Posts from the ‘broadband video’ Category
In the Vortex — Emerging Video Ad Formats and Business Models
February 22, 2007
Dianne Mermigas of the Hollywood Reporter has a terrific article discussing the impact Google and metric driven web advertising will have on the still much larger TV advertising business. (Hat tip: Heavy founder Dave Carson).
Boiled down to its essence, the article makes a few elementary — but big — points.
Mermigas’s broad thesis is that “Internet-related practices and values are fast becoming common place, and altering old media’s business models and expectations. The rapid adoption of digital broadband media applications is bringing us to the tipping point. You don’t hear much, if anything, about advertising resisting the change, especially when the giant likes of Google and Yahoo! are tripping over each other to quantify and qualify every legal and ethical detail about the individual users they are delivering. ”
As traditional media practices and business models morph, expect changes to many tried and true media conventions.
First, the age old ritual of TV’s “up front” ad buy, in which media buyers and sellers converge on Madison Ave. to negotiate the following TV season’s ad buy en masse, is short for this world. In its stead will be something along the lines of Google’s auction system, which attributes value not to a piece of content and its ratings but to the actual connection of relevant viewers to marketers.
Second, unlocking the value of this more direct and accountable connection will allow ad-based programming to replace the notion of paid access to content.
Finally, Mermigas predicts that advertisers and programmers alike ultimately will dissolve the dichotomy between the different platforms and evolve a set of formats across platforms.
“The nagging dichotomy between advertising form, function and price on traditional TV and on the Internet is in the process of rendering a new hybrid standard to extend across all media platforms. But this year, it is much more than an “either-or” ad spending proposition. It is about reinventing the effective and innovative ways advertisers and target customers interface in a global marketplace on fire with interactivity. Even if traditional media’s structural and psychological transformation don’t occur fast enough, advertisers now appear willing to break from convention to follow targeted consumers into customized, niche spaces. That’s the difference a year has made.”
Online Video Timeline
January 7, 2007
I just found this timeline for online video over on ReelPop. It is pretty good.
YouTube sees “Heavy” Competition in October
October 17, 2006
So, yesterday I posted about the YouTube-MySpace competition heating up. Which it is.
But, apparently, I missed another YouTube rivalry from within my own portfolio!
According to the multinational media publisher VNU :
… YouTube had to fend off strong competition in the video traffic space from Heavy.com during the week ending 8 October.
Website traffic analysis firm Hitwise reported that Heavy.com, the largest independent broadband network in the US, is the second largest entertainment video site on the web with a 17 per cent market share
This compares with YouTube’s 35 per cent market share for the same week in October.
Heavy.com outranked MySpace, Google Video and Metacafe for video traffic based on visits.
I’ll try not to sandbag my own portfolio companies in the future! I’ve actually gotten ahold of the Hitwise data, and will post once I figure out how to…
Heavy Breaks Top Ten
August 17, 2006
Thanks to the combination of a bunch of fun new programming, new social networking features, and some really good viral buzz, Heavy is continuing to see fantastic growth in audience.
Last month they were one of the 10 fastest growing websites across the Internet; according to ComScore, Heavy is now the 6th most viewed video site on the web, behind only Yahoo!, MySpace, YouTube, MSN and AOL, and ahead of Google and all the major networks, etc…
Two New Ad Measurement Models
June 21, 2006
My morning reading today surfaced two interesting announcements regarding ad measurement.
First, MediaPost's OnLine Minute announces that NetRatings finally is extending its web measurement to online video, and will develop a way to measure combined viewership for video consumed both on TV and on the Internet.
"NetRatings says it will beef up existing Nielsen/NetRatings products and patented technologies in order to properly measure digital media usage and work with Nielsen Media Research to develop integrated measurement services for Internet and television convergence."
Second, the next volley has been fired in the battle between programmers and advertisers over how to handle the increasingly substantial problem of time-shifted TV viewing. MediaDaily News claims it has gotten its hands on a Nielsen report which documents that–surprise, surprise–"the impact of time-shifted viewing will be profound on the broadcast networks." You may recall that a few weeks ago the major broadcast networks conceded that they would not charge advertisers for ads that are viewed on a time-shifted basis. Now, though, the broadcasters are working with Nielsen on a plan to measure commercials viewed both live and time-shifted. We'll see where this goes, but you can bet that we have only seen the tip of the iceberg of the time-shifted advertising problem.
In my view, the mass adoption of time-shifted TV viewing will ultimately be viewed as one of the more important developments in the media industry, up there with the emergence of broadband as a key platform for TV and video content.
The Video Sharing Shakeout
June 20, 2006
Om Malik predicts a dramatic shakeout amongst the online video sharing sites, with many casualties. I have to agree.
Clearly, I think opportunities still exist for unique and/or well branded video on the web. But, watching the VC funding pouring into the user-generated/video sharing market, I can't help but be reminded of 1999…
TiVo Bringing Web Video to TV
June 9, 2006
TiVo just announced partnerships with populare web video providers to cache their content on broadband enabled TiVo boxes. TiVo's content partners include the NBA and WNBA, The New York Times, iVillage, Heavy.com (one of my portfolio companies) and CNET.
Another step forward for the notion of "broadband TV."
TV Upfronts 2006
May 18, 2006
The television industry has converged on NYC for the annual "upfronts," during which the major television networks tout their upcoming season of programming and try to sell advertisers big ticket "upfront" packages.
I am going out on a limb to predict that 2006 will be looked back on as a watershed upfront season.
Couple of reasons.
First, digital/broadband is no longer an afterthought but an integral piece of the broadcasters' offerings. In response to advertisers' ever growing demand to reach consumers through digital platforms, the major broadcast networks are falling over themselves to satisfy the advertisers' ever growing demand for alternative digital ad inventory. (I think it is now clear why we saw the spate of announcements over the last couple months that programmers like Disney and Fox would make substantial chunks of programming available on the web). And, perhaps an even more intriguing harbinger of things to come was the emergence of upfront campaigns by a number of broadband pureplays (including my portfolio company Heavy.com which had considerable success with their upfront campaign). Advertising on the digital platforms has achieved critical mass.
Second, this is the first upfront where the TiVo ad-skipping phenomenon was widely accepted as an important, soon to be quite commonplace, aspect of television viewing. Even Nielsen is beginning to measure Tivo viewership. To be sure, there is a lively debate over what the implications will be. Whether TV ads will go the way of 8-track tapes and VCRs as opposed to morphing into "TiVo-proof" models remains unclear (my personal view is the latter), but I think the industry now gets it that, one way or another, the Tivo effect is here to stay and one way or the other will have to be addressed.
Third, as a result of the above, the fact that television audiences have become exceptionally fragmented, and the growing recognition that traditional TV advertising just doesn't work that well, TV broadcasters clearly are losing the leverage they used to have over advertisers. In fact, a few major advertisers didn't even show up for this year's up fronts.
For me, all of this wraps up into yet another data point that the media industry is in the midst of some very dramatic changes and reinforces our view that it is an exciting and promising arena in which to be searching for new opportunities.
Broadband Video Everywhere
April 18, 2006
Seems like everywhere I turn is some mention of broadband and/or mobile video. Whether it be startup business plans, major announcements, blog posts or news stories, it sure seems like this has become the latest "big thing" to talk/write about. I am not sure whether to be excited or worried. Probably both.
The big news, of course, was last week's announcements by Disney and Fox. Much has been written on those — and I am hoping to post a synthesis piece tying together the various themes in the discussion over those announcements. Haven't had time yet but will get to it soon.
I had heard at the Cable Show, and saw announced today, that yet another video-sharing site, Veoh, is getting funded. Please feel free to rant at me if I ever become the10th VC to fund a video-sharing site. I won't go so far as to say I am a skeptic, but I think it will be fascinating to see if/how YouTube and its brethren find a viable business model. As a side bar, PaidContent points to this amusing parody of the kung fu battle amongst video sharing sites.
Which brings me to what I think was a more interesting piece in yesterday's Wall Street Journal (sorry, subscription required) explaining how consumer packaged good companies like Kraft, P&G and Unilever are, despite initial reluctance, now turning to web advertising in a big way. Yet another indication that the Internet advertising economy will continue to enjoy robust growth.
Of course, I must confess one reason I liked the article is that it made very nice mention of some of the successes Heavy.com has had with major advertisers like Unilever.
But it also reinforced one of the reasons why I've spent a good chunk of the last 12 months in and around broadband video — because, although a still nascent (at least until a few weeks ago) category, it is clear that there is alot of money to be made in broadband video by those who understand how to develop content that is at once wildly popular with its consumer audience while also a wildly valuable medium to its advertiser audience.
This is precisely the challenge YouTube et al. are grappling with. As summarized in a USA Today article this week, "[YouTube] expects to reap ad revenue in the first half of this year but is cautious. To remain relevant, it needs to serve paying advertisers without looking like a sellout to its millions of average users."
The difficulty in executing this strategic balance is exactly why I quickly got so intrigued with Heavy.com in the first place last fall. While the Heavy guys cleary have a knack for developing, and eliciting from their user base, compelling video content that their audience keeps coming back for in droves, they were one of the first groups, I think, to really crack the nut on monetizing the "young male edgy humor/satire" category. They have developed a distinct voice/personality/brand, and it is precisely this same personality that appeals both to their users and their advertisers. A tricky but powerful thing to pull off.
I am one who tends to believe that a rising tide lifts all boats. Lest we forget, AdSense not only created the defining business model for Google, but it also created the defining business model for the entire Internet search category.
So, while it is both exciting and scary to see so many broadband video sites getting funded and/or launched, I nonetheless continue to be encouraged when I learn that major advertisers like P&G and Unilever are substantially increasing their budget allocations to sites (like Heavy) who understand how to deliver them a product they need and value.
Here's to wishing lots of success and ad dollars to the whole sector!
Avram Miller, Digital Archive
March 28, 2006
One of my favorite things about being a venture capitalist the opportunity to serve on boards with exceptionally talented, experienced and interesting people.
I recently joined a board with Avram Miller. Avram was one of the earliest to recognize the Internet as a powerful new medium. As a senior strategy and corporate investor with Intel for about 15 years, Avram played a pretty instrumental role in advancing the broadband revolution.
As with many things "on the cutting edge," the current wave of broadband content mania illustrates that what is old is new again. Or, in the lingo of VC truisms, "timing is everything."
I recently discovered an old Wired interview with Avram from 1996. It is a kick, showing that Avram was brilliantly visionary…and a bit ahead of his times.
That said, unlike most of us on the current broad-band-wagon, Avram can truly lay claim to having been on it from the very beginning. (OK, I'll give partial credit to those of you who, like me, were unfortunate enough to have jumped on the broad-band-wagon in 1999/2000).
And guess what? Along with the rest of the team at Heavy.com, we are finding that there is a lot to learn from a wise man who has seen the cycle's ups and downs a few times over.
Here are Avram's thoughts in 1996:
Issue 4.07 – Jul 1996 Fill My Bandwidth, Baby
Avram Miller turns to Hollywood to help keep Intel's chip factories humming. By Russ Mitchell Avram Miller describes the personality of his engineering-trained colleagues at Intel Corp. as "sequential linear concrete." A jazz pianist trained in music theory, the 51- year-old Miller fits a more improvisational profile. As corporate vice president for business development, he's sounding out new ways to supercharge demand for personal computers, nearly 80 percent of which are powered by Intel microprocessors. His main theme is new media. He's spent the last few years pushing the development of cable modems to speed Web download times. Now, with cable modems in market test stage, he's investing Intel's money, technology, and expertise in new-media start-ups. By late summer, Intel and Creative Artists Agency, the Hollywood talent kingpin, plan to open a multimedia demonstration lab in Los Angeles. The idea is to hasten the arrival of rich programming on the Web – and, not incidentally, to sell more chips. Wired: What does an engineering company know about media? Miller : We don't know much about it. We don't have to. We have no intention of becoming a media company. What we're pretty good at is judging whether or not a company has its motivator. Are they smart or not smart? Why get involved at all? Intel's interest is pretty simple. We need to grow the market for personal computers. We're making huge financial commitments by building factories [at least US$1 billion apiece] for products we haven't designed for markets that don't exist. The question is, Can we get value for those investments? If there's a real market for new media, why go out of your way to help kick-start it? The economic value of time. If we grow an extra 10 to 20 percent in one year, we hopefully keep that 10 to 20 percent forever. How did the Creative Artists new-media lab come about? We were talking to people at CAA about a year ago. Their clients were getting interested in new media. Things like Myst had a big impact. People like Steven Spielberg – and others with kids, say, from 5 to 15 – started playing these things. And they started thinking, "Hmm, look at what I could do." So they started putting pressure on CAA to help them understand where the technology is going. The lab is an environment where we can show you how to develop something in this new medium – like a showcase, a window into making an interactive movie. Show them what the Internet is. Hollywood stars feel comfortable walking around the halls of CAA, but they might not want to go to Comdex and play on PCs with the mobs. What other big-shot Hollywood types have you been working with? Care to drop some names? No. Oliver Stone? Susan Sarandon? James Cameron ? I'm not gonnaŠ. Pauly Shore? Look, we do have interactions with the top-name caliber in LA. It's not just actors, it's directors, producers, cameramen, writers – the writers will play a big role in this. You've said that the Silicon Valley culture and the Hollywood culture tend to trivialize each other. What do you mean? I don't mean there's fights. The computer industry has not really understood the importance of protecting content. We tried copy protection of software and it didn't work. So we said what the hell, 30 percent of it is copied illegally, and we build the cost into our business. But there's a big difference between protecting a piece of program and protecting a movie. A Disney movie might have a life of 20 years. If you alter a program, it doesn't work. If you draw a mustache on Mickey Mouse, you've defaced him. On the other side, I don't think the content world has understood how difficult it is to do some of the things they want to do with technology. Your interest in content assumes that you think the bandwidth is available to deliver compelling programs. We're going to start seeing higher and higher bandwidth nets – ATM, ADSL, satellite delivery. But in the next several years, most people will still connect through 14.4 and 28.8 modems. With the advent of DVD and hybrid applications where you combine CD with online service, you'll be able to provide high-quality experiences even at those speeds. Long term, we do need a high-speed connection. Movie people are getting hip to new media, but what about TV broadcast execs? Do they get it? Not really. But they're businesspeople driven by ad revenue and by viewing time. There's evidence that people with PCs spend less time with their TVs. If someone demonstrates that ad revenue can be achieved from Internet programming, these guys are going to get it. Why are the phone companies so brain-dead about ISDN? Things move slowly in the phone industry. They don't think they're being slow. I'm not being unkind. Each industry has its own rhythm. But they're blowing it, aren't they? They are at great risk. What's the coolest project you've got going? The thing we're doing that's furthest out there is Willisville, with Allee Willis (who wrote the theme song for Friends) and Prudence Fenton (an animator from Pee-wee's Playhouse). What sets them apart is their understanding of character development and their understanding of how people can affect the behavior of characters. We're working with OnLive! Technologies, too. It's an amazing experience to meet people through their avatars in the 3-D world. It becomes very real to you. And it sucks up a lot of processing power. And it does suck up a lot of processing power.
I have to say I especially love Avram's thoughts on TV executives. It only took 10 years, but hey, they've come a long way…