News Corp. announced this morning at Cannes Lions the availability of a new viewable vertical video ad for mobile devices that can be bought initially on The Sun and The New York Post. The ad is an outstream format against vertical video content, plays only when in view and can be scrolled past. The ad appears with audio off, which viewers can toggle on. Viewability is measured by Moat per MRC standards.
At the recent Video Ad Summit, I sat down with Rahul Chopra, News Corp's SVP/global head of video and Chief Revenue Officer of Storyful, which was recently acquired. Rahul has been a key executive behind the Wall Street Journal's highly successful online video strategy and implementation.
As Rahul explains, the Journal is now producing 150 hours of video per month, delivering 50 million streams across 35 different platforms. Content is created from every one of its international bureaus, which is released and promoted on a 24-hour cycle to match audience interests.
From an ad sales perspective, Rahul details how video is now part of a holistic go-to-market approach which advertisers are responding to. Inventory has been sold out for a long time and CPM are still rising and are very strong (Rahul would only share the numbers with me privately, but they are eye-popping).
Free, short-form mobile video news is becoming a hot area of focus for established media companies. The latest evidence is this morning's announcement by NBCUniversal News Group of a minority investment in NowThis News as part of a broader content development collaboration involving all of NBC's news brands.
The investment follows the December acquisition of leading short-form mobile video news creator Newsy by E.W. Scripps for $35 million. That deal followed the launch by the New York Times, in late November, of the "New York Times Minute," a 3 times per day 1 minute video compilation of 3 top news stories of the moment which itself came on top of many other new video offerings from the Times. Meanwhile, in late December News Corp. acquired Storyful for $25 million to accelerate the use of short user-generated video in its and others' reporting.
And all of these follow numerous clip-oriented video news initiatives by a wide range of established and earlier-stage news organizations across both general and vertical subject areas (e.g. sports, entertainment, travel, etc.).
Interviewed by the NY Times' Amy Chozick at last week's VideoNuze Online Video Advertising Summit, News Corp.'s Chief Digital Officer Jon Miller summed up his view of the future of TV by saying that "TV is an app." Jon believes that watching programs will become "screen agnostic" with consumers expecting consistency in experience and choices.
That said, Jon doesn't anticipate a proliferation of successful TV apps at the scale of what we've seen in the tablet/smartphone world; rather he envisions a hierarchy of just a few aggregators (e.g. Hulu, Netflix, HBO, etc.) leading the way. He also doesn't envision an a la carte future any time soon. Although consumers say they value lots of choices, Jon points to examples where this actually leads to consumer fatigue.
Following are 4 news items worth noting from the week of Sept. 7th:
1. Hulu's boss says it needs to charge for content - Bloomberg ran a story this week quoting Chase Carey, deputy chairman of News Corp (Fox's owner, and therefore a part-owner of Hulu) as saying at a BofA investor conference, "Ad-supported only is going to be a tough place in a fractured world....You want a mix of pay and free."
VideoNuze readers know that while I've admired Hulu's user experience from the start, I've long been critical of its thin ad model, which falls well short of generating revenue/program/viewer parity with traditional on-air program delivery. That lack of parity has caused Hulu's owners to cordon off access to Hulu on TVs for most viewers. But the networks' fear of cannibalizing their own P&Ls only frustrates loyal Hulu users, who neither understand nor care about such legacy concerns. All of this and more led me months ago to conclude a subscription offering is inevitable from Hulu. The impending TV Everywhere launches, which further marginalize ad-only business models, and now Carey's public remarks, solidify my thinking. We'll soon see some type of Hulu subscription tier.
2. Move Networks notches a win with Cable and Wireless deal - Score one for Move Networks, which this week announced Cable and its first tier 1 telco customer. Move enables C&W to deliver an HD, linear multichannel video service, plus on-demand and broadband content to its broadband customers, all through existing DSL connections. Move's repositioning, which I wrote about recently, obviates telcos' need to invest billions in upgrading their networks to get into the IPTV business. Indeed, Roxanne Austin, Move's CEO told me yesterday that C&W has for years considered all the various options for getting into video, but has never pulled the trigger until now. The deal covers up to 7 million homes and interestingly, rather than getting a license fee, Move will be paid a share of subscriber revenue. Roxanne says another big deal will be announced shortly.
3. iPod Nano gets video, battle with Cisco's Flip escalates - As you likely know, Steve Jobs unveiled the new iPod Nano this week, which incorporates an SD video camera. Following the iPhone 3GS adding video recording capability, I think it's pretty clear that Apple has decided video is the next big thing for its devices. As I suggested recently, Apple's embrace is going to drive user-generated video - and YouTube, as the undisputed home for it - to a whole new level.
But one wonders what this all means for Cisco's recently-acquired Flip video camera, and others from Creative, Sony, Kodak, etc? Cisco in particular has a lot on the line since it just shelled out almost $600M for Flip's parent Pure Digital. Granted Apple's devices are still SD, while Flip now emphasizes HD, but still, getting video recording "for free" as Jobs put it at the launch is pretty compelling for consumers. Even if the Flip deal doesn't work out as planned, Cisco will still be selling a whole lot more routers to handle all of this newly-generated broadband video, so it's a winner either way.
4. AT&T Wireless adding 3G capacity - In last Friday's "4 Items" post, I noted a great story the NY Times ran showcasing the frustrations that AT&T Wireless customers are experiencing due to the millions of data-intensive iPhones clogging up the network. AT&T has been hearing complaints from all sides, and this week announced 3G network upgrades in 6 cities this year, with plans to cover 25 of the top 30 U.S. cities by the end of next year, and 90% of its current 3G footprint by the end of 2011. These upgrades can't come soon enough for iPhone users. Meanwhile the company's YouTube video, featuring "Seth the blogger guy" explaining how AT&T is addressing network issues itself came under attack, as AdAge reported. There's no pleasing everyone.
Enjoy the weekend!
I'm now back from Digital Hollywood and I've had an opportunity to give Hulu 1.0 a spin as part of its private beta. I've also looked the Hulu offering at AOL which is not yet comparable (less content, fewer features) to the one at Hulu.com. So I think that for now using Hulu through the private beta is the only way to get the full 1.0 experience.
My initial reactions are positive and I give Hulu 1.0 a solid B+, with many of the fundamentals well done, but with certain features needing improvement, as to be expected from a beta launch. All in all, considering the short development window in which Hulu was created, the Hulu team deserves much credit.
Hulu 1.0 should more than silence those who snarkily pre-labeled it "Clown Co" and misunderstood it to be a "YouTube killer", which it is not. Hulu has not embarrassed its primary investors (and content providers) NBC and News Corp in any way, and in fact, has set the stage for taking back control of how its full-length content and clips are distributed online. This was of course the investors' main motivation - creating a legitimate platform for them to control their online destiny and capture the lion's share of the economics.
Once clicking into a clip or full length video, the video player experience was excellent. Not only is the player consistent for all videos, but the quality was as well. I never experienced any delays, re-buffering, pixelation, audio/video out of synch or other typical video issues. In full screen mode there was a little degradation, but was certainly above the acceptable-quality bar.
The biggest knock on the content is its inconsistency. For example, click on "24" and you can choose from 3 episodes from Season 1 and one from Season 6. Battlestar Galactica gives all of Season 1, but nothing else. Same for a classic like The Mary Tyler Moore Show. Huh? All of this makes it confusing for the user to know what to expect. If all this is due to rights or other limitations, it would be good for Hulu to signal or explain this somehow.
Of course, the bigger question is whether this limited amount of advertising is sufficient to make Hulu's economic model work, especially if sometime down the road, online consumption cannibalizes on-air consumption.
Yet for now the create a clip capability is buried in the "Share" feature, which seemingly only allows the custom clip to be emailed. And pinning down your desired start and stop points is very tough. Since custom clips are the only UGC-like opportunity in Hulu, these should be given more prominence. Ideas could include showcasing a users' gallery of favorites, allowing them to be saved to playlists, syndicating them to partners' sites and allowing them to be mashed up.
UPDATE: Reed Price, MSN Entertainment's Editor-in-Chief emailed me to remind me that MSN (an initial Hulu distribution partner) has already rolled out a relatively extensive integration of Hulu video. He provided a number of links including these 4: