Today I'm pleased to introduce "VideoNuze Forums," a periodic opportunity for online video industry experts to contribute their thoughts and ideas to the VideoNuze community. I'm a firm believer that only through the industry's collective ideas and energy will online video reach its ultimate potential.
In this kickoff post, David Graves shares his thoughts on how advertisers can collaborate with online video producers to fund original online entertainment, while leveraging the syndication model. David is a veteran media executive who I've known for years; he's served in executive roles at Yahoo and Reuters, and more recently founded PermissionTV. He's now consulting with Global Capital Strategic Group.
Please contact me if you're interested in contributing. I can't guarantee I'll run everything, but I welcome your ideas.
A New Old Model for Making Money with Original Online Entertainment Video
by David Graves
In the very beginning of television, advertising agencies worked directly with creative people to produce the dramatic programs they wanted to put their ads in. Now, 60 years later, it's time for them to do so again, on the Web.
Between then and now, distributors such as TV networks have become the ones who financed and controlled video programming and acted as the middleman between creatives and advertisers. But today there aren't enough distributors with both the will and the resources to speculatively fund large volumes of online entertainment video.
There are many creative people who would like to produce for the new online medium, particularly now that it can be done for historically low costs. But it's hard to make money. Even so, some dramatic video like Strike.TV is getting produced on the hopes that it will attract an audience that might get sold to advertisers. This is nice but inefficient and usually unprofitable.
In order for the Internet to develop as a substantial platform for original entertainment video, a new model has to form that gives producers some additional upfront confidence. There needs to be a better chance of generating a profit in order to encourage Internet producers to produce and people with money to fund them. Since the paid model is still highly challenged, even for well-known, branded fare (e.g. broadcast network programs), advertising is the most likely source of revenue.
Advertisers are clearly open to the potential benefits of online video advertising. To begin with, they love TV commercials over every other form of advertising. Online, their ads can't be skipped, can be better targeted and offer the possibility of an immediate response or interaction on top of the branding value. What's not to like?
But experiments with advertiser-created programming have by and large been disappointing. That's because it doesn't make sense for advertisers to be the ones financing, creating or distributing video. It's not what they do. On the other hand, partnerships like that of Alloy Entertainment and Johnson & Johnson, to create the "Private" Web series for teen girls, which debuts next month, exemplifies the potential. Brands like Neutrogena will be subtly integrated into the shows.
The model that will work is one where advertisers hook up directly with creative programmers to help encourage show ideas they like. Some call this "branded entertainment" and it can take many forms. For example, it could be an advertising commitment at an agreed-upon CPM, contingent on seeing the finished product. Or a pre-buy that helps fund the production in return for a lower CPM. Even a smile and a wink would have value.
If a producer had an embedded advertiser at a decent CPM, they could arrange for distribution both on their own sites and through syndication. Given the state of ad sales today, offering syndicated sites free, high-quality video content with a built-in CPM split would be like offering the proverbial candy to a baby. Further, there will be syndicators like Pixsy and others who would no doubt be happy to take on the job of arranging distribution for a slice of the CPM.
This model is very similar to the way TV stations have been getting their first run syndicated content (like Oprah and Wheel of Fortune) for years. The programs come with a certain number of embedded commercials along with slots that the stations can sell themselves. It's called "syndicated barter." There are many advertisers who have used this method to ensure that their ads run in the right editorial environment. What they end up paying is the aggregate rating that the individual stations generate.
For original online video entertainment to flourish it seems inevitable that producers and advertisers will need closer partnerships to address the vacuum created by the lack of distribution funding.
What do you think? Post a comment now.
Pixsy, a white label video search provider made an interesting announcement yesterday about the launch of its new "Premium Feed" service, which I think is another example of the Syndicated Video Economy that I've been talking about for a while now. I talked to Pixsy CEO Chase Norlin about Premium Feed to learn more.
For those of you not familiar with Pixsy, it has been quietly building one of the largest video indexes since its founding in 2005. To date it has mainly focused on licensing the index to partner sites which wanted to offer easy video discovery to their users. As more content providers have offered embedding, Pixsy also enabled found videos to be played right on its partners' sites. Even though activity has grown well, Chase is pretty candid about monetization to date being difficult.
Premium Feed takes embedding to the next level by creating a subset of Pixsy's video index that is both higher-than-average quality and has accompanying pre-roll and overlay ads. Then Pixsy is developing an economic relationship between the content provider and its publisher network by signing redistribution and revenue-sharing deals with both. Chase says that to date the publisher network has 45 million unique visitors/mo and that 1-2 million videos are in the Premium Feed.
One of those publishers is EgoTV, and I chatted with founder/president Jimmy Hutcheson to find out how they're implementing Premium Feed. If you look in the lower right corner of their home page you'll see 3 new "channels," Ego Cars, Ego Comedy and Ego Travel. Each of these are constructed solely of Pixsy Premium Feed videos that are curated by an EgoTV editor. In another example at Ego People, the 300x250 ad in the right column is now populated with the Premium Feed. This is a simple "highest-and-best-use" real estate decision: Jimmy explained that Premium Feed is yielding 2-4x as much net revenue for EgoTV as it would receive if it sold rich media ads in this position.
The concept of bundling content with ads (or vice versa?) and distributing them to sites seeking video and extra monetization is of course at the heart of the syndicated video economy. Much of what Pixsy is doing with Premium Feed is conceptually familiar to Google Content Network, Adconion TV, Voxant (now Grab Networks), Syndicaster, Jambo, Magnify.net, 1Cast and others.
Yet each of these initiatives has its own somewhat differentiated value proposition and underlying technology approach. As syndication grows in importance, sites with strong traffic and an interest in incorporating video will have many choices. As to how they'll decide, Chase makes a good point: simplicity and one-stop shopping are always valued by resource-constrained sites. Providers that can address as many of these sites' potential needs will be in a strong position.
What do you think? Post a comment now.
As the proliferation of broadband video continues apace, the task of finding what you're looking for is only intensifying. That's set off a scramble by many to solve this problem, trying to become in effect, the "Google of video search."
I've previously written about players such as blinkx, Truveo, ClipBlast, Veveo and EveryZing. The latest video search company to hit my radar is Pixsy, which has its own distinctive approach for capturing its share of the growing video search market. I recently spoke with Chase Norlin, Pixsy's CEO to learn more.
Pixsy has three key differentiators:
First, it's purely focused on the B2B white-label opportunity, eschewing the destination site route. Pixsy only wants to power other sites' search capabilities as a white-label provider.
Second, in addition to video search, Pixsy also does image search, which Chase believes is actually the fastest growing part of the search market. Being able to offer image search broadens Pixsy's value proposition to partners, driving enhanced monetization opportunities.
Third, Pixsy doesn't seek to have the broadest index, rather it seeks to balance the breadth of its index with having the most current results. It uses RSS feeds, not web crawlers, to build its index and focuses mainly on current events categories like news, sports and entertainment. Clearly having the most up-to-date results in these kinds of categories is a real plus.
Pixsy's approach seems to be paying off, as it is now powering video and/or image search at sites including Veoh, Lycos, PureVideo, National Lampoon and others. This morning it's also announcing a deal with MMORPRG.com, the web's largest massive multiplayer online role playing site.
Pixsy works with a number of business models. Sites generating anything under 10K search queries per month can freely use Pixsy's API. Above that volume, Pixsy licenses its index with about a third of partners selling their own ads, and the other two-thirds relying on Pixsy to sell the ads alongside the search results. As Google and others have shown, search results are extremely monetizable.
Based in Seattle and San Francisco, much of Pixsy's team comes from Microsoft and ValueClick. Considering it has been around for about 2 years, has only 15 employees and has raised just an angel round, Pixsy seems to show that the barriers to entry for savvy video search startups can be relatively low. With so many other video search players, I anticipate the category is going to remain fragmented and chaotic for some time to come.
Categories: Video Search
blinkx, which has been steadily expanding its portfolio beyond its core video search product, this week announced Advanced Media Platform or "AMP" (not to be confused with Adobe Media Player/AMP or Yahoo's Advertising Management Platform/AMP). I spoke with Suranga Chandratillake, blinkx's founder/CEO last week to learn more.
blinkx is addressing a problem that I hear about often - how can content providers which have increasingly large volumes of video on their sites make it more discoverable, helping drive usage and therefore ad revenues. Just this week on a panel at Digital Hollywood, Andy Forssell, Hulu's SVP, Content and Distribution, highlighted this problem, saying "we believe great content is significantly underwatched."
With AMP, blinkx has packaged up various offerings previously available web-wide into an enterprise product. These include its core video search/indexing technology, plus an SEO module and AdHoc, its contextual advertising platform for targeted monetization. blinkx is positioning AMP as a comprehensive approach that content providers can implement quickly on their sites. AMP is available in both licensing and ASP models. In the ASP model, AMP is available for a fee, or through ad revenue sharing. Suranga believes the ad sharing approach will likely end up being most popular.
blinkx announced 3 new AMP customers, Conde Nast's Portfolio.com, WallSt.net and Kiplinger.com. blinkx's AMP reminds me most of EveryZing, which I wrote about here. EveryZing's ezSearch and ezSEO take a similar approach to wringing value out of video assets. Pixsy is another company offering white label video search. Earlier this week it announced National Lampoon's network of sites as a new customer.
As content providers shift their focus from just getting their video online to actually monetizing and earning an ROI on it, discovery becomes critical. Therefore, I expect lots more activity in this space yet to come.
Categories: Video Search
Next week ClipBlast, a player in video search space, will announce that is has launched a beta of its 3.0 product. It's actually now live and I've had a chance to play around with it for the last couple of days. I also got a briefing and demo when I met up with Gary Baker, ClipBlast's CEO, at Digital Hollywood a few weeks ago.
Video search has been a murky, yet fast-evolving area. You have to get way down into the weeds to fully understand the nuances, but here is the gist. First, video isn't nearly as searchable as text is. Video search primarily relies on metadata, which describes what's inside the video itself. This metadata can be created by the content provider or by the video search engine itself using techniques like speech-to-text processing. A key challenge for video search engines has been returning results in which the context matches what the user was intending. This is no easy feat, as the same word can obviously be used in many different contexts, yielding lots of useless results.
ClipBlast's 3.0 beta is crawling 10,000 different video providers now and they've continued to make many enhancements to their metadata processing. They've also done a lot of work to improve user navigation so that browsing is a viable complement to search. (This gets to how users actually interact with video search engines, which is yet another issue in the video search world). ClipBlast now places all videos into 70 different categories, which have easy scrolling thumbnails, showcases featured clips and featured partners and today's most popular searches.
ClipBlast has also introduced more personalization features such as saving providers, categories, searches and results. You can also configure your own personal home page and set email alerts for when new video matching your search criteria. Perhaps most fun is a new widget feature, allowing ClipBlast widgets to be embedded on your desktop and blog with customized video. Gary demo'd this for me and it's quite cool. It's only available for Macs right now with a PC release coming soon.
I'm planning a deeper dive into video search in December and will have more detailed analysis on the category then. In the mean time I suggest the best way to get into it and evaluate which video search engine is best for you is to run the same search across some of the more popular video search engines. A good list would include: Truveo (now owned by AOL), Google (still officially in "beta"), blinkx, SearchForVideo, EveryZing, Dabble, Pixsy, Fooooo and others I'm sure I'm missing.
I'm interested in what you find, so please post a comment or email me.
Categories: Video Search