TV and the Long Tail It's anyone's guess as to whether the acquisition by JumpTV of CyclingTV makes sense. That being said CyclingTV actually has paying customers - $40 a year for 18,000 customers - about $720,000 in annual revenues. JumpTV recently raised $100 million in an IPO and is using its stock and cash fairly wisely (the Cycling deal was 50/50 about). But the disclosure about CyclingTV actually brings up a very interesting point. Are customers willing to pay for content that they really really really want?
I think the answer is YES they are. And maybe JumpTV has the answer - aggregation. The ability to bring the long tail into one market. After all, with only 18,000 paying viewers, how can you pay for anything else other than a basic infrastructure? But with aggregation and shared resources this could become profitable. Paid content surely prevents getting around the guys that sign the checks since there are few advertisements if any. The one thing I'm worried about is piracy for these guys. It's not too difficult for a disgruntled customer to take a stream of Cycling TV and repost it on YouTube. Or is it? I'm not a subscriber but I'd be interested to see what their DRM is....
For the naysayers out there....remember in 1985 (if you were alive back then) when someone asked you to start paying for TV (yes it was and still is free for SOME content). Well guess what that trend took off. Pay Internet TV? Maybe not such a bad idea.
The Bubble is Getting Bigger PaidContent just reported that NBC and News Corp's Clown Co, as dubbed by Google execs, video sharing site, received a $1 billion dollar valuation by receiving $100 million for 10 per cent. Earlier NBC Uni launched Didja.com a site where users can watch commercials (similar to TBS's VeryFunnyAds). This follows large VC investments in comedy video sharing sites, $30 million in Video Jug, and a boat load more in Veoh (which MTV exec Tom Freston joined in...hmmmm this could be interesting..).
Well, I hate to say it guys but this is the same exact scenario that happened in 1999 with ecommerce websites (although no lavish parties this time around). Sure, we all want to build the next YouTube but with no business model how can these valuations be sustained and which companies can absorb the loss (and potential lawsuits) of these resource intensive sites? Only a handful and Google is trying to make good on its first purchase.
We need to see a model that works in this space. There needs to be a way for producers to make money for advertisers to make money and for the user to...well the user always wins.
Could YouTube be in Big Big Trouble? The official numbers on YouTube's dominance in the video sharing space are out. Online video as a whole attracted 75% of US Internet users according to ComScore (via Mashable) that watched 158 million minutes of online video in May. The average stream is about 2.5 minutes. 35% of users use YouTube and YouTube accounted for over 20% of the online video stream total. Wow.
And now the bad news. Dailymotion a large French video sharing site was ordered by French courts to pay $32,000 in damages to a French director (along with the producer and distributor) who's CLIPS were on the site. After the clips were uploaded did Dailymotion begin to use Audible Magic which is seemingly becoming the standard in detecting copywritten clips. But what does this mean? Is this the end of the DMCA as we know it? (As an aside the DMCA stands for the Digital Millennium Copyright Act, and basically says that a Web site has no jurisdiction over what its users do, hence YouTube has been claiming as one of its defenses against Viacom). Will YouTube have to give up its users private information if they are caught infringing? Were all those Zidane Mashups from last summer considered copyright infringed?
We saw earlier this year how Digg went down with users posting the HD encryption key on its site. Will YouTube users also contribute to the backlash by posting copyrighted clips, causing massive lawsuits against YouTube and its parent, Google? And while $32,000 is small change for Dailymotion the video in question were clips. Was this fine some type of relative measure?
Lots of questions here. We're digging to get to the bottom of this and what this means for the future of online video sharing. But we do know one thing. Video sharing no matter what is here to stay.
Death to the Page View How do you track the popularity of web pages? It used to be that every page that was loaded into the system would be counted as a "view." From here, the sites with the most "views" would be counted as the most popular. However, with new technology like Ajax (think Google Maps, where you are not reloading the page) and streaming video, the page view is no longer accurate. Nielsen/NetRatings one of the bigger ratings agencies online is changing its metric from the page view to time spent on the site (via PaidContent). Right off the bat, we know that Google known for redirecting other people to the sites that they want will drop in ranking. Yahoo with its Ajax filled pages will rise and MySpace will most likely fall as well (poor HTML design forces users to visit new pages). Video sharing sites where users are spending a whopping amount of time will likely increase and crack the top 10.
What does this new measurement mean for marketers? Well, sites are able to use these new metrics to increase their CPM. However, I think we will all know which tactics work best given our demographic. The new measures also don't take into account widgets, which I think given Facebook's API opening will be essential for marketers to know (although technically we could go by number of subscriptions). So once again measurement is all over the place.
Google is going to continue to drop in terms of time spent at least with their flagship search product but I still think that contextual search and SEM are the best ways to bring folks into your online store and convert them (since they are looking for you anyway). We all know the addictiveness of social networks and email but if you leave your email open all day (as Mashable suggested) are you really engaged with the banners on there as well? Does Yahoo or Gmail have the right to charge more for these pages? Similarly we also know that sites like YouTube will rank higher but is anyone watching the ads?
I don't think the new metrics are going to tell us anything that we don't know already. It may give media companies a way to charge us a higher CPM, but I think that we know (hopefully) the ways that our target demographics use the Internet. Whether its through banners, Facebook widgets, etc, I think the best way to measure is by ROI ....
MySpaceTV looks a lot like YouTube - Prom Queen stats MySpaceTV launched today and it really does look very similar to YouTube. Besides its cluttered landing page which is stuffed with banners, MySpaceTV has nearly the same exact layout as YouTube, which isn't necessarily bad. MySpace users most likely have visited YouTube and know that site fairly well. All they need to do now is hang onto their traffic instead of direct it to YouTube. Given that it launched today, I'm not going to discuss their very slow load times as I'm sure they are working out the kinks, but I think that with all of the folks that YouTube pissed off (especially on the pro content side) MySpaceTV is a viable alternative. It's already #2 and with this new setup could overtake the top spot. The more I look at it, the more its an EXACT copycat of YouTube. Everything from the layout to the categories to the way that its sorted (although some of the things don't really work).
An interesting point to note about MySpaceTV is that PromQueen received a majority of their traffic through the social network. I'm looking at the PromQueen page and seeing that different episodes get a different number of views. I would expect recap episodes to have a low hit count, but some of the videos that have low hit counts just don't make sense. Granted I haven't been watching so perhaps the prior show lead in was weak or there was some type of grand PromQueen promotion....But the variance of views goes from a few hundred thousand to 20,000. Strange huh? Is that really the way that we consume our video? I would compare all 80 some episodes of PromQueen at 1:30 each to a 2 hour feature film. Are we really that impatient that we will skip the boring parts and fill this in with our own perceptions? My initial feeling was that Prom Queen episode 1 would be the most watched. It's not. It's episode 20: Off like a prom dress with 1.2 million views. Could that have been the day that Prom Queen was featured on the front page of MySpace? Or was episode 19 really that good? Was it the name of the episode? Because episode 67 was called Naked n the Rain and that only received 139,000 views. I'm glad that MySpaceTV captures all of these YouTube like metrics (and hopefully more) as we'll soon be able to dissect our viewing habits.
Overall, I think that MySpaceTV is going to give YouTube a run for its money. Why go onto two sites when you can simply stay on one?
Video AdSense - Relevant Ads Remember Blinkx? It's the publicly traded video search site. Mashable reports that Blinkx will soon be offering an advertising network based on speech recognition. So whenever a certain keyword that advertisers bid on either shows up in Meta tags or within speech, the ad will be shown in pre, post, or mid-roll ads.
This is definitely an improvement from Revver's model of fitting an ad in (at the end) that users have to click. Relevance should improve the response that advertisers get. How well will it work? Well the service hasn't launched yet, but I'm going to preface my statements by saying that Blinkx's service is definitely something that we need in the online video space. YouTube is doing something similar but there is only so much information that you can mine from meta tags. With the ability to actually gage what someone is saying, you can really figure out what the content is. That'll really be of value to the entire food chain of users, content creators, and advertisers since more relevant ads will be served to users, content creators will make more money, and advertisers will be minimizing wasted eyeballs.
Great. Or is it? Again, I'm not sure how Blinkx's software will work, but context is everything. Let's say Apple wants to buy the phrase Apple Computer. So everytime Apple Computer is said an Apple ad should run. Well, I think that you can see where we might run into some problems. What if I have a video where a character says "Apple Computer sucks" or "Apple Computer is a piece of s--t" or worse yet "Shove that Apple computer up your..." you get where I'm going hopefully. So then the video that bashes Apple becomes financed by Apple. Probably not where Apple wants to spend its ad dollars. The problem with this model is still that we need some type of human intervention to determine the qualitative parts of the video. It's similar to MySpace problems where advertisers didn't want to purchase ads or even AdSense because they were not sure of the context of the page. Context is key and while keywords will help in relevancy and is a step in the right direction toward advertiser AI, we still have a while to go. In the meantime, good job Blinkx for taking us one step closer to free content and relevant commercials!
The Tipping Point
Something that I've been looking at is why and how things "tip." How does a site like YouTube go from 0-60 in 3 months? Why is MySpace the premiere destination for social networking? Has Second Life "tipped" or is it still a geek's toy? Why did FaceBook grab so many users? Let's look at some thoughts into why these things happened...
YouTube - YouTube was launched by Steve Chen, Chad Hurley, and Jawed Karim, exPayPal employees in November of 2005. Shortly thereafter (around December or January) the trio has no one but the copyright infringer who uploaded SNL's Lazy Sunday to thank. Traffic spiked at that point. And even more traffic came to the site when it was reported that NBC asked them to take it down. But by then it was too late, YouTube was the "it" place to be for user generated video and any kind of online content.
MySpace - MySpace was founded by the friendly Tom Anderson in November of 2003. It started as a site to share music and eventually became "a place for friends." MySpace could be attributed as one of the first successful social networks that really brought about the entire Web 2.0 revolution. However, traffic for the site didn't really tip until what I think was the entire Friendster debacle. Friendster arguably the first social network, was experiencing slowness and server difficulty. A message was sent around Friendster saying that they would start charging and that MySpace was free. Many addicted social networkers flocked to MySpace and that was all they needed. With the newness of social networking, MySpace quickly grew and that rolling stone gathered enough momentum that MySpace is a household name.
Second Life - Second Life is the avatar based role playing world. So far its received a lot of attention in the media and by brands. However, as you can see from the chart, it still hasn't tipped. I think that its a combination of things here and one of the big barriers is the user experience. Second Life for the non techy is hard to use. That's agreed upon. Secondly its a separate software download. That's a pain. Compare this with Flash based ClubPenguin who's traffic is slowly creeping up on SecondLife, and was recently offered $500 million from Sony.
Facebook - The darling of Social Networks - Facebook was rumored to be worth in the $2 billion range. How did a dorm room start up at Harvard become one of the most valuable properties on the web? The chart below shows how Facebook really hit straight up growth in the beginning of 2006, which corresponds to their high school out reach. But why did all of these high schoolers want to join Facebook? I think here the tipping point was based on what Malcolm Gladwell calls influencers. And there are many influencers at Harvard the birthplace of Facebook. Would Facebook have survived if it started at another school? Princeton? Perhaps. University of Middle of No Where? Probably not.
I think that its interesting to look at the different ways that these things "make it." YouTube had a unique piece of content, MySpace was positioned at the right place at the right time, and Facebook had influentials behind it. What will it take for Second Life or the plethora of Web 2.0 companies? Sometimes its dumb luck.
Video Roundup Babelgum launched over the weekend (Friday to be exact I think) with some mixed reviews. Babelgum is in competition directly with Joost for quality P2P delivery of content. Lacking content (although Babelgum has Spike Lee on his side), lack of social networking, and difficult interface are some of the problems that have been cited with for Babelgum. Well, Joost started somewhere too right? I think Joost has the high profile of its founders which led to some great content partnerships and if Babelgum can do the same....
One of the early pioneers in video revenue sharing is Revver. Unlike pure views count, like Metacafe, Revver shares revenue with content creators by sliding a clickable ad at the end of the video. If a viewer clicks on it, then they are brought to the company's website and everyone gets paid. Well, Mashable reports that CEO Steven Starr is exiting the company six months after its previous CEO left. What's happening at Revver? Perhaps people aren't ready yet to click on ads at the end of a video?
Eefoof relaunches as VuMe. Reviews came in as somewhat negative and I think the only differentiator of VuMe from other video sharing sites is that revenue is shared based on actual revenue instead of video views. We'll continue to watch what VuMe is doing in this already crowded space.
Finally, my friends at Four Eyed Monsters have placed their entire feature length film on YouTube. It's the first feature available on YouTube at a whopping 72 minutes. And my friends tell me it'll be available for a week, which could be steps toward YouTube protecting their content? (Or I guess someone could suck down the video and reupload in 7 10 minute clips?) The film is actually also a pioneer in this space with a real relationship being started and grown through podcasts and technology. Pretty cool.
52 percent of users take an action (learning more to purchasing)
News was number one, followed by weather, and then humor
Companion ads (static banners with video) were most effective
The results of this study are pretty interesting especially for those of you living in New York exposed to the branding campaign that NBC Uni is promoting (via bus shelters and phone booths) about how they are innovating beyond 30 seconds. I'm also very surprised about the high number of users that take action following a video ad. Personally if an ad is irrelevant to me (for example on ABC.com) I can't wait to "click to continue" as soon as my requisite 30 seconds are up. So this means that somehow, ad servers are serving up relevant ads. I'm not sure how since YouTube is barely rolling out there new ad serving product, but I'm curious if anyone out there knows what they are doing. Companion ads are kind of an obvious thing which is what ABC.com does. No brainer there. Content wise I'd also agree that news and weather are the most watched. And again this is fairly obvious. We live in a world of Long Tail entertainment and the only common thread that everyone on the planet shares is the passage of time. So keeping up with what's new and keeping up with how you should dress (if its cold or warm, not fashion) is pretty obvious.
Marketing wise what does this mean? Well our intuition is wrong but the study is a bit fuzzy as it mentions that results were taken from 1,422 online video users. Are they YouTube watchers or ABC.com watchers? A mixture of both? Joost users? After all ABC.com only has 30 second companion ads. Also the numbers are fairly small. And of course if you have to sit through 30 seconds you will have better recollection than if you sat through 15 seconds. So this result could be skewed.
The big (and best) part of the study is the high call to action provided by those surveyed. This shows that users are not only in there for a passive experience but have their fingers on the mouse button ready to click away. It's a great sign that we're ready for interative TV.
YouTube Going Legit
YouTube previously announced a revenue share for some of its non-corporate users a few weeks ago. It recently announced a revenue share with Hearst Argyle TV - owner of local TV networks where YouTube will pay a licensing fee for some of its news, weather, and entertainment clips. YouTube also has a deal with Verizon Wireless and Apple TV. YouTube also struck a deal with EMI allowing users access to use EMI music in their clips, although EMI still owns the license and can request takedown. YouTube is also breaking ground in the pre-roll ad space sponsoring video blog Rocketboom (Rocketboom is charging $3000 for pre rolls and this number jumps to $5000 on 9/1). YouTube is slowly making the cross over into tradition media and legit media with these deals that they are striking. They're still obviously in a dispute with Viacom over $1 billion dollars.
YouTube is clearly making a splash amongst everyone out there. AdAge featured an article today about how YouTube is being used to not only advertise prescription drugs, but how consumers are reacting to it. I think the pharmaceutical business is taking a step in the right direction. YouTube is here to stay. And with YouTube slowly going legit you'll be able to see brand bashers on your television (a strange juxtaposition between UGC and professionally created content). But what can be done to protect your brand on YouTube? Honestly, not much. The first amendment protects free speech. If someone wants to "review" your product on YouTube you can't really do anything about it. However, what you can do is dispel some of those myths via a video comment, which is very different from a text comment. Video comments are almost like a rebuttal to the very video being watched at that moment. Users are more likely to watch a video comment (although it usually requires approval from the original video owner). For example, if someone posted a negative video about my BlendTec blender saying that it wouldn't blend your daily celery juice, and that video reached a critical mass of audience, I would post it up as a response the Will It Blend series. (A highly successful series featuring the BlendTec blender.)
If your video can entertain (first and foremost) and then educate (a distant second) then the video can possibly be successful to build a following on YouTube. The GlaxoSmithKline ad (via AdAge) is an extremely clever and interesting domino video that has little to do with the drug and disease, but I think that I now have a better subconscious association with Restless Leg Syndrome and GSK than I ever had!
Break.com is considering charging users for content. WHAT? What happened to the currency of the Internet? Free? The only content we've ever paid for is going to the movies. We already pay for connecting to the Internet, how can you charge us more?
Break.com will attempt to address these questions and more as investors are going to start wanting to see some type of revenues from their investments. Break (one of the top 10 video sharing sites; 310 overall, but well behind #1 YouTube) will start charging a subscription fee for exclusive content. They've already created advertiser sponsored channels (more of an Internet model) for companies like Keystone Beer. Keystone gets to pick which videos they want for their brand sponsored channel. We've been talking about how to monetize online video for quite a while. Advertising can only provide so much for free especially with the coming glut of user generated video. The refreshing thing for professionals is that sites like Break.com and others realize the potential for professionally created content. Can Break get subscribers for professionally based content? Hard to say. After all, I'd say Internet video is more like television and we've never had to pay for television at least not in an obvious manner (meaning that we all pay for HBO but we don't really see that bill when we flip the TV on). As previously mentioned, theatrical films, some pay per view events, and recorded media are the only things we've ever paid for.
If Break.com starts charging what does this mean? Advertisers, who will probably snag the best content, will have their channels subscribed to more often not only because they have the best content but because it will be free. If a Sopranos type show appears online, then perhaps users will be compelled to pay for it. However, once it appears online, there's very little that companies can do to prevent it from showing up on the YouTubes of the world. Sure there's the DMCA takedown but not after a few million potential paying customers already viewed the content. And thus, I find that pure subscription will have a tough time finding an audience. Here's a solution. Remember watching soccer games on television (or am I in the minority on this one?) Soccer has no breaks so they only time to serve up advertising is up on the upper third dashboard next to time left, half, score, and station identification. Can't we simply overlay an advertiser over the bottom sliver of a video - we already see this with the station identification watermark in the lower right hand corner? If we do this, and I guess we should wait to see how Keystone turns out, will we be turning all of our great content into another Bud.tv fiasco?
Brand Dilution There's been a few announcements this week in merger mania that has left me scratching my head. Sure, the Dow is at an all time high making stock transactions relatively cheap. Still, I think that synergies are more important unless these big conglomerates have something farther up their sleeves that they are not letting on. Granted there have been some M&A activity that makes sense: Coke buying out Glaceau , the Vitamin Water manufacturer. This makes sense as a line extension of "healthy drinking" as soft drinks are slowly falling out of favor from the more health conscious community. Further, Coke already has a wide distribution channel that the smaller Glaceau can take advantage of. Great deal here for both sides.
Then there's the line extensions that just make no sense whatsover. Even if he has something up his sleeve I really don't see how this ties into his brand. The brand I'm talking about is Trump. Donald Trump. After his successful runs in New York City real estate and Atlantic City casinos, the mogul has put his name on a few different items that didn't really reinforce his luxury brand status. Trump Water? Trump Vodka? (from the man who doesn't drink?) and the latest Trump Steaks. The Apprentice definitely reinforced Trump's image as a wheeling and dealing businessman but steaks? Perhaps vodka, water, and red meat will be given to the folks at the Trump Modeling Agency? I'm not sure, but I'm sure there's something behind this...or not, just another thing to slap the Trump name on (which at this point, might not be such a great thing - The Apprentice was not picked up by NBC).
Back into technology where I have a feeling that I know where Google is going with its acquisition of Green Border. Google is becoming Microsoft slowly and surely. It more or less has an entire suite of products and once those products become unreliant on IE and can stand independently on any browser, Google will have a portable desktop. And since you don't want other viruses you may have picked up while using your virtual desktop anywhere else, Green Border protects your home computer (note I didn't say PC). So that's Google's strategy it seems. Buy everything to make it a viable competitor to Microsoft. Google's about halfway there (market cap GOOG: 151B, MSFT: 295B).
The final question in my head (and please help me here!) is CBS. We covered CBS's purchase of WallStrip last week for $5 million. I speculated that CBS wanted to lock in the rights on Lindsay Campbell as their own Amanda Congdon. Ok, that makes sense, I think. But this morning, CBS announced their intent to buy Last.fm. We've spoken about Last.fm's loyal user base and I think its a great tool to find new artists and even old ones that you didn't know about. A StumbleUpon for music so to say. But I'm not sure how these two purchases really help CBS in the long run. CBS spokespeople have said that Last.fm helps them get that younger demographic that is so elusive to advertisers. Could be true. And perhaps this is where the synergies begin. Since the split of CBS and Viacom, CBS has all of the "old" properties, while Viacom retained the MTV's, Nickelodeons, Vh-1's, Paramounts, etc. Further as its old parent is suing YouTube, CBS has publicy said that YouTube has boosted its viewership. I think that these last purchases are probably more of a way for Les Moonves to stick it in Sumner's face more than anything else (since Sumner was so mad about the loss of MySpace that he fired Tom Freston). And for $280 million (half the cost of MySpace) why not?
OpenFaceBook The Facebook Platform, launched yesterday, is designed to do exactly what MySpace didn't want: Allow for third party content. Facebook has opened up all of its API's in order to encourage development for its site. There are tons of applications now that are sanctioned for use on Facebook. So unlike MySpace (when they shut down Photobucket, which they now own), Facebook encourages open access to their proprietary network. Facebook has some impressive statistics on growth and engagement and with the launch of their video network could really give MySpace and even YouTube a run for it.
Why is the opening of Facebook so important? Better yet, is that the right move? After all, third party widgets could take users away from the site. I think that it is. Think of Facebook as Windows. If Windows could only utilize Microsoft applications, there would be some utility but not as much as if Windows could also use Adobe products and (gasp) Apple products. Sure, the third party widgets are going to lure some users off of Facebook's site, but in the long run, users will be more engaged, Facebook will have free development, and third parties will develop cooler things for Facebook (leading to more and longer page views for the site). Think Amazon, Second Life, Linux...all of these tools were made better because users and developers could plug in their own enhancements. From a marketing and monetization standpoint, this offers unlimited possibilities. Zuckerberg noted that Facebook was the sixth most trafficked site in the country. The ability to create embeddable widgets on a site like Facebook offers huge possibilities for commerce and contextual advertising. Favorite books, shows, music, and media could be purchased off of someone's profile page. Facebooks photo application (the largest in the world) could be integrate with an Ofoto or Kodak Gallery to provide for prints. Mashable talks about some of the applications already created for Facebook. The lesson here is that closed source does not work in today's open world. The music industry learned that, Hollywood is learning, and Microsoft will eventually learn that. If we can embrace our users and partners, then we'll hae a better platform all around.
Great concept as comedy seems to be the one aspect that can be controlled in online video. The other is shock which usually comes from UGC. Prom Queen probably falls under suspense/thriller and I'm curious to see if there's any drop off from last month's reported numbers. However, as Mashable pointed out, Rooftop Comedy provides an outlet for comedians to get their funniness out there and they have links to the comedians own website. I mean, that's all well and good, but what's the business strategy? I'm smelling Web 1.0 e-commerce bubble where everyone would put a storefront on no matter how much money they lost (Pets.com anyone?). Now there's a Web 2.0 online video bubble where we can simply place a niche targeted website up that plays back some content. Are we really going to serve up that many banner ads? Are people really going to click on your AdSense that's next to the video?
I think that the real winners are going to be the TV Guides in this new world. Is it Blinkx (which IPO'd overseas by the way)? Is there a way for us to find the content we want online? In the world of the long tail, this will be the company (Google?) that emerges from the dust as the broker of viewers and content.
Everyone's a Star
The ever popular live webcast Justin.TV has turned Justin Kan into an overnight web celebrity. He's opened his life up to the entire world, everything from police raids, landlord eviction, even things in Justin's personal life. Justin Twitters his goings on and keeps everyone in the loop about what he's doing. At just two months old, the site has really gotten some great traction. So, what's next for Justin? They are opening the site up for other live webcasters to become the next Justin. Via TechCrunch, you'll be able to create your own URL's, broadcast your own Twitters, real time chat, calendar, everything.
This idea is really really interesting. I'm not sure how much traction it will gain, although as hardware costs continue to drop a decent webcam attached to your hat (ala Justin) would set you back about $50. Further as we are already impatient enough when you don't respond to an email immediately (and hence IM is so popular) we can actually see what you are doing as to why you aren't responding. Could Justin.tv be the next MySpace?
I don't know about Justin, but I know that the majority of us can't stand to be "on" all the time (like in the Truman Show). Even some stars need their alone, quiet time. Justin is really sacrificing his life by broadcasting 24/7. I think college kids could probably get away with putting a webcam on your head, but what about when you "grow up" and get a real job? I don't think your employer would be too happy.
But the real value in this then becomes who we are putting our webcam on top of. While the rest of the magazine industry has been shrinking, we've seen growth in celebrity gossip magazines. We've seen "glimpse" type shows like Curb your Enthusiasm (look into a day in the life of Larry David), or Entourage (look into a day in the life of a movie star) really take off. However, these are things that are made to entertain. Could you imagine the laws that would be broken if we put a Justin.tv on Donald Trump's head? All of the deals that he would be doing would be known before they were announced. Sergey Brin's head? You'd be able to know what other medium sized company he was going to buy next, run up the stock price, and wait for the official announcement (although I'm sure GOOG traders are watching Sergey's Justin.tv page too). So it really comes down to celebrities and Hollywood celebrities at that, otherwise I'm sure alot of information that we don't want out there will get out when we forget to turn off our Justin cam.
7 Months for 10x Return in Online Video...Not Bad
You can make money in online video! WallStrip, the video blog about stocks and investing, has been confirmed to be purchased by CBS. Rumors have said $5 million was the purchase price. Not bad for a show that started last year in October and to date raised about $600K. As one of the producers of the show stated, its Pop Culture meets stock culture. If you might remember Rocketboom, the once popular daily video blog, starring Amanda Congdon, in which she left for ABCNews.com, this seems to be a similar play. Lindsay Campbell, WallStrip's hostess, discusses reasons for why stocks are hitting 52 week highs in a somewhat playful manner, looking at a company's customers, "man on the street" type interviews, and visits to a company's retail stores if any.
However, as many other bloggers have questioned, who is watching this? It's definitely an entertaining show, but true Wall Streeters won't have time to watch the 2-3 minute daily episodic. Even on Revver, where the show is hosted, the popularity of the show appears to be correlated with the subject matter. (Most watched is the ever popular Cramer, followed by AAPL (anything Apple is interesting), then of course Google, and then some of the pilot episodes). Alexa has WallStrip at 65,865. Surely better than Bud.tv, but worth $5 million? Others have speculated that CBS made the play to lock down charismatic host Lindsay Campbell, which could be true.
Regardless of reasoning, congratulations to the team at WallStrip for sticking it out and making it happen. Big questions remain though:
How WallStrip will continue to be distributed (via CBS.com?)
Monetization? (PreRoll, PostRoll?)
Demographics? (Who IS watching this?) The purchase gives hope to many of the other video blogs out there that would like to create some kind of liquidity event. I think execs at CBS were mainly into the content as opposed to the traffic and statistics. But the Internet definitely gives these execs (similar to film festival) a chance to see how content (which no one can predict) will do in front of an audience. I'm interested in hearing CBS's side to this story.....
Virtual Worlds the New Social Network? We've all heard of MySpace, YouTube, Facebook, and the myriad of other social networks that have popped up since the infamous Friendster spawned the social network revolution. MySpace sold for $580 million and everyone has jumped on the social network bandwagon. Since then however, we've had some interesting developments in the space including virtual worlds, which is essentially a social network based on a movable avatar. Second Life is the most popular of these with a in world economy and real money being transacted. I previously wrote about how I thought that this would be an interesting addendum to the Web with Linden Labs (who owns Second Life) to open up their architecture and allowing anyone to plug into their API (application programming interface) similar to the World Wide Web but in 3D space.
While I still believe that this is Web 3.0, I can't ignore these new Flash based applications like Habbo Hotel, Webkinz, Club Penguin, Runescape, and a bunch of other in browser applications. While most of these are for younger users (children and younger), there is an appeal to many based on the lack of a download and simplicity of it (a common complaint about Second Life is usability). Recently Sony was in talks to acquire Club Penguin for $500 million+. (via Techcrunch) This puts Club Penguin with a demographic heavily skewed toward youth right up their with MySpace. The big difference between the two is that users are willing to pay a fee to dress up their avatars in Club Penguin and have access to members only areas. I think this customization will allow these social networks to finally monetize. MySpace which allows HTML customization is free, but with virtual worlds, the ability to feel like you purchased something as you would in real life appears to be worth payment. So users feel like there is value in having customized clothing for the avatars which is similar to having personalized wallpaper in MySpace. It's an interesting concept and I bring it up because of the potential for true interaction with your customers. There is now a way to track to see if users would like to use your product for their avatar (which would be fraction of the cost of real world usage). Further, as I previously mentioned, in the virtual world you can create anything, so another great opportunity to see how users interact with your brand. Watch this space since it appears that it will follow the way of the social network where a virtual world will appear for the long tail.
Lonely Girl on Amie Street
The ever popular webisode LonelyGirl15 will now be featuring music from AmieStreet. LonelyGirl15 is the extremely popular breakout hit on YouTube that featured a video blog about a girl, her problems, and her friends. An extremely popular hit on YouTube it racked up hundreds of thousands of hits before it was outed that the girl was actually a Jessica Rose in Santa Monica and that the content was scripted. However, it was too late, LonelyGirl15 was a hit and to date still averages hundreds of thousands of views. Enter AmieStreet. We spoke about AmieStreet a while ago as the ultimate in supply and demand economics. Users purchase music and the price goes up. Up to 98 cents (1 cent cheaper than Apple's iTunes). Now the popular video blog is teaming up with AmieStreet's artists to try and push music through to its users as a way to further monetize this medium.
Interesting concept, as AmieStreet features many unsigned and unknown artists that would love the exposure on LG15. Is there a way for users to know that the songs are available at AmieStreet? How will they track sales? Obviously if this concept works we will see a spike in the featured artists on LG15, but is it that simple?
I think that this is a great idea since music and the moving image have always gone hand in hand, and some shows have even made hits (The Rembrandts and Friends). I think the challenge here is to let the user know that the songs are available for purchase and if the song is from one of AmieStreet's more popular artists to have a special link that let's the producers know where the lead came from.
Product Placement Rears Its Head Online
Someone is finally listening! In an announcement yesterday (via Mashable) VideoEgg announces their exclusive syndication strategy with The Burg an online series about life in Williamsburg. The Burg which aired in June 2006 and is available at theburg.tv started as a twenty minute sit com like series. However VideoEgg appears to be syndicating four minute episodes that are sponsored by Motorola and therefore featuring Motorola products.
Well this was what I've been talking about for a while. The integration of product with content in order to convey lifestyle messages to an audience. The cool hipness of Williamsburg residents should cross over well with the audience that Motorola is trying to attract. Now I guess the big question is if Motorola is willing to split the sponsorship or if The Burg producers are willing to up the ante and not only have a cell phone sponsor but also a clothing sponsor, sunglasses sponsor, watch sponsor....
Crowds Being Manipulated I didn't want to write about this, but I think that if its brought to attention to most of these online platforms, perhaps something will be done about it. Some of the most influential websites include Digg, Reddit, YouTube, MySpace, and Yahoo News. Like most social networking sites, these sites include areas for superlatives, that is Most Viewed, Most Emailed, Highest Rated, etc. Collactive which Sequoia Capital invested in (via The Alarm Clock) helps you get your story to the top of these sites. You simply submit your story to Collactive and they utilize their network to affect the social network rankings. Digg, of course, is not happy with this, as their tool like most of the other tools above is all about the collective "wisdom of crowds" and not about a single lobbyist manipulating the system. However, as Mashable has pointed out before, its fairly easy to game YouTube to get to the "Most Viewed" list via a couple of browser plug ins and a desire to do so.
As you can see this is a big problem not just for marketers but news in general. To some extent, yes, we need editors to make sure that we get real news on the front page instead of simply the most viewed, otherwise we'd still probably be reading about Anna Nicole. But at the same time, Web 2.0 is about the collective intelligence of the group, and not simply the brute force that Collactive or any other system manipulation provides. And therefore you can see the danger here. The Web is about equality and not about money. However, if tools can be used to receive honorable mentions, high diggs, YouTube views, then the rich will continue to get richer. Great products and services will still be available online but will need to compete against the deep pockets of larger companies whose products might not be as superior. Furthermore, if we know that these rankings are being manipulated then what's the point? It becomes editorial again and the most Digg'd article becomes similar to "Collactive Presents..." and YouTube's Most Viewed becomes "Videos who's owners had nothing better to do but refresh a few hundred thousand times in order to draw traffic to their own websites."
It's a big problem for Web 2.0 just like spam was a big problem (and still is) for Web 1.0, especially for YouTube, where SuperMoviesDownload.com is trying to steal some of their traffic by gaming the system. And based on this, perhaps they will be able to more accurately reflect the collective wisdom of crowds...
Survivor made television history as being one of the first reality shows on primetime network television. (I think The Real World on MTV was the first real reality show, but who's keeping score?) Since Survivor and Richard Hatch's win, television has gone on to produce hundreds of reality shows and rekindle the game show as a source of prime time entertainment. While many cited reality television as simply a fad, others have noted the strength of reality not simply in the economics (sometimes 20% of the production budget on a scripted show) but also in the fact that the audience has an opportunity to determine the outcome sometimes (ala American Idol). It appears that audiences want more and more power and when you hear someone in the theater screaming "Don't open that door!" they really mean it.
Well that's great that reality is here to stay, and there's been a bunch of horrible shows out there in the genre and there's been a few that have become part of our culture (The Apprentice, Dancing with the Stars, and of course American Idol), but what does this have to do with marketing? You may remember LonelyGirl15 the YouTube vlogger that was outed as being scripted, and racked up hundreds of thousands of hits all the while. There's been the Subservient Chicken, where you can control the chicken via a text box. Recently I noted a "Text Your Own Adventure" Spiderman video on YouTube. And even more recently, the Diesel Underwear marketing campaign, where two "Heidies" capture a Diesel salesperson and lock themselves into a hotel room for five days. Visitors to the site were able to communicate directly with the girls by asking them to write their names on the guy's flesh, singing a song, and just about anything, similar to Subservient Chicken. There was no explicit branding but a lot of Diesel underwear as product placement. Reports were cited that traffic to the site spiked to five times its normal traffic. So that's it. A reality interactive commercial, creating an interactive event (you can communicate LIVE) without any scripts (clearly since you can ask them to do anything) with a great branding campaign (all of the beautiful people in the video in their Diesel underwear). The two hottest trends out there reality and interactive combined into one. Will we see more of these campaigns? Absolutely. But I think we'll also see more combinations of interactive commercials scripted or reality using the Internet as enabler. We'll see....
Video Ad Overview So the big question of Web 2.0 is how to monetize the online video. Revver has tried to embed an add at the end of the video, Metacafe serves pre-roll, and VideoEgg has an ad overlay that plays during the life of the video. Recently served up are Adap.tv which provides some type of contextual ad placement in the bottom of its player as the video is streaming (via Mashable), ScanScout (via TechCrunch) offers contextual text overlays on the video, and more recently YouTube announced their inline and post roll advertising method. (via Mashable). Are video overlays the way to go? Possibly they could be. However, YouTube's demo doesn't make too much sense. As Michael Arrington notes, the ads served up via YouTube are not relevant to the video at hand and its way too easy to ignore them, while Mashable has the opposite view point. I'm not agreeing with either since I still feel that video ad models are interesting but as a user they are still ads. I'm a true believer that content is king and integration of the advert with content is the best way to go. Remember when Alias was sponsored by Nokia? Or the obvious product placement at BMW Films? I think that advertiser sponsored shows really build goodwill with audiences AND if an element of product placement is involved, great recall of products. However, while I am writing this I know that many are citing the huge bust of Bud.tv. Some products are definitely trickier than others.
However the question if video overlays work remains. And only time will tell. I think though that video overlays are a step in the right direction toward interactivity. As I previously mentioned, video games are the most interactive of movies where you make a decision nearly every second (or several times per second). As TV watchers, an extremely passive activity, we are not used to interacting with anything, whether it's ads or any other type of clickable. Video overlays are bringing us one step closer to that next generation.
Social Network Woes? This past week MySpace announced the purchase of Photobucket for $250 million in cash. Compared to News Corp's $580 million acquisition of MySpace, this looks relatively expensive. Further since Photobucket users are primarily MySpace users, News Corp is paying a lot for an incremental amount of eyeballs. Why would News Corp do such a thing?
Well, in a case of the rich getting richer, MySpace is the primary destination for social networkers out there. Sure, there's LinkedIn for business folk, Friendster for early adopter social networkers, Sneakerplay for sneaker lovers,Facebook for college students and so on and so forth. However, nothing beats the shear strength of MySpace's reach and depth (176 million as of right now). MySpace helps to launch many items of interest including a high proportion of Michael Eisner's Prom Queen episodes, various movies and television shows, and of course the original intent of MySpace: music and unsigned bands. MySpace video is second only to juggernaut YouTube and the numbers for MySpace are staggering, with the social networking site consistently in the top 5 sites hit, searched for, and session time.
MySpace is protecting its territory and rightfully so. However, those of you who remember Friendster also remember how quickly that social network flickered out. With niche social networks coming out, MySpace wants to be the ONLY destination for social networkers. Two weeks ago, I was notified that my account on Nike's Runner's social network would no longer be supported. I suspect that as time goes on this will be a common scenario. However, the niche social networks do have targeting which many advertisers find valuable. The social network is stronger than ever however, we are slowly seeing segmentation. I would compare this now to the age of network television versus cable. We have the big players, the MySpace, Friendster, LinkedIn, and Facebooks (akin to ABC, CBS, NBC, and Fox) and then the niche players like SneakerPlay, MuscleDog, Barack Obama Supporters, etc which all serve a very important purpose. And if we take this a step further, I could definitely see MySpace purchasing other social networks (like StockPickr for example) similar to NBC and CNBC, simply to sell highly targeted niche advertising.
Music Video Long Tail Ever since Chris Anderson's book The Long Tail came out, there's been a lot of news and buzz about it. Whether its the irony of Pirates of the Carribean setting a blockbuster record (since broken by Spiderman 3) or the reality of the Long Tail happening (Rhapsody, YouTube, etc), the Long Tail has become a part of our vernacular on the ability to pull up on demand any piece of content ever created. Amazon.com is already a Long Tail for books, iTunes could be a long tail for music, eBay is a long tail for other people's stuff, and Google is a long tail of the Web. Last.fm the popular social network music community, has launched a long tail not only for music but also (soon) for music video. Via their press release, "Last.fm aims eventually to have every music video ever made on the site."
Content creators out there can do nothing but rejoice over the Long Tail. After all, in the TV business, for example, while they make money on the initial run, real money is made in syndication, see Seinfeld, where advertisers are putting up new money for the space every time. In essence, Last.fm is providing a distribution platform for artists to be available when the consumer wants to see it. So, if someone mentions A-Ha's Take on Me video, you'll be able to call it up on demand and A-Ha (if they're still around) should be able to get a cut of the advertising served up against their content. Marketers should also rejoice over the Long Tail since content now from various eras or genres can now be identified. So, if you are trying to sell a product to a certain age group or demographic, music tastes could be identified to pinpoint that target. Radio has done a great job of that but no one has the time to sit through a radio commercial anymore. Perhaps, Last.fm could partner with Poptopus for a fairly interesting business model and since they have an embeddable player we wouldn't be stuck with the latest iteration of a revenue model that YouTube has come up with.
Juiced! Joost (pronounced Juiced) has been signing deals left and right with everyone from Viacom to CBS to independent filmmakers to now Heavy.com (via Mashable). It's being billed as "a new way to watch TV" bringing the best parts of the Internet (social networking, time shifting, etc), together with the best parts of TV (high production quality and quality content). Joost created by the founders of Kazaa and Skype (in other words pretty smart guys), could be the next YouTube killer? While Joost doesn't support user generated content (yet?) most of YouTube's traffic or at least a consistent portion of it comes from YouTube partners like CBS, NBA, and other established brands and Joost could be taking a large portion of those eyeballs away especially since YouTube's quality has been criticized as of late. I think that as an audience we seek a more interactive user experience. On one hand we have traditional television where we simply watch. The most interactivity we have is by flipping channels. On the other hand we have video games where we are essentially watching a movie but one in which we are making a decision every fraction of a second. The trend appears to be toward the latter, as we see an explosive upward trend in video games and a gradual downward slope in TV. However, to graduate everything to a video game would be much to extreme and I think that Joost will do a great job in letting people understand that if they are interested in the t-shirt that Matt Fox from Lost is wearing, they can pause the show and purchase it in real time and then go back to watching. Further the social aspect of TV watching will have content creators spinning even more elaborate webs than the ones in 24 or Lost, which will engage audiences. Ad model here? I'm not sure, I think that Joost will probably provide some type of interactive commercial as opposed to the traditional 30 second ad spot. Perhaps Joost can even provide some more power to the almost dead Bud.tv?
Keep an eye on this space as I can't wait to download my Joost trial now!
Marketing wise, what does this mean? Well, I think that we can now have those interactive, flashy (not Flashy if you get the difference), and interesting ad campaigns that we've always wanted to. Targeted and completely relevant to the content of the page, these new widgets are more catchy than Adsense and hopefully will provide more value to the advertiser. Time to rethink your SEM strategy!
Monetizing YouTube? ... Not Yet
On YouTube's blog the "YouTube" team mentions that they are going to begin to share revenue with their more popular users outside of their "partners." Partners currently include the biggest traffic drivers to their site like the NBA, CBS, lonelygirl15, and NBC. Now they are going to share revenue with popular users like LisaNova, renetto, and smosh. Revenue share will include participation in Google's Adsense network. This announcement also comes off the heals of Afterworld (Bud.tv's foray into online video content) was announcement (via Mashable) as the first test of YouTube's ad program.
A few very simple questions spring to mind with these announcements. First and foremost: Why don't they share revenue with everyone? YouTube is easily gamed and they are sharing revenue with channels that have the most subscribers or views. You could easily build a bot to knock your views onto the Most Watched list or create many accounts to build your subscription list. And if its a logistical matter of paying out small amounts, have a threshold amount (like $5), similar to Revver. Secondly, this revenue sharing system (of clicking on AdSense ads) doesn't really work. Maybe its my content but I've tried it out (also via Revver) and perhaps its Revver's smaller advertiser base but I've never really had the desire to click on an image based Revver ad let alone a text based Google Adsense ad. Thirdly, most people watch YouTube content not on YouTube but via YouTube's embedded player. (See yesterday's post on Prom Queen and MySpace). Overall, though, I do have to applaud YouTube for making an effort. They're hit with a billion dollar lawsuit. They're probably getting a lot of heat from shareholders about their ROI ($15 million in revenue vs $1.7 billion purchase price). I'm not sure what this Afterworld model will look like but I hope it keeps the viral aspect of YouTube going with a way to embed the ad within the content.
Eisner named Prom King The results are in and Michael Eisner wins ... or does he? The anticipated results for the one month old Prom Queen Internet serial are in from Eisner led Vuguru. According to Mediaweek, the 2 minute web episodic is averaging 200,000 views per day and an aggregate of 5.2 million views since its premiere on April 2nd. Now that's pretty impressive considering that some of the weekly most viewed on YouTube are 200,000 (in fact, at 200,000 it would have been 15th on YouTube's Weekly list). And for many of us, we can actually go back and watch these clips at our leisure and thus racking up more hits. Further, Prom Queen has garnered more than 18,000 friends on MySpace where users are treated to a sneak peak of the show. Out of the show's 5 million views, MySpace accounts for nearly 4 million, followed by Eisner's other company, Veoh, at about 1 million, YouTube at a quarter million and PromQueen.tv.
Given the long tail, that's a hit. Prom Queen is receiving on average 200,000 views. That's not taking into account any of the archived views or streamed mobile clips. That's an amazing number, especially one that can be sustained over (thus far, 40 episodes). I'm not going to comment about the content, although, I got into it for a while, but then my interest level dropped off (probably because I'm not a Prom Queen friend....yet). The production values are phenomenal and I almost wish there was more to watch at the end of my two minutes. Ok, so the content is great, production value is great, but the big question is this: Is it bringing any value to the sponsor, HairSpray the movie? I'm not sure, although it probably is bringing some general awareness to the movie from this tween demographic. The other question is this: Is this model easily replicated? The team that put together Prom Queen also put together a daily webisodic called SamHas7Friends, which while good did not receive the same number of hits as Prom Queen. But again, that, I guess was an experiment (a very successful one) that landed them the gig with Eisner which didn't have the P&A (prints and advertising) that Prom Queen has (although Prom Queen has no P&A but in web speak, they have banner ads and big time press and a big time backer). So...what's the model here? Does this have to be something daily? What frequency? TheBurg.tv comes out monthly with their 15-20 minute episodes and I think they've done fairly well (537,686 on Alexa vs 148,798 for Prom Queen). Is it the length of time? 2 minutes really does keep you on the edge of your seat... What genre works? My gut would say comedy or thriller but watch YouTube and you find all types of things. Well, I guess keep watching this space for more information as we continue to experiment in this new new world.
The Final Frontier? There's been a lot of speculation about Web 3.0 and what that will mean in the coming months and years. A quick recap - Web 1.0 was simply push technology, technology similar to a newspaper where a central editor pushed out content to you. Web 2.0 (where we are now) combined Ajax (pages reload with hitting refresh, similar to Google Maps) with an interactivity feature like a blog, social network, or rating system with the first Web 2.0 properties being Amazon.com, eBay, and Craigslist. Web 2.0 has definitely made an impact on the current web with nearly all sites offering these features and valuations skyrocketing into the billions (see YouTube). The most important aspect of Web 2.0 though is the fact that it is so engaging that Web 2.0 sites are one of the stickiest sites on the Web and one of the most visited (behind search engines). Now if you think about where the majority of us spend our time it is on video games. Yes, even older women spend time playing video games online, since games include not just Grand Theft Auto but Sudoku and FreeCell.
So what's the point of this recap? Well, its definitely to figure out where the Web is going. There's been a lot of hype over Second Life (kind of a Sims like game where there really is no point). There's also been a lot of hype over video games including Sony's Virtual World for PS3 users. What about the combination? Hitwise came out with a report yesterday about how quickly virtual worlds have been growing and Runescape is #1 with 44% of marketshare to online worlds with Webkinz coming in a distant second with 14%. This, of course, does not include downloaded virtual worlds like Second Life, or the ever popular World of Warcraft, although I think at some point Web based games may overtake these downloaded versions.
The virtual worlds cannot be ignored. I think that we all like the aspect of the interface coupled with the Web 2.0 characteristics of real people that we can interact with. Brands now will have that intricate product placement opportunity ever so prevalent with video games, an ability to monitor dialogues, and a chance to see what people will create and do with their brands given a blank slate. Is this Web 3.0? Many think so. Many think that its simply a way of representing Web 2.0 in 3D space. I think that if its not Web 3.0 at least it will be Web 2.5.
What Are You Doing? With all of the hype surrounding Twitter, I just had to write about it. For those of you unaware of Twitter, it is a minute by minute, second by second updater that you can post to via SMS or the web. It's popularity really grew after the SxSW film festival about a month and a half ago, and its been growing ever since. There have been some Twitter clones out there, like a Facebook or Bebo, however Twitter seems to have rapidly become its own verb in a very short amount of time. The sign that Twitter has made it to the big time is the new Barack Obama account that is a featured Twitter member. While Barack is the most Web 2.0 ified of presidential candidates (he has his own social network, YouTube, MySpace, etc), something about Twitter is extremely compelling. Unlike Facebook's automatic updates, Twitter allows you to write about something when you WANT to write about it and be able to broadcast this to the world (or your subscribers).
So you're probably thinking "Why would I want to know what you are doing at all times?" From a personal perspective, you probably wouldn't. (You definitely wouldn't.) However, from a brand perspective and perhaps even from an IR perspective (although this is very far from happening), you might be interested in knowing what is going on and a daily updated blog is simply not enough. Diehard Apple fanatics would be able to know Steve Jobs every thought at any time of the day. Fans of 24 would get to know what "Jack Bauer" was thinking every second of his day. And supporters, or potential on-the-fencers would be able to know what Barack Obama's viewpoints were...every second of every day. Sounds almost too good to be true, and it is, but the point that I want to make here is that as more and more tools come out that are being adopted by mainstream (right now it is the blog), consumers will be demanding more and more usage of it, which means allocating more resources to updating your Twitter / blog /MySpace profile / YouTube channel
GooTube Merger Complete? YouTube is supposed to be testing out its pre and post roll ads this week according to Businessweek (via Mashable). However, Mashable brought up an interesting business model which seems to be a perfect compliment to YouTube's parent, Google. I've been arguing for eternity that I don't believe in pre, post, or mid roll ads. We all know from our own television viewing experience that they're annoying, intrusive, and very ignorable. So, that being said, the idea was to integrate AdSense with YouTube results and "Related Videos" section. Since more and more advertisers are hopping on the YouTube bandwagon presumably they'd want their content to be seen by more and more viewers. This in turn means that they'd be willing to pay for top placement on certain tags....or will they?
I think that this is a great idea that will, in the short run, help Google recoup some of its investment in YouTube. As long as advertisers can continue to make compelling content, viewers will be enticed to click. However, this does bypass the viral aspect of YouTube. After all, when you hear/see of a viral video how do you learn about it? Maybe if someone tells you for example about the Dove Ogilvy video you'll do a search for it...maybe. Most of the time, you'll be emailed the video or linked to it or it will be embedded like this. Lost revenue for Google. But other than that, I think advertisers will really want to own certain tags, since after all they are only paying for that interaction if it happens. I also love the concept of how the sponsored videos are embedded into the YouTube widgets. Popular videos come to the top. That way, everyone is making money similar to the entire AdSense model. Another thing to be weary of though is the gaming of YouTube, that is, writing a bot that can automatically ratchet your views into the hundreds of thousands. The Butterfly Effect magnifies this by placing your video in the "most viewed" category where more and more people will be curious as to why your video was seen so many times.
Despite these issues, which I'm sure Google will somehow resolve, I love this business model for YouTube, at least for the short term where advertisers/filmmakers can purchase placement for their videos and users know that they are purchasing that space. The question of whether this concept can translate from AdSense remains to be seen....
If you can't build it, BUY it. Stockpickr, a social network geared around the portfolios of various investment professionals, was bought yesterday by TheStreet.com for undisclosed terms. We've been talking about Stockpickr for a while now and whether or not the collective intelligence of the group could predict the fortunes of the market. We've noticed that Marketwatch launched something similar with so-so results. However, the difference is the aggregated knowledge that Stockpickr has, boasting the portfolios of Warren Buffet and George Soros.
I think that Stockpickr was a great acquisition by TheStreet.com which can utilize the social networking aspect to bolster its editorial content. The Wisdom of Crowds approach holds again, as savvy investors dart to see which stocks were picked by which investment gurus. The real reason however that I wrote about this acquisition was because of all of the press surrounding social networks. MySpace and Yahoo both have equal page views, however MySpace has a CPM that is a third of Yahoo. I wrote about metrics that MySpace commissioned to determine what the value of a friend add is. Facebook, the cover story of this month's Fast Company, was reportedly offered a billion dollars. YouTube of course $1.65 billion. A lot of money is being thrown at these social networks, but at the end, this money needs to be recouped. Of course, you can never charge someone to have an account, but if you can't do that, then how can you monetize this? Do you charge for premium content like TheStreet.com? Perhaps, after all this is how equity research makes their living (sort of). While it was a great buy (terms pending, of course) it remains to be seen if Stockpickr really is a stock picker!
MySpace Marketing Metrics Today's AdAge mentions marketing to the MySpace set through profiles and tries to quantify what its worth to a marketer when you "add" them to your friends list. The study was brought about due to the much lower CPM that MySpace is receiving as opposed to a Yahoo. In the end of the study, the real value of the brand interaction on MySpace was not simply the brand itself but how the brand actually plays a part in your daily life. Therefore, the value is four times over because of the actual endorsement from someone that you know, and how this person has benefitted from the brand.
The results here are not rocket science however. I think that the more that you engage someone with a feel good about your brand the better. What this study has done was given marketers a way to quantify that (and in essence put a dollar value on it). I wrote about Coke a few days ago and how they are creating a Second Life contest in which you "create the essence of coke." This is similar. How do I capture the essence of your product/brand? Why is your product/brand one of my friends? The brand needs to come up with a reason as to why people should talk about it, whether through a contest, feedback, or comments. Hence the explosion of all of the viral video contests on YouTube. How does my brand make you feel? Hopefully that is a positive experience although in the case of GM's viral video contest there was some backlash.
Finally, the study mentioned that just having a profile on MySpace didn't contribute to much. Three things that the study found were: that they gave a way for consumers to tell their stories, they gave people something to talk about, and they also provided incentive via a contest or promotion. So in the case of YouTube, #1) Video #2) your product #3) the prize. With MySpace's more flexible platform #1 could be a myriad of things. Creativity is the limit and I think that MySpace will work well with a certain type of brand and that clicks on MySpace may go the way of banners.
Now, I have to note that user generated content and short form content seem to be grouped together at least in the way that eMarketer has presented it. However, I have to point out a distinction between pure amateur video, prosumer/semi professional video, and professional video. While amateur video will always have a market (wacky clips taken on the moment by your cell phone camera), the rising of the "middle class," the prosumer/semi professional video will be the one to watch. These are the filmmakers/videographers with the new $5200 AG-HVX200 HD Panasonic camera, the latest Final Cut Studio for $1200, the latest Adobe After Effects for $1199 and so on. They'll have all the tools to make professional grade media, but at a fraction of the labor cost, and without the connections to achieve mainstream distribution. If you notice the top 10 all time viewed YouTube videos, 7 of them have editing that is probably beyond the scope of iMovie or Windows Movie Maker.
I've argued that semi-professional videos will soon become the growing segment of online video, but as a marketer, how does that affect you? I think that it may mean access to lower production costs and more ideas for getting your brands out to audiences. From my limited knowledge of production, I know that it takes 5 guys to change a light bulb due to all of the union regulations out there. Well, now the guy in Iowa can create similar content at a fraction of the cost without the labor unions. It also means that with large prizes like a Superbowl Commercial (a la Doritos), more and more prosumers will be vying for an opportunity to utilize your marketing muscle to make it big. If Frito Lay were smart, they'd be asking some of their runners up to be creating their next wave of commercials (again at a fraction of the cost). But, here's the most interesting one: As computer skills become as necessary as typing skills were 30 years ago, we're going to see a new age of marketer: the creative techie marketer. Marketers: Be on the lookout for this person (or these people) as they will be pushing the frontier of what is possible in this new and exciting space.
Coke has really embraced the young consumer market with this promotion as they have a MySpace page, encourage you to upload your Second Life creation via YouTube, and of course have you create something in Second Life. This is a full embracement of the Web 2.0 sphere which is something that I haven't seen yet. I also think that Coke is trying to make up for the backlash they received from not fully acknowledging the diet coke and mentos phenomena. While the prize is kind of lame, a trip to San Francisco to be in a documentary, I think that Coke will receive a good number of entries simply based on the fact that people would like to win this very first Second Life creation prize, especially since the contest is about capturing the essence of Coke, and not having to create something that actually works. Again, the great thing about the "flattening" of the world today is that professional tools are now available to the prosumer. Second Life might not be Maya, but it allows you to share with others what is in your mind. Final Cut Pro is the industry standard. After Effects is used in Hollywood movies. And the great thing is that all of these programs install on your MacBook Pro. The bar is going to be raised in terms of production, but alas even like Hollywood, content is king. And in Coke's words: "A truly unique and exciting stick drawing is better than a been-there-done-that professional 3D animation."
The Butterfly Effect The New York Times had an interesting article this weekend about how Hollywood and the music industry figures out if they have a hit in the early stages of its career. They don't. In a study that seems like it would be a great case study for the Tipping Point, the author, a Columbia professor, talks about a study that he conducted that talked about rating music. In it, he subjected one group to simply the names of songs and bands, and the other group also had the number of downloads on it. As you can slowly see, the one group with the download number had markedly skewed results than the other one. Turns out that the subjects were not only influenced by the music but also by the number of downloads. The Butterfly / Snowball Effect in play here, where people are influenced also by what they perceive others to like. He goes on to site examples of Harry Potter being turned down by eight other publishers, the Beatles, Star Wars, etc.
Well how does that affect your marketing plan? Very interestingly, this comes back around to social networks and the Tipping Point. People have the herd mentality which is why even a stock price falls or rises higher when perceived news comes out that is bad or good, respectively. We are all Lemmings to one extent or the other. We are social creatures, and we don't want to be left out. So, in this case, we need to find those influentials, those people willing to take a risk and endorse something (even if its as simple as putting it on a blog, MySpace page, or creating a YouTube video about how great something is). They're taking this risk, knowing that if all doesn't go according to plan, their reputation is on the line. But who are these people? I think that while mainstream media is the easy answer, you can find blogs that are certainly influential to a certain community (TechCrunch for techies for example). Tila Tequila, the infamous, most "friended" MySpacer. Perhaps you have to "game" a system to even be noticed. I know that when I go to YouTube, there is so much content, that I just want to view the videos with the most hits. People have figured out how to game these systems to appear just there (although their rating reveals what the content really is). I'm hoping that this is helpful for those of you out there trying to market your products in this vast ocean of "stuff." (After all, MySpace definitely is not the cleanest or best social networking site, yet, they somehow caught). But if I could figure out the next hit, I would be doing so, and as William Goldman once mentioned - "No one knows anything." Very true not only in Hollywood, but when trying to figure out who will be the next YouTube.
So the branded television network does not seem to work. Although 150,000 visitors is not bad, granted with a $30 million spend they should have received more. Personally I haven't watched any of Bud TV's clips until this post. Replaced by a Chimp and Afterworld are two shows that I've watched on YouTube. They are not bad although Afterworld seems like more of a slide show than a movie. There is no visible product placement except for the Bud TV logo in the corner. I'm not sure why they are not receiving the views that they were supposed to be receiving especially with all the hype surrounding it. Embedding is disabled for Afterworld, but I don't think that's the issue. I think one of the issues could be the pacing and the length of the shows. On average each show is about 3 minutes, where as Prom Queen is two minutes, although we don't know how Prom Queen is doing yet. "What Girls Want" is pushing 7 to 8 minutes! Replaced by a Chimp also adds about a third to its run time by putting their credits on as a post roll. While viewers probably click off at this point, potential viewers could be dissuaded by such a long run time. OR could it be just a critical mass thing? OR could this really be the Long Tail? Afterworld in YouTube terms is still in the top 10 subscribed and viewed. MySpace took a while to take off, maybe Bud TV needs to just keep at it and eventually a "tipping point" will occur? We'll be watching.
Despite buzz about social networks, search engines still outweigh social networks in terms of reach and use
However, niche social networks are useful to reach a particular demographic and most social networks are regularly visited.
Purchasing behavior is somewhat influenced by social networks (this includes Amazon.com and Yahoo! Answers)
Most comments are positive, few are negative, but most people don't comment at all.
Interesting report, but one where our intuition really pointed to, which is before you listen to a marketer, you'd rather listen to a third party with no real vested interest in the product. Further, with a very small amount of people that are actually commenting or rating a product, you're left with a core group of activists that are driving a large percentage of ecommerce. Scary thought. The good news is that most people are fair and actually skewed toward product advocacy. The chart shows that a small amount of people are "Debbie Downers" that is, they just post negative comments. A few levels up are the fair folks, those that post both negative and positive - the "speak your mind" folks. And an even larger number are positive folks. Positive comments only. It appears that many net users follow what your mom used to say "If you don't have anything to nice to say, don't say anything at all." Good news for marketers. The scary part are the Debbie Downers, the makers of iPod's Dirty Secret, the whistleblowers, the Negative Nancys, etc. After all these website filtering mechanisms make it easy to find these negative ratings amongst a sea of positive ones. What to do? Don't ignore them. Don't delete them. Address them. Show your loyal consumers that you have nothing to hide and if it is your mistake, admit your humanity. Through this transparent communication, your product advocates will emerge out of hiding and champion your product against the Debbie Downers out there.
Another interesting point is what they call brand awareness versus actual conversion - Amazon obviously leads in conversion while YouTube does a pretty good job of brand awareness. Kind of obvious because you go to Amazon to research a product while you go to YouTube to view stupid human tricks.
The First Collaborative Commercial Mashable broke a story about the first collaborative TV commercial. For $39 you can buy your own frame of an 8 and a half minute TV commercial. (In PAL at 25 frames per second ourTVad has 12750 frames. PAL is the European standard for broadcast, since this is a Lisbon based site). So far as of this writing they've sold 4 frames. Again, this worked when the guy sold the million dollar home page but I'm not so sure that this will work in video, unless someone buys at least 100 frames. $3900.
I love the warning on the bottom of flickering. I mean come on 25 frames per second and you can buy one frame, of course there will be flickering. If this commercial is ever seen.
Prom Queen So Prom Queen debuted on Monday. If you are not aware of it, it is Michael Eisner (ex-CEO of Disney) venture into the online world via Vuguru his online production company. 90 second episodics professionally produced and sponsored through pre and post roll advertisements. Prom Queen is produced by the same team that put together Sam Has 7 Friends, normally thought of as the harbinger of the online serial short, and the first series produced by Vuguru and hosted on Veoh (Eisner is on their board).
Initially thoughts? Not bad. There's a pre-roll and a post-roll advertisement for Hairspray the movie. That's it. No visible product placements. No visible brands. Content wise? Not bad either. Feels Dan Brownish. Each episode ends on a cliff hanger of some sort that leaves you wanting more. The production quality also gives an eerie "Am I watching TV online?" feel to it that makes Internet time feel like TV time. (Meaning that on TV they can slowly creep into a room but online why don't they just have a jumpcut to the room?) Honestly the 90 seconds goes by pretty quickly and you almost wish that they didn't have this restriction (which is obviously what they want). Each of the characters have their own MySpace page and the forums (while not heavily travelled ... yet) could be an interesting point to determine plot points and other things that the producers could use ... or not use.
In my opinion I think the content executes well. I could see that the series could be highly addictive and like shows like Lost and 24 have fan sites arising and all types of chatter via the message boards and forums. The production quality is superior and rivals that of ABC.com. The one thing I'd like to see is better integration of product sponsors with the content. As we move toward a pay per action world, perhaps that's what we might see. But for a first pass, good job, Michael. We'll be waiting to see who kills the Prom Queen.
DRM Free at Last EMI's announcement today to make their music DRM free may change the entire consumer landscape of music. EMI will sell their new DRM free tracks through Apple's iTunes at an exclusive price of $1.29 (30 cents above the normal track), but they claim to have twice the sound quality of existing tracks. Without DRM (and their CD's do not have DRM), their MP3's will be able to be copied to other players, discs and other forms seamlessly. Will this expand the music business or will it further shrink it?
In my opinion, the removal of DRM from EMI's tracks will actually expand their listening base. Prior users of iTunes who were reluctant to purchase may now purchase more since the tracks can now be played not only on their iPods but on their home stereo systems. They'll be able to share tracks more easily with friends who may be enticed to purchase other tracks by the same artist.
As for the pirates? I think its fairly well known that to get around the DRM you can burn the tracks to a disc and then re-rip them to get rid of the DRM. Pirates that did this before now have to go through one less step. But pirates will always be pirates and even so, pirates will always find a way to crack any type of DRM while true consumers will be the ones that pay the price.
The record labels? The Long Tail is in effect here. Record labels are going to have to find more acts to sign to bring visibility to in order to satisfy their entire spectrum of listeners. They're monopoly is over, its going to be like finding the hidden Microsoft amongst all of the bulletin board stocks out there. Like finding the next lonely girl amongst every YouTube video out there. Like finding the next OK Go amongst every track on iTunes.....
The Second Coming of the Infomerical
By now we've all seen the "Will it Blend?" demos on YouTube. If you haven't, its a series of demonstrations where the CEO of Blendtec, a blender company, blends unlikely items, like iPods, golf balls, a rake, cell phones, and well, you get it. The videos are done in a 60's science show manner and have made the rounds on YouTube. AdWeek reports that these videos have caused a tripling in Blendtec blender sales. (By the way, everything on the show, thus far, has blended.)
The videos are pure genius. They're taking a common household product and giving it the oomph to become viral amongst the YouTube generation. I'll be honest, they are extremely addictive to watch. So for smaller companies out there that want to finally have a low cost commercial out there? Now is the time! The production costs are extremely low, however, for an Internet video to work, it has to be fun, engaging, shocking or all of the above. No more 30 minute Ab Roller infomercials, or Bowflex demonstrations. Nike has one of the most watched videos of all time with a quick clip of soccer great Ronaldinho hitting the goal post 4 times in a row while wearing new Nike sneakers (shocking). Eepybird's duo proved that Diet Coke and Mentos mix well together, which spawned thousands of videos in response (fun). Dove's evolution video exposed the techniques of graphic designers and the modeling process (engaging and shocking).
It's not easy, but online video has opened up another world of infomercial production and a cheaper way to distribute your product's message to the world.
Video Ads More Effective than Images Doubleclick issued a research release about how inline video ads are clicked on more than twice that of banners and images. The report also says that the overall interaction rate is 8 percent! 8 percent! That's a huge number. A number that includes mouseovers, expansions, clicks etc. That number could also be pretty misleading. I've run into a ton of video ads that pop up right when you get to the webpage and you might have "interactions" with it when looking for that hidden "close" button. Unfair you might say. Well, I think that after hearing about this next statistic, which is 0.32 percent press the play button, you'd think otherwise. While this 0.32 percent is double a banner ads click through rate, this is a huge drop off from 8 percent. If the video isn't playing then what? Most likely you're trying to close it, or find the "stop" button. Then Doubleclick says that most videos on average are played 2/3 of the way through. OK, not bad. It could take anywhere from 10-20 seconds to find the close/stop/destroy button. Doubleclick's overall message: Video is twice as effective as Images....
But images aren't really effective. We know that. Whenever we go to a page, we automatically tune out those banners on the top and the skyscrapers along the sides. (Google Adsense speak there.) So what should you do? I've said it once, but I'll say it again, and even Mashable echoes me on this one. Embed your message within your content! A UK boxing promoter is suing YouTube for $1 million. (Rounding error for the Google guys, and a tenth of a percent of what Viacom wants.) The promoter was selling PayPerView subscriptions through his website. But as Mashable states"[the industry] need[s] to adopt a model that provides unlimited syndication, with watermarking and embedded ads, so the business model remains while users still get access to the content. This model would also solve the issue of unauthorized fan footage: rather than keep your version locked up and fight an endless battle to keep cameraphones and video cameras away from sporting events, just offer a higher quality version for free with an ad attached."
People don't want to be sold, but they do want to buy. Advertisements are an opportunity to sell. Embedded content makes them want to buy.
NBC and News Corp's Vaporware By now you've already heard about NBC and News Corp's venture to take on YouTube. The conference call really goes into the details. Not! In summary, they stressed copyright protection with help from their distribution partners (probably a majority of that being MySpace), some paid, but mostly free content, and being the world's largest advertising platform. Doesn't say much does it? Does this product even exist?
On the surface, this new company appears incredible. Copy protection for content creators and a great revenue split (90-10), and a way for distribution platforms to share in getting this content to the consumer. Further from all reports on the advertiser front, something their sales team is saying is making the ads fly off the shelf. But in all of this, the most important piece of the puzzle is being ignored. THE USER. The user is what made YouTube become YouTube. The user has made MySpace the #1 social network in the world. The user was the Person of the Year! And all this talk about advertising? Yesterday I talked about Burger King and how successful it was because the advertising was integrated with the game and in previous posts I'd written about the whole product placement phenomenon. When is big media going to realize that instead of being able to see The Office a few hours after Hawaii gets to see it on my computer screen with commercials, I'd rather TV it, or worse yet, watch the pirated YouTube version with no commercials? Love it or hate it, we have to face the facts. If the user experience is horrible, there will be no more users. Just ask Friendster.