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VideoNuze Report Podcast #119 - YouTube's Original Channels
Fri, 02/03/2012 - 08:05I'm pleased to be joined once again by Colin Dixon, senior partner at The Diffusion Group, for the 119th edition of the VideoNuze Report podcast, for Feb. 3, 2012. In this week's podcast we discuss YouTube's original channels strategy.
As I wrote earlier this week, I think YouTube's approach is quite compelling, and although it's still very early, the disruptive potential is high. In a sense I see YouTube as trying to "out-cable cable," by introducing niche and micro-niche programming that leverage its low-cost, interactive distribution platform reaching a global audience of 800 million viewers each month. It's awfully tempting for incumbent broadcasters and cable networks to dismiss the efforts as lower quality and therefore not competitive, but history shows things that start modestly often have a way of improving dramatically (take ESPN's evolution as one great example).
Colin zeroes in on YouTube's interactive attributes and the favorable economics of online video delivery as being a key differentiators from today's TV landscape. As one who worked on so called interactive TV (or "ITV") efforts in its early days, Colin has a great perspective on this. He thinks YouTube's programming can be distinctive because, by definition, it can capitalize on its inherent connected Internet platform. That, combined with YouTube's native engaged user base, gives YouTube a whole new opportunity to change viewing experiences. Colin highlights a recent TDG survey of iPad users that revealed YouTube as the most used app (by 64% of users), which surpassed even iTunes (53% of users).
Note, this week YouTube head Salar Kamangar did a great on-stage interview with Peter Kafka at the D: Dive Into Media conference where he articulated YouTube's strategy. And for another perspective on YouTube's strength, see this fascinating article about RayWJ, a YouTube-only comedian who's reportedly pulling in $1 million a year from his channel.
Click here to listen to the podcast (21 minutes, 14 seconds)
Click here for previous podcasts
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Categories: Video News
Video Syndicators Are Finding Success in Sports Category
Thu, 02/02/2012 - 08:33The power of the video syndication model is on full display in the online sports category, where 2 of the top 3 properties in December, 2011 were little known, early stage video syndicators, rather than well-known media brands and sports leagues. As the chart below shows, the #2 slot belonged to CineSport, a company I wrote about 6 months ago, with 15.7 million unique viewers while the #3 position went to Perform Sports, a year-old entrant, with 14.6 million unique viewers. Both trailed ESPN with 24.7 million unique viewers, but were still well ahead of stalwarts like CBS, Turner and Fox. Earlier this week I spoke to Juan Delgado, Managing Director of Perform Americas to learn more about its syndication formula.
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As background, Perform is a public company in the U.K. which operates numerous sports-related sites of its own and for partners, and distributes video to multiple parties, including online bookmakers and traders. In 2010 Perform launched its "ePlayer" division, which licenses sports highlights from rights-holders and offers an embeddable video player to distribution partners. Perform sells all the ads and shares revenue with the distributors, which currently number over 1,000 globally. In the U.S. the group includes web sites of mainly local media properties like NY Post, NY Daily News, Boston Herald, Chicago Tribune and San Francisco Chronicle (SFGate.com). Yesterday Perform also announced the LA Times and Sporting News on AOL as new distribution partners.
On these sites, in selected sports pages, you'll see Perform's ePlayer embedded, offering multiple sports highlights. A key deal for Perform is the exclusive rights for Major League Baseball highlights for distribution to local media properties. In addition, it offers highlights from NBA, NHL, NASCAR, UFC, along with professional soccer and golf, and men's basketball from the SEC, Big Ten, Big 12 and ACC. Perform curates these highlights into playlists and distributes them via the ePlayer to its local distribution partners. Unlike CineSport, which also produces its own original content featuring local sports journalists, Perform focuses solely on highlights, which Juan believes are the highest value to both viewers and advertisers.
Aside from their differences in content strategy, both Perform and CineSport are succeeding with the same core ad-supported syndication model. They are each part of the "syndicated video economy" I've been writing about since 2008, demonstrating that in the online video era it's very important to distribute content to where audiences already are, as opposed to focusing exclusively on driving eyeballs to a specific destination. In the case of ESPN, for example, which has the most powerful brand in the sports industry, the destination model works. But for practically all others, and particularly for the numerous properties that are resource-constrained, syndication provides great content, at low cost and with revenue upside. It also unlocks additional online revenue for sports rights-holders.
Both Perform and CineSport recognize these dynamics, and as online video viewership continues growing and the ad-supported model matures, I expect each will see ongoing success.
Categories: Video News
Wall Street Journal's YouTube Channel Launches With "Off Duty" Video Series
Wed, 02/01/2012 - 08:34The Wall Street Journal has launched its WSJ Live YouTube channel this morning, debuting "Off Duty" a companion video series to the popular lifestyle section in the newspaper's Weekend Journal. The WSJ Live channel is the latest addition to YouTube's 100 original channels strategy. In addition to Off Duty, the WSJ Live channel features NewsHub, Digits and Mean Street, three other on-demand/live video series that are found on the main WSJ.com site and more recently the WSJ Live iPad app.
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Off Duty will originally broadcast for 30 minutes 5 nights a week at 6pm with host Wendy Bounds, but will then be split up into 5-6 on-demand segments available online. As expected with a lifestyle format, content categories include entertainment, autos, food & wine, luxury, travel, sports and fashion among others, which are organized into specific playlists. As with its other video series, WSJ's journalists appear in Off Duty interviews and in feature packages, leveraging their subject matter expertise and adding dimension to their typical bylined articles. As one example, currently the channel opens with an interview between Paul Stanley, lead singer from the band KISS and Lee Hawkins, a WSJ reporter. 
The WSJ Live YouTube channel further strengthens WSJ's video strategy as it continues to expand well beyond its newspaper roots, helping establish WSJ Live as a new video-centric brand. As with the iPad app, the YouTube channel is free to viewers and is completely ad-supported. WSJ Live gives WSJ a credible entry in the living room via numerous connected devices. It underscores how broadband is enabling media companies outside the traditional TV ecosystem to compete with incumbents.
Coming on the heels of yesterday's launch of IGN's START gaming channel on YouTube, and others that have already debuted this year, the WSJ Live channel also reinforces the breadth of YouTube's niche programming strategy, and ability to attract top content partners.
Categories: Video News
Netflix Deal Puts Startup eyeIO's Encoding Platform in Spotlight
Wed, 02/01/2012 - 06:35Some start-ups go to great lengths for visibility before ever launching a product or landing a customer, whereas others stay completely below the 
radar until they have big concrete news to share. Squarely in the latter category is eyeIO (never mind the awkward name) an "ultra-low-bandwidth" encoding technology provider that has a bare bones web site, but does have a very high-profile first customer in Netflix. Yesterday, Rodolfo Vargas, eyeIO's CEO and co-founder and Charles Steinberg, another co-founder updated me, though they are still playing things pretty close to the vest.
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eyeIO has created a new, optimized process for compressing video for the H.264 standard that results in 20-50% bandwidth savings (depending on the particular network circumstances), while still delivering comparable or better video quality to existing devices without any new software. eyeIO can operate in a managed encoding center or in the cloud. If, like me, you're keen to know how eyeIO is doing this, you'll be disappointed, eyeIO is keeping its secret sauce under wraps.
However, as expected, Netflix did extensive lab and field testing before integrating eyeIO into its technology stack, and given Netflix's reputation for operational meticulousness, that's a pretty strong validation. eyeIO technology is now also being tested by Tektronix and THX to further document its capabilities.
Bandwidth is a key pain point for Netflix which is rapidly expanding internationally where pricing can be high and quality can be unpredictable. In addition, with Netflix's low prices, there is constant pressure to minimize expenses. Rodolfo said that Netflix has licensed eyeIO, but cannot say exactly where and how Netflix has implemented it. However, he believes that the savings eyeIO creates is a key enabler of Netflix's ability to pursue its international agenda.
In addition to the bandwidth savings, eyeIO also offers an adaptive bit rate streaming feature that allows video to start quickly with good quality and improve to HD. Rodolfo estimates that start time for a Netflix streaming video is close to 2-3 seconds with eyeIO, whereas typical start times are closer to 20-30 seconds.
eyeIO has five full-time employees plus a group of contractors. Ordinarily I'm a bit cautious when little information is available about new start-ups. However, the Netflix endorsement means a lot, as does the strength of the team (Rodolfo is formerly the senior program manager of video at Microsoft, while Charles is a former executive at Ampex and Sony, and a third co-founder, Robert Hagerty is a former chairman and CEO of Polycom). Rodolfo said they're engaged in discussions with all the various OTT and broadband content companies that would benefit from the cost savings eyeIO enables, and that more deals will be announced soon.
Categories: Video News
With Original Channels, YouTube is Building a Parallel Universe to Cable
Tue, 01/31/2012 - 09:22There are many exciting things happening in the online video industry, but to my mind, none is more noteworthy than the radical transformation of 
YouTube. YouTube is shedding its scruffy adolescence and seeking to redefine what entertainment means in the online video era. In fact, with each passing day, it becomes more evident that YouTube is building a parallel universe to the traditional world of cable TV, targeting niches that have long been mined by a multitude of specialty channels. This theme will crystallize as 2012 unfolds.
YouTube's 100 new channels of original online-only content have begun rolling out and will continue to do so throughout the year. For a relatively modest $100 million (by Google's standards!) YouTube is getting first dibs on programming that is laser-targeted at valuable niches. Importantly, it is helping galvanize a community of content creators who have either not been a part of the traditional pay and broadcast TV ecosystem, or are seeking a new, less constrained environment to play in, or both.
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The latest sign of YouTube's magnetic pull came yesterday as Electus (the multimedia studio headed by NBC's former entertainment honcho Ben Silverman and backed by IAC) announced that it had recruited Bruce Seidel to head its food channel on YouTube. Seidel, who most recently led programming for the Cooking Channel and was previously a senior programming executive at Food Network, where he developed the "Iron Chef" shows among others, obviously knows a thing or two about creating compelling food-related content. No doubt he'll quickly establish Electus's food channel as a popular draw while leveraging YouTube's many interactive possibilities.
Meanwhile today brings the launch of "START" the new gaming channel from IGN, which News Corp. acquired for $650 million in 2006. It will feature at least 5 long-form original programs, some of which will be produced by Reveille, another News Corp. property (coincidentally founded by Silverman) that is responsible for popular TV shows "Ugly Betty" and "The Office." START will compete for audience with cable's G4 among others.
On top of these are channels from celebrities like CSI's Anthony Zuiker, Stan Lee, Jay-Z, Deepak Chopra and action sports stars Tony Hawk, Shaun White and Kelly Slater among others. Then there are a host of new channels backed by hugely popular online content destinations like Machinima, TED, SB Nation, The Onion, WSJ, VICE, MyDamnChannel, Bleacher Report and others. Each one of them will compete for attention, to one extent or another, with various channels found on the cable dial.
Beyond the channels themselves, there are also interesting dynamics regarding how YouTube will play a role in launching new talent. For example, I was intrigued by a session I moderated at last week's NATPE Conference (where YouTube also had a huge presence) with David Sievers and Jeremy Welt, executives with Maker Studios. For those not familiar with Maker, it's an online-only studio that is now generating over 500 million views per month via YouTube, and is also part of the 100 channels effort with its Maker Music channel. Something that really struck me in our conversation is how they view YouTube as offering a totally new playbook for breaking new talent. YouTube's vast reach and engagement offer a vibrant platform for new artists to express their creativity and directly find their audience. The new channels represent a launch pad for them.
I was recently having a spirited debate over what impact new over-the-top alternatives will have on the pay-TV industry (e.g. cord-cutting, shaving, nevering, etc.) with a former colleague of mine from my cable days who has gone on to become one of the industry's top researchers. My position was that the wasteful cross-subsidies inherent in multichannel subscription bundling, coupled with spiraling rates, will create momentum for OTT options, eventually leading to fragmentation. The Internet has proven itself ruthless in rooting out analog era market inefficiencies and long-term, I believe the video business will be no different. He took the opposite view, insisting the firewall is that the majority of new, compelling content is not available on the Internet.
That comment struck me as reflecting the same type of thinking as that of broadcast TV executives from 30-35 years ago as they dismissed nascent cable TV networks then airing a hodgepodge of re-runs and lesser sports. The lesson: it's all too easy for incumbents to see the world only as it is, not as it could be. YouTube - and the many others who are pursuing original online programming - are still in their early days. But when combined with changes in viewer behavior, the proliferation of connected and mobile viewing devices and the firming up of online video monetization models, I'm betting that these efforts, particularly those led by YouTube, are going to be a highly disruptive force to the traditional TV ecosystem.
Categories: Video News
Study Shows How to Optimize Video Ads Across Multiple Screens
Mon, 01/30/2012 - 08:42It's no secret that video consumption is fragmenting to multiple screens. A key consequence of this trend is that it is creating headaches for advertisers and agencies seeking to optimize their spending across screens to achieve the best results possible. A new study by ad solutions provider Videology details the performance of ads on online video, mobile video and connected TVs as well as the relationship between cost, performance and scale of ads run across these screens. Performance is measured by click-through rates (CTR) and video completion rates (VCR).
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Videology used data from 378 campaigns run through its platform in the U.S., accounting for 184 million online video impressions, 2.1 million mobile video impressions and 360K connected TV impressions. No surprise, different screens perform differently. The study found that mobile video had a 350% improvement in CTR vs. online video. On the other hand, because most connected TVs don't allow clicking through on an ad, they are more akin to typical TV advertising. The flip-side of this is that connected TVs deliver 110% higher VCR than online video because viewers can't click away easily while mobile has 10% lower VCR, likely due to users' shorter attention spans.
As a result, Videology asserts that if an advertiser was primarily focused on CTR, then it should integrate mobile video; it would get a 350% CTR increase, though the average CPM only increases 30%. Conversely, if VCR is the key goal, then increasing connected TV spend makes sense; it delivers double the VCR of online video but only increases CPM by 54%.
Beyond the CTR and VCR metrics, the study also looked at 8 campaigns to understand brand recall, some of these only ran on online video while others ran across all screens. Here the multi-screen campaigns resulted in brand lift of 70%-300% while the online video campaigns gained 15%-130%. Multi-screen campaigns drove 9x higher average brand recall, though the cost per incremental brand lift decreased by 55%. The study concludes that to obtain the best mix of performance and scale, online video should always be 60-70%. But if an advertiser is mainly focused on CTR it should pass on connected TV for now. Or if an advertiser is focused on reach it should concentrate on online video, which has by far the highest deployment.
It's easy to understand intuitively that video ads will perform differently on different screens, but the Videology study helps put some parameters around what advertisers and agencies might expect. It's worth noting that this study follows separate research from last week showing how online video and TV campaigns complement one another. All of this is evidence that ad technology providers recognize how complex the media planner's job has become and as a result are trying to do their part in educating the market.
(Note: Videology is a VideoNuze sponsor)
Categories: Video News
