Wednesday, August 5, 2009, 9:31 AM ET|
If you thought the recession and resulting ad spending crunch had dimmed the enthusiasm around independently-produced, made-for broadband video, think again. The market seems to keep chugging along with all kinds of companies and creative talent involved. Here's a sample of the headlines I've noticed in just the last couple of months (some links now require registration):
The list of projects demonstrates both the breadth of participants and concepts coming to market. Some involve established backers like Microsoft or AOL. Others rely on starpower like Lisa Kudrow, Candace Bushnell or Jason Priestly. Some have ties to existing offline franchises like Alloy's "Private" or Meredith's "More" magazine, while others, like DiVide and Generate are in search of brand involvement. Clearly there's no shortage of experimentation in the made-for-broadband space.
Still, discipline is the key to success. That was my takeaway from a conversation I had yesterday with Michael Wayne, co-founder and CEO of DECA, an online-only entertainment company whose properties include Smosh, Momversation, Good Bite and others. Michael notes DECA's success stems from being very analytical about which projects to greenlight. Key success criteria include how large the targeted audience is, how engaged they are (measured by things like blogging, Twittering, commenting), whether other media properties have succeeded with the audience and if there's demonstrated advertiser interest.
Importantly, DECA looks hard for pre-existing online communities or "tribes" along with "tribal leaders" as Michael puts it - people who have emerged from the online rabble to become recognized leading voices in their vertical space. DECA tries to partner with these tribal leaders to build properties that have video at their core, but capitalize on all the publishing and interactive capabilities the web has to offer. Michael notes the need for all of this to be done on very lean, non-Hollywood budgets.
Meanwhile, I've been a believer that the coming convergence era, where broadband is increasingly connected to users' TVs, will further level the playing field for made-for-broadband projects. At some point it could be as easy to watch one of the above offerings as it is to watch "Heroes" or "Lost." Lastly, recent infrastructure and distribution progress, epitomized by last week's news from YouTube and blip.tv, provide further support for these independent producers.
So while the flameouts this year of 60Frames, ManiaTV, Ripe Digital and Blowtorch are reminders that the made-for-broadband space remains plenty precarious, it also continues to be fascinating to watch evolve.
What do you think? Post a comment now.
Categories: Indie Video
Friday, October 31, 2008, 8:34 AM ET|
On Monday I wrote that a key mission of mine while attending the Digital Hollywood Fall conference in LA this week was to dig into what impact the economic crises is having on the broadband video industry. Specifically I was focused on three things: financing, staffing and customer spending effects.
I wasn't terribly surprised by what I heard; people are quite nervous. Most significantly they're nervous about financing. Many I spoke to cited the recent Sequoia Ventures presentation which offers a very harsh assessment of the landscape for financings and startups. I heard a lot of lukewarm responses like "we'll have to see what happens" from folks when asked about their ability to pursue future financings.
That said, some deals are still being done. One in particular is a new venture debt deal announced this morning by Clearleap. I caught up with their CEO Braxton Jarratt at DH, and one of my takeaways from that meeting was that venture investing may well be returning to its roots favoring technology-oriented companies that address well-understood industry pain points.
This shift would not bode well for content-oriented startups where investors are bet more on the startup's ability to create enterprise value from audience generation and ad revenue. Evidence of belt-tightening in the content world abounds, with the latest news of layoffs coming from 60Frames. All signs from DH suggest this is going to be one of the hardest hit sectors, as business models remain nascent and ROIs uncertain (one executive told me that every content startup has already eliminated at least 10-20% of their headcount, even if you haven't read about it publicly). While there's no shortage of interest in broadband content creation, the question is whether the dollars will be there to fund these ventures.
Closely tied to content's success is the video management/publishing platform space. I had a numerous conversations with folks about the large number of competitors and concern that both customer spending slowdowns and limited financing are going to force a shakeout. These companies are being advised to watch their cash carefully.
Lastly, there was lots of discussion, especially on panels, around ad spending in this climate. Optimists felt that the fundamentals of consumer behavior embracing broadband consumption would force advertisers to continue their spending in broadband. Conversely many pessimists said that friction, lack of clear ROIs, a flight to safety (i.e. a bias toward TV advertising) and the general slowdown would all conspire against broadband ad spending. It's hard to ignore the pessimists' arguments here; my hope is that any pullback is relatively shallow.
One thing that's certain: broadband is not exempt from the consequences of the financial meltdown. All businesses are assessing what they need to do to survive and succeed. Another major wrinkle has been introduced in the broadband video industry's evolution.
What do you think? Post a comment now.
(A postscript: thanks to the many of you who volunteered feedback on VideoNuze at the show. I really appreciate your comments and encourage all readers to let me know their thoughts. What can VideoNuze do differently or better to provide you more value?)
Thursday, October 16, 2008, 7:46 AM ET|
In the two years since Google acquired YouTube, I've often wondered about two things: (1) was there really a strategic rationale behind the deal? and, (2) if there was indeed a strategic rationale, when might we see it borne out in actual business initiatives?
For sure YouTube's organic growth has continued unabated during these two years and from a traffic perspective, it is more dominant now than ever. Yet the dearth of initiatives that are tangibly strategic (or meaningfully revenue-producing for that matter) to Google, or that even minimally strengthen either company's underlying value proposition, has led me to conclude that the deal had more to do with the Google guys wanting to acquire YouTube for its "coolness" factor - simply because they could - than anything else.
I don't mean to sound unfair to the YouTubers who work diligently to make YouTube an incredible experience, which of course it truly is. Yet it is hard to deny the obvious: exactly what has YouTube done differently during the last two years that it couldn't have done had it remained independent (and saying "afforded its monthly CDN bills" doesn't count!), and how exactly have either YouTube or Google benefited from being together during this time?
However, I think things are finally changing. In fact, with little fanfare or proactive PR, Google at last seems to be strategically flexing YouTube's muscles. While some of what they're doing is experimental, other moves have significant market potential and could be highly disruptive to other broadband oriented media and technology companies.
At the top of my "highest potential" list is Google Content Network, especially as it's envisioned as "spokes" tied to YouTube's "hub." I wrote at length about GCN a month ago in "Google Content Network Has Lots of Potential, Implications" so I won't rehash my arguments here. But note yesterday's news about "Poptub" as the second video series to get the GCN/YouTube treatment; I expect a steady drumbeat of these types of deals in the months to come. GCN has the potential to become a key driver of the Syndicated Video Economy.
Another high-potential activity is YouTube's plan to start streaming full episodes. The first deal with CBS is no doubt a signal of many more to come. Full episode streaming is strategic on a number of levels. It enhances YouTube's and Google's access to big brands' ad dollars. While Google has thrived in the self-service, "long tail of advertising" world, it needs more cred among big brands, especially as it pursues its Google TV initiative (see latest deal with NBCU) and other eventual broadband-to-the-TV activities. Full episodes are also a winner from a user standpoint: a unified video experience across premium, indie, long tail and UGC video is very compelling and also squeezes competitors with narrower offerings.
Yet another high-potential activity is the implementation of search ads on YouTube. When the deal was originally done, my first reaction was to think it was a no-brainer to simply start displaying ads against every YouTube search (example - you search for "West Wing" in YouTube and the results page shows an ad to buy the DVD set). If there's one thing Google knows cold, it's the search ad business. YouTube searches represent billions of incremental opportunities each year to extend its core franchise.
Lastly - and this is admittedly more of a "Will Richmond thing" than anything Google or YouTube are yet pursuing: I think it's practically inevitable that the company will start investing in independent broadband video companies at some point. I touched on this in yesterday's piece about NBCU-60Frames and MSN-Stage 9. As time marches on and some of the above activities bear fruit, it's going to become very tempting for Google/YouTube to lever its strengths more directly into content ownership. I know what Google's always maintained about being a technology company, committed to neutrality in way that even Switzerland would appreciate. But as Google's ad business matures and it inevitably is pressured for growth, content is going to be a very alluring opportunity.
Regardless of what happens on this last point, YouTube now seems to have a full plate of strategic activities underway. It's great to finally see this happening.
What do you think? Post a comment now.
Wednesday, October 15, 2008, 9:33 AM ET|
I always hesitate to conclude too much from just a couple data points, but two deals in the last week - between NBCU and 60Frames and between Microsoft/MSN Video and Disney/Stage 9 - feel to me like leading indicators of more deals of this kind to come.
In case you missed the news, last Tuesday, NBCU and 60Frames, an independent broadband-only studio I've written about, announced a comprehensive content development and ad sales deal. Critically, NBCU will take original broadband-only shows from 60Frames to brands/agencies with which it has relationships to pursue both upfront sponsorships and possible brand integration.
Then this past Monday, Disney and Microsoft announced at MIPCOM that Stage 9, Disney's in-house broadband-only studio which I've also written about, would begin syndicating its shows to MSN Video for European viewers. While smaller in scope, the Disney-MS deal is no less noteworthy.
I see at least three underlying threads to these deals that suggest broader market implications. First, the deals are further evidence that the broadband-only video model is still nascent and in need of market validation and financial support. If these deals are in fact harbingers, this support will come from established players like NBCU and Microsoft who have significant reach and access to ad dollars. Somewhat ironically these are also companies that have financial stakes (either through direct ownership of or important customer/strategic relationships with) the very incumbent media properties that the broadband-only crowd is trying to grab eyeballs away from.
Second, the down economy is a catalyst for more of these types of deals. Last week, in "5 Conclusions About the Bad Economy's Effect on Broadband Video," I asserted that the broadband-only studios would tighten their belts a bit to conserve resources in this uncertain climate. One way to mitigate their financial risk and uncertainty is through these linkups with deep pocketed partners. NBCU's backing of the 60Frames slate appears to be the most extensive of these types of deals to date. That Stage 9 - owned by well-funded Disney - is also hunting down big distribution partners which have brand relationships is still further evidence that risk mitigation is a key priority.
Third, the deals point to an acceleration of the trend toward broadband video syndication. In a presentation I give periodically to industry executives, I have a slide titled "Syndicated Video Economy Accelerates" which lists the reasons as: (1) Ongoing video explosion causes heightened need to break through to audiences, (2) Device proliferation causes even more audience fragmentation, (3) Ad model firms up, improving ROI for free, widely distributed video and (4) Social media use means surging user-driven syndication. That slide needs to be updated for a new #1 reason motivating syndication: "In a down economy, syndication could mean the difference between success and failure for broadband-only studios and even big media backed broadband initiatives."
Here's something else to consider: what role might YouTube, the market's undisputed 800 pound gorilla, play as an emerging distributor and financial backer of broadband-only video? Despite its much-avowed disinterest in being a content provider, YouTube, with Google's abundant balance sheet, is in a Warren Buffet-like position to become the go-to resource for financial backing and key distribution. (Readers who are cable industry veterans will also see a potential parallel to the M.O. of TCI back in the 1980's and 90's.) Couple Google's billions with YouTube's massive reach, desire to move up the quality ladder from its UGC roots, pursuit of new ad models and commerce models and its budding GCN initiative, and the company really is superbly positioned to play a role in the development of broadband-only programming.
Anyway, I digress. For now, it's fair to say that these two deals do not yet make a trend. But still, I think it's extremely likely that we'll see many more of these kinds of linkups in the months to come. We're living in a hunker down time, when starry-eyed creatives enticed by broadband's no-rules freedom will be tempered by business executives' no-nonsense pursuit of financial viability.
What do you think? Post a comment now.
(Btw, for a deeper dive into how broadband-only studios ride out the economic storm, join me for the Broadband Video Leadership Breakfast Panel in Boston on Nov 10th. One of our panelists will be Fred Seibert, creative director and co-founder of Next New Networks, arguably the granddaddy of the broadband-only crowd, having raised over $23 million to date. Early bird pricing ends on Friday.)
Thursday, June 26, 2008, 9:35 AM ET|
The broadband content provider Crackle is notching a win with its new comedy/interview series "The Jace Hall Show." I received a press release that it generated 500K visitors in the first two days following its launch on June 5th and a million to date. I'm always intrigued with what kinds of original broadband programs are working - and why - so I grabbed some time yesterday with Mary Ray, Crackle's VP of Marketing to learn what's behind Jace's success.
For those of you like me who are not gamers, Jason "Jace" Hall is probably unfamiliar. But Mary explained that if you're in the gaming community he's a fairly well-know producer who has a wide network of relationships in the industry. His show brings you into the world of his relationships, making you feel more connected to gamers' movers and shakers. And since he has his finger on the pulse of what the young male gamer audience is looking for, that gives him a real edge. Plus Mary believes that Hollywood still hasn't paid much attention to this market, despite gaming's huge following.
In the program's first episode Jace provided a sneak peek at a Duke Nukem Forever game that has reputedly been in development for 12 years. Gaining this type of access is practically like having exclusive content. Mary said that Crackle didn't do any advance paid marketing for the show; rather the audience was driven purely by word-of-mouth and buzz-building. I joked with Mary - spend no money but gain a big audience - the show sounds like a marketer's dream!
I asked Mary what she thinks the most important takeaway from Jace's early success is. Her feeling was that tapping into what the audience is hungry for is the key. While I agree, I'd go a step further. I think that trying to find talent that already has a following - whether in gaming, TV or some other medium - is a genuine way to improve a program's odds of success. I'm not necessarily talking about A-list talent per se, but rather talent that is at least known within some kind of niche (e.g. finance, comedy, woodworking, etc). That's not say "don't go with unknown talent looking to break out," but I do think it's important to recognize that doing so carries more risk.
The whole area of original broadband content is surging with players like Crackle, Next New Networks, 60Frames, ManiaTV, Break, Heavy, MyDamnChannel, FunnyorDie and lots of others pioneering the model. It's going to be very interesting to learn more about what works and why.
What do you think works in original broadband video? Share your comments now!
Monday, March 31, 2008, 9:11 AM ET|
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!
Tuesday, March 18, 2008, 10:17 AM ET|
Last week I had a chance to sit down with Brent Weinstein, CEO/founder of 60Frames, which is among a new group of companies I refer to as "broadband studios." This is a category that has generated a healthy amount of funding and activity recently, including, among others, Next New Networks ($23 million to date), Generate ($6 million), Revision3 ($9 million), Stage 9 (Disney/ABC's in-house unit), Vuguru (Michael Eisner's shop) and a slew of comedy-focused initiatives. 60Frames itself has raised $3.5 million from Tudor, Pilot Group and others.
The impetus for 60Frames came when Brent was heading up digital entertainment at UTA and observed that many clients wanted to create digital/broadband fare but wanted a partner for the same roles they've come to expect studios to handle (e.g. financing, distribution, legal, creative, etc.). 60Frames aims to differentiate itself from the pack by being "artist-friendly" - allowing greater creative control and more significant ownership and by relying on strong relationships. With an existing staff of 11 and a goal of launching 50 programs by year end, the 60Frames team is no doubt going full tilt.
60Frames is following a traditional portfolio approach, working with great talent (Coen brothers, John August, Tom Fontana, others) but recognizing that results in this new medium will vary - there will be some winners and some losers. The goal is obviously to have the best ratio possible. Traditional studios improve their odds by using collective history and data about what types of projects succeed and which ones don't. But no such lengthy track record or data exists in broadband just yet, so it's a lot more speculative pursuit.
I asked Brent if there's any creative formula 60Frames is using to guide its decision-making. He was pretty emphatic that there's no "formula," but did concede 60Frames is focused on short-form (under 5 minutes), is biased toward comedy where episodes can stand alone more readily, and is mainly looking at niche audiences with a bulls-eye of 18-34 men, where consumption is highest.
Nurturing relationships and developing great content is only part of the equation for these budding studios' success. Distribution and monetization are also incredibly important, as broadband necessitates an entirely different model. Regarding distribution, I was encouraged to see 60Frames is solidly in the syndication camp to the point that it has not even set up destination sites for its 7 launched programs yet. 60Frames has a network of partners including Bebo, blip.tv, DailyMotion, iTunes, MySpace, YouTube and others. Gaining access to all the popular online destinations will accelerate success. Meanwhile advertising is being handled by partner SpotRunner, which has deep hooks in the space.
Broadband studios like 60Frames harken back to the original studio moguls in some ways - taking creative and financial risk to explore what works in a new medium. It's way too early to know if or to what extent they'll succeed, but if they do we can expect a gold rush of imitators.
Posts for '60Frames'