are saying that NBC could have generated more ad revenue if it had opened the broadband spigot further. These comments miss the bigger point: NBC moved the broadband market dramatically forward with its Olympics coverage. Focusing on what NBC proved with the first "Broadband Olympics," rather than what attributable revenue it generated, is what's most important for all of us to remember.
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Baby Ruth hit a home run at Tuesday night's All-Star Game with its "Take Me Out to the Ballgame" user generated video contest. The contest was heavily promoted during the All-Star Game and ran in association with Major League Baseball.
In case you missed it, the challenge was to creatively sing the classic ballpark tune in 2 minutes or less. The contest received dozens of submissions, which were then narrowed to a list of finalists, judged by a committee of three. The judging criteria was weighted heavily toward originality, but also included creative use and/or incorporation of the Baby Ruth brand, ensuring that the candy maker got strong visibility in the videos. The winner got to perform during the 7th inning of the game. (I didn't see this part of the game, so I don't know if it happened. Note a peeve is that MLB/Baby Ruth should be offering video of the winner singing at Yankee Stadium, which would be an instant classic, but doesn't seem to be.)
Still, I'm a big fan of UGV contests like this especially when the brand, contest and tie-in event all harmonize, as was the case with this Baby Ruth contest. Though these contests require significant upfront coordination, the payoff is that they are a unique branding opportunity that can inexpensively break through today's ad clutter. Not to mention these contests are a real crowd-pleaser, playing on the same voyeuristic viewer impulses that programs like American Idol have tapped into brilliantly.
I've said repeatedly that the abundant volume of UGV available at YouTube and elsewhere provides evidence that there's a ton of amateur talent out there. Brands and others that figure out how to leverage it can generate excitement and deepen customer engagement. In addition - and with a little luck - these videos can also turn into viral sensations, driving a near infinite ROI for the underlying brand.
Other recent examples that combine UGV with high profile events include Dove's "Supreme Cream Oil Body Wash Ad Contest" (in conjunction with the Academy Awards) and MySpace/NBC's "Decision '08 Convention Contest" (in conjunction with this summer's political conventions). I expect more to come. If you see examples, please let me know!
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