Online videos with advertisements attached are fast becoming an incremental moneymaker for media companies. The research firm eMarketer forecasts a 45 percent gain in online video spending in 2009. Despite the economic downturn, advertisers’ demand for video remains robust.
Media companies are rushing to repackage their videos for the Internet, and some say they can hardly keep up with advertisers demand for more, according to the New York Times.
One of the most notorious case is Discovery Communications company. He is digging across the 23-year-old video vault for animal attacks, dinosaur animations and scientific oddities –in total 1.3 million tapes of old episodes. Old shows that ordinarily would not be repeated on Discovery and its other 13 cable channels (TLC, Animal Planet, the Science Channel…) can be repackaged online, turning every week into “Shark Week”, three minutes at a time. Another repackage of old shows goes into short clips for the how-to Web site HowStuffWorks, a recent acquisition by Discovery.
Sometimes producer-editors blend several videos to create original series with new graphics and narration. Recent examples include “Jaws and Claws”, about the relationship between predator and prey, and “Strange Science,” about all sorts of bizarre phenomena. The Science Channel recently shortened the latter segments into 30-second vignettes.
Fact of the matter is that many of their TV episodes are timeless, and the clips can still be relevant to Internet users years after their original broadcast.
Producer-editors made about 4,500 videos for Discovery’s Web sites last year, helping the company record eight million video views in November.
Almost every video is shorter than five minutes. “Killer Clips,” a series of 30- to 40- second clips of animal takedowns, have proved especially popular on the Animal Planet Web site. Either is an hour or a minute long, it’s always about a story.
Some of the most popular videos, like the series “MythBusters”, are placed on sites like YouTube, with ads attached.
Trying to standardize streaming video advertising
A group of video-serving web sites and advertisers brought together by Publicis Groupe’s Starcom MediaVest are trying to standardize video ad unit. This group include Hulu, CBS Interactive, Yahoo, Microsoft, but not YouTube.
The group has narrowed some 30 video ad formats to 5.
There have been some other efforts on the video ad standardization front, like the IAB approving a group of formats (pre-rolls, mid-rolls, companion ads, and one that surround a video player… To view the guidelines, go to: www.iab.net/dv_guidelines)
However, experts feel that there’s more work to be done.
Adobe Flash 10 is spreading fast
Adobe said Flash 10, which was released last October, is already on more than 55 percent of PCs in “mature markets”. Adobe, the market leader, expects that adoption rate to increase to 80 percent by the second quarter of 2009.
Meanwhile, competitors like Move Networks and Microsoft’s Silverlight are doing well, particularly in the streaming of live events. Move Networks reports that he went from 25 million unique users in 2007 to 55 million in 2008.
Microsoft says that Silverlight 2 has been downloaded and installed on more than 100 million PCs since its launch in October 2008. The company claims that 25 percent of all consumers have access to a computer with Silverlight technology installed.
Pope Launches YouTube channel
The Vatican has launched its own YouTube channel. Its mission is to offer “news coverage of the main activities of the Holy Father Pope Benedict XVI and of relevant Vatican events.” Updated daily, the site offers translations in Italian, English, Spanish and German.
Along with the Pope’s channel, the Vatican has also H2Onews channel. This is a Catholic news service focused on the life of the Church and on social and cultural events that pertain to Catholics living in the World.
Time Magazine’s cover story this week, “How to save your newspaper”, refers to current newspapers operating on an outdated business model, and it suggests changing for content in micropayments –an idea that has been floating around for years. Many experts consider that asking people to pay for content on the Web is a ridiculous notion, and all experiments have failed so far.
“It is now possible to contemplate a time when some major cities will no longer have a newspaper and when magazines and network-news operations will employ no more than a handful of reporters”, Time says.
According to a Pew Research Center study, last year more people in the U.S. got their news online for free than paid for it by buying newspapers and magazines.
The solution of relying in advertising, one of the three newspapers revenue source –along with newsstand sales and subscriptions- seems to be not enough.
Time suggests another option: “getting paid by users for the services they provide and the journalism they produce.”
“The key to attracting online revenue is to come up with an iTunes-easy method of micropayment” (…) “Under a micropayment system, a newspaper might decide to charge a nickel for an article or a dime for that day's full edition or $2 for a month's worth of Web access. Some surfers would balk, but I suspect most would merrily click through if it were cheap and easy enough.” (…) “The system could be used for all forms of media: magazines and blogs, games and apps, TV newscasts and amateur videos, porn pictures and policy monographs, the reports of citizen journalists, recipes of great cooks and songs of garage bands.”
YouTube Shares Revenue From Downloaded Videos
YouTube is planning to allow some of its content partners to sell their videos, and charge for those downloads. Revenue is split with YouTube. Those videos are not protected by DRM technology and many have copyright licenses that allow redistribution and mashups.
Content owner set the fees for downloads, which user pay for using Google Checkout, the company’s PayPal competitor.
Google has experimented with video downloads before. Its Google Video service allowed people to buy or rent video. The program was killed for lack of demand.
MLB.com introduces a high-definition MBL.TV player
MLB.com, a company owned by all 30 Major League Baseball pro teams, will introduce this 2009 season a host of ways to get people to pay for their content on the Web.
Last year half a million baseball fans paid $120 to watch live video of pro baseball game. An additional 350,000 paid $15 to listen to radio broadcasts online.
MLB.com is introducing an enhanced MLB.TV video player with high-definition video. A new technology, developed by Swarmcast CDN company, will determine the speed of a fan’s Internet connection and adjust the quality of the video accordingly.
In addition, users will be able to stop and rewind to review stellar plays (pretty much like a TiVo). A feature called audio sync lets fans overlay their favorite radio broadcasters onto the television feed.
A MLB.TV subscription this year will cost $110 for the season, or $80 for a stripped-down version.
iPhone and BlackBerry users will be able to buy the At Bat application, $10, to listen to any game, anywhere they get cellphone coverage.
Online Video Services Boosts Old TV
YouTube (100 million viewers in the U.S.), Hulu.com (with 57 percent increase in viewership in the last six months of 2008) and other online video services are boosting old TV, because “people are showing a clear preference for a fully formed video experience that comes ready to play on a screen, requiring nothing but our passive attention”, notes the New York Times.
Live video streaming service Ustream.tv has launched a pay-as-you-go and self-serve platform for live, interactive video, called Watershed. It targets Web sites and businesses that seek a branded player and more customization for live events than what they can get by simply embedding an Ustream.tv player.
Watershed offers plug-and-play as well as API integration solutions. It comes with a lot of extra management capabilities like the ability to customize the player, add a logo, turn on features like chat, polling, picture-in-picture video chat, Twitter integration, analytics…
Watershed is a cloud computing service, with pricing on a pay-as-you-go basis. Pricing starts at $1 per viewer hour for 1,000 hours per month or less and scales down to $0.25 per viewer hour for streams that reach 50,000 viewer hours per month or more. (A viewer hour is one viewer watching a stream for one hour, or 60 viewers watching for one minute, etc.).
So a live stream (like a live stream meetings to employees) watched by only 30 people for a half hour would cost $15, but a stream watched by 30,000 people for a half hour would cost $7,500.
COMPETING SERVICES
Competing Mogulus Pro service is cheaper for anyone delivering more than 500 viewer hours per month. 30,000 viewers watching for 30 minutes would cost $3,490, but the quality/bitrate is worse.
Watershed allows broadcasters to choose-their-own-quality or bitrate up 2 Mbps. At 750 kbps and 50,000 viewer hours, Watershed is more economical. In fact, because he charges $0.80/GB at higher bitrates his cost balloons.
Techcrunch has a good write up with a comparison sheet on the pricing model, noting that cloud computing model could end up being very pricey for a lot of producers.
Making chips to make television fully Internet-enabled
An American company called Personal Web Systems says making browser chips for television is a good opportunity.
Intel Media Processor CE 3100’s chip allows full browsing. It has been adopted by only a handful of television manufacturers. Other companies of Internet-centric TV chips are Broadcom, Texas Instruments, ST Micro, Free-scale and NXP.
Samsung will sell TVs this spring that provide access to news, weather and finance channels provided by Yahoo. Sharp’s Aquos TVs already have widgets that provide traffic, weather and financial information, access to daily syndicated comic strips, and some Web-based sports and entertainment programming from NBC. Sony offers similar widgets on some of its TVs.
Other competitors are set-top box makers, deployed by cable companies.
Personal Web Systems will ship this quarter its first product, a $150 adapter that will attach to television to make them fully Internet-enabled.
Hulu stops allowing its programs to be shown through Boxee
Hulu will stop allowing its programs to be shown through Boxee, the free software package that combines multiple sources of Internet video content –like Hulu.com. As the Times says, “the dream of a free and easy way to watch Internet video on a television set just ran into some harsh reality”.
Hulu, a joint venture of NBC and Fox, is uncomfortable with the idea of allowing Hulu contents being watched on Apple TV set-top boxes for free, competing directly with the cable and satellite channels.
VC capital rising in China, India and Israel
Venture capital investment is still rising in China, India and Israel, while in the U.S. fell last year, according to Dow Jones. In China, venture capitalists invested a record $4.2 billion, up 50 percent from the year 2007. In Israel, 132 IT start-ups received more that $1.5 billion.
