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The State of Online Video: Getting Paid for Content
Ashkan Karbasfrooshan Jan 11, 2010 This guest post is written by Ashkan Karbasfrooshan, the founder and CEO of WatchMojo, a leading producer of premium, informative and entertaining video content. The company’s catalog of 5,000 videos has generated over 105,000,000 streams since 2006. Today, WatchMojo streams nearly 10 million videos each month and reaches 20,000,000 consumers online and offline. Party like it’s 1999? Online video is where search was in 1999: a major part of the digital media ecosystem is desperately looking for a business model and a leading ad format. We know what happened in search, while the early leaders ditched search-as-a-business for portaldom, Google stayed the course and built a $200 billion company. Search captures intent, video captures interest. Intent offers advertisers a short-term benefit, interest a more long-term value. Perhaps that is why it is taking longer for online video revenues are materialize in a major way. Yet, over the past year, online video consumption has soared threefold and it appears that this might be the year that the medium grows up and sees its revenues take off too (fingers crossed). This explains why in boardrooms large and small, everyone is trying to crystallize their online video strategy. Old media and video: Those who can won’t, those who want can’t When it comes to traditional media companies and online video: those who can won’t, those who want can’t. Print media would love to ramp up video efforts, but they can’t because it’s not a natural part of their DNA, operations or culture. Conversely, while television media companies can transition online, they won’t because it cannibalizes their larger offline revenue streams. To TV executives, online video is what the Web was to print media a decade ago: those who embraced it didn’t fare that well; those who shunned it died. Lost in time Last year marked the first drop in online advertising revenues since 2002: a 4.2% decline according to eMarketer. Combined with the economic meltdown, media executives had the knee-jerk reaction to knee-cap free, ad-supported content in favor of subscriptions. Two years ago, the Wall Street Journal was considering going totally free. Now suddenly everyone wants to erect pay walls. Problem is by the time these tactics are implemented, advertising will return faster than ever and old media will once again find itself on the wrong side of the equation. The main difference between now and then In 2000, when the Nasdaq crashed, it dried up the advertising money that venture-backed startups were spending online. Traditional marketers had yet to really experiment with online advertising. Today, as marketers start increasing advertising spending again, they are shifting more money to online at the expense of traditional media: Pepsi will shun Super Bowl advertising in favor of social media.
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Social media and UGC changes things, sort of Social media has changed the rules of engagement in news and publishing. But when it comes to ad-supported models, marketers will never feel 100% comfortable advertising alongside usergenerated content. This is why professional content remains the key ingredient to capturing those advertising dollars. Where video and text diverge Unlike articles, you can’t fool audiences as easily with videos. It’s easier to get away with a slapdash article than with a slapdash video. Thus, most of the existing online video content relies on “talking head” footage and Q&A formats which are relatively simple to produce. Most of the videos that pass for professionally produced videos should be articles. No wonder marketers remain hesitant to underwrite the genre. Fiction vs. Non Fiction Even non-fiction video content needs to be demonstrative (vs. descriptive). Meanwhile, chasing hits with fiction remains too speculative; the risk/reward benefit makes it prohibitive online. Producers who understand this will have an edge over time as budgets shift to video. Premium vs. Super premium Naturally, not all online video content is created or valued equally. Traditional media companies produce super premium content. Web producers try to create premium content. However, both are professional. While marketers will pay more for super premium content (which explains why Hulu commands a large premium in ad rates over the industry standard), online audiences tend to favor Web content whose format and style is more in tune with their more fickle tastes. As such, those who mold their Web content offerings by mapping out super premium catalogs will also create more valuable libraries. While you cannot match production values, you should offer marketers the same value proposition, adjusted for the ROI that advertisers have come to expect from digital media. The branded content hype Branded content holds much promise. But it might be myopic to think that audiences will remain engaged with marketing videos disguised as entertainment. Advertorials in print media have long been a part of the magazine experience, but audiences have learned to bypass them. Over time, the content itself filters audiences for advertisers. Advertising cannot fully replace or become the content outright. But producers who tastefully weave commerce into content will win. Ultimately, the Field of Dreams approach might be more realistic: create content that you are passionate about and people want to watch, build an audience and then monetize it. We all want advertisers to pay for content before it’s green lit, but that doesn’t mean it will happen. Licensing vs. Ad-supported Of course, getting paid for content is ideal. But consumers will never pay for it online, so find other media companies who will. To be able to become a supplier of content to other media companies and maintain the Field of Dreams philosophy, producers need to balance a) quantity, b) quality, c) frequency and d) consistency. Getting paid for content by other companies is especially important with video content because even large media businesses are having trouble generating meaningful video advertising revenues. Finally, to position for the day when video advertising becomes material, producers need to consider e) timeliness. Returning to the search parallel, what good did market share do in 1999 when queries weren’t being monetized? Creating so-called evergreen content gives one’s catalog a longer shelf life, which in turn protects against the short-term weakness in revenues and the longterm “build vs. buy” dilemma that old media (and eventual M&A acquirers) need to go through. Even if you don’t take advice, learn from it But that’s not enough. Companies will pay a supplier if they also offer f) variety. About.com founder Scott Kurnit once gave me the best advice I didn’t fully heed. He cautioned me against covering too many categories. I didn’t take his advice, but made sure that if we did want to offer clients variety, then each category’s clips should be as good as what any best-of-breed producer offers. Today, I think we do that. As we mark WatchMojo’s four-year anniversary and celebrate crossing the

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100,000,000 cumulative video stream mark, we’ve learned that sometimes, you really have to go against the institutional imperative and find your own path in order to survive. CrunchBase Information Ashkan Karbasfrooshan WatchMojo.com Information provided by CrunchBase
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http://www.dailypatricia.com Patricia I would disagree. There was just a big study that came out from Nielsens that said a really big number of people were willing to pay for content online. Many people already are. Historically over platforms, subscription content is actually user driven — it exists because users want better access, info, etc. (or whatever they deem valuable). It won’t likely be different with the internet. Advertising-only models have worked in the content business over other platforms but not particularly well, as it costs money to create good content, get the right access to things, resources, etc. — it’s not likely that advertising will ever be enough online for content because it hasn’t traditionally in the past, and that’s why subscription content exists to begin with. The way TV is handling its disruption, i don’t think there’ll be much opportunity for online video but we’ll see. Signs point to just as much no as yes. http://www.AskDanAndJennifer.com Dan | Ask Dan & Jennifer “we’ve learned that sometimes, you really have to go against the institutional imperative and find your own path in order to survive.” Great points Ashkan, particularly this quote. Our show Ask Dan & Jennifer recently passed the 40

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Context is King: How Videos Are Found And Consumed Online
Guest Author Jan 30, 2010
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Editor’s note: This is the third in a series of posts by guest writer Ashkan Karbasfrooshan. Previously, he wrote about the State of Online Video, and 12 Surprising Things Holding Back Online Video Advertising. In part 3 today, he examines how videos are found and consumed online. Karbasfrooshan is the founder and CEO of WatchMojo , a producer of premium, informative and entertaining video content. The company’s catalog of 5,000 videos has generated over 110 million streams since 2006. To try to understand—let alone guess—the future of video advertising, one needs to start by looking at the biggest trend in media over the past few decades. In November 2006, Bear Stearns Cable and Satellite analyst Spencer Wang published a study called “Why Aggregation & Context and Not (Necessarily) Content are King in Entertainment”. While Bear Stearns has since been acquired by JP Morgan and is now a mere footnote in business books, the study’s findings are more relevant than ever. Let’s examine 8 key factors behind online video consumption Factor 1: Media is Fragmenting

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According to a recent NY Times article, in the 1952-53 season, more than 30% of American households watched NBC during prime time, according to Nielsen. In fact, up until twenty years ago, you could buy a 30-second spot on CBS, NBC or ABC and reach “everyone.” Today, NBC’s prime time reach is 5%. Sure, NBC is lagging CBS and ABC, but neither the Tiffany network nor Disney’s counterpart is faring much better. The secret’s out: fewer people watch TV and teenagers spend every waking minute connected to the Internet, increasingly through the mobile web. Factor 2: Deportalization is Here to Stay As the media world becomes fragmented and consumers move online, the Web is following a similar path, known as deportalization: the move away from the dominant portals of old, as social networks gain huge followings and vertical niche sites gain smaller, but more loyal, followings. Ten years ago, you could buy a banner on MSN, AOL or Yahoo and reach “everyone” on the Web. Five years ago, you could get the same result by buying a text link through AdWords and reach consumers who were either searching directly on Google.com, or surfing on the countless number of websites that were part of Google’s publisher network through AdSense.

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Suffice to say, times have changed. In fact, less and less often do consumers even seek out content by actually going to a given site. To paraphrase Jeff Jarvis, if something is important, it will find me, be it via newsletter, Facebook, Twitter or a shared link in an email. In fact, Facebook might very well be the last giant Web property and when it launched Facebook Connect, it too began to extend its tentacles across the Web. Twitter’s growth has maintained thanks to its offsite (API) growth, while YouTube exploded due to its open embeddable nature from the get-go. However, after YouTube sold to Google for $1.65 billion and the site’s aggregate traffic soared, some video producers tried to find a way to generate an audience—and revenues—outside of YouTube in order to build a legitimate business. In other words, media is becoming fragmented, the Web is becoming deportalized, and the front line of it all is online video. Factor 3: Content is Not a Zero-Sum Game If we return for a second to television, it’s worth noting that with the advent of cable television, as the number of channels rose, so did overall content consumption.

Analogously, as the number of content producers and distribution points increases online, consumption increases exponentially. For proof, look no further than the recent comScore figures touting over 31 billion videos were viewed in November 2009. Factor 4: Content is King? Indeed, to paraphrase Viacom’s Chairman Sumner Redstone: content becomes more important than distribution mechanisms; as new channels of distribution creep up, it is the content that is always going to be necessary, hence the adage “content is king”. If you fast forward to 2010, it’s true that with all of these social media aggregation and distribution tools, you are seeing media rise to the surface. No one, after all, cares about the pipes; it’s what flows through the pipes that matters. The context—Facebook, Twitter, email—in which people are introduced to media and

consume it is becoming more important than the content itself. Content is no longer king, context is. Factor 5: Demand for Content is Elastic, Supply of Funds is Not The problem, as you can imagine, is that while it’s perfectly plausible for global advertising to grow, it will not grow fast enough to feed all of the mouths at the creative table. As “consumer touch points” increase, the number of people that each piece of content reaches becomes smaller at the time of publishing/broadcast but can grow over time. That’s the theory, anyway. This is a double-whammy trend. It is negative because the audience for something (and corresponding revenue) will be less than what the most popular event on television will be, which partially explains the cachet television still has over its online brethren. But it is also a positive trend in that as a content owner you will be able to derive more revenue over the course of the content’s shelf life. Don’t get me wrong, syndication on television is an enormous revenue stream, but that is not an option for all programming, whereas online, technically, anything has both a shot at building an audience and having some kind of residual revenue stream. The problem is that there is no vetting process per se online so the lowest common denominator can be zero. Factor 6: Chasing Hits Has Proven Futile Ultimately, overall consumption of media will increase but hits become less frequent and each hit will become more niche. The stats support this hypothesis, despite YouTube’s aggregate size and macro-level success, each clip’s average viewership shows that regardless of whether the video is user-generated, premium or super-premium (for a definition of the differences click here), on average: It will garner 500 views over time 25% of those views will come in the first four days and by and large, only the first 30 to 60 seconds will be watched. How can you build a business on that?

Factor 7: Discovery vs. Recovery Exasperating matters is how content is actually unearthed. To borrow from John Battelle’s breakdown of search: videos are found via recovery and discovery. Statistics show that: 45% of views come from direct navigation where a user goes to YouTube and searches to “recover” something they have already seen or are actively looking for. Of course, YouTube is the world’s second largest search engine and most of those searches are now conducted on YouTube.com, which reinforces the argument that YouTube is now the best Internet M&A of all time. The other 55% of the time, users stumble upon a video and “discover” it. That is right, over half of the time, users land on something randomly.

In other words, while traditional media views the web as a place where pirates turn to to rip off their copyright, the truth is, only half of all of the content consumed is actually searched for, the other half is stumbled upon, meaning you actually have to distribute it widely enough to increase the likelihood that people even notice it, let alone give a damn!

This is why you need both lots of content and a diversity of it. Indeed, Time.com former Managing Editor Josh Tyrangiel admitted that “long form journalism, a staple of magazines like Time, is not working” online. The same applies to long form video online, and by extension, on mobile. Factor 8: Size Matters So what works? To gain more insight into that (and to avoid an overly biased outlook), I reached out to Dina Kaplan, who is the COO of blip.tv. (We use blip.tv’s video player on our web property). According to Kaplan, a Pyramid of Content is emerging on the Web. I tend to agree. Back in February 2007, I wrote an article called “The Commoditization of Distribution and the Scalability of Content”. In it, I alluded to a rudimentary pyramid with super premium on top, premium in the middle and UGC at the bottom:

It’s certainly not rocket science, and Kaplan and I are not alone in having that view. She continues: “Hulu is the best-known platform sitting at the top of the pyramid, in terms of hosting and distributing network content. YouTube, which has long been known for hosting great viral and oneoff videos, has owned the bottom of the pyramid.” The question remains: who will own the middle. A couple of years ago, YouTube made a move towards “torso content”. Kaplan’s blip.tv is obviously making a play for the middle, “blip.tv [wants to own] the middle of the content pyramid: the best original shows produced for the Web. These shows are produced by talented individuals and production companies who are building up loyal audiences for their shows, just as the producers of a traditional TV show would.” With things like Apple launching the iPad and IPTV gathering steam, Kaplan is confident that “shows will move around from screen to screen and you’ll choose to watch content on whatever screen is most convenient for you at that moment.” Of course, with Boxee’s struggles to get traditional media on-board, one wonders if new media producers have a golden opportunity to win traditional ad dollars, which dwarf new media dollars by a wide margin. For all the talk and excitement about online advertising and online video advertising, TV advertising in the US remains a $75 billion industry.

When you realize the dichotomy between the existing business that is Television and the potential that might be Online Video, you realize why the stakes are so high. Come back next week when we update our Pyramid of Content to reflect the reality of 2010 and look at how videos will be monetized online. Also read: Part 1: State of Online Video Part 2: 12 Surprising Things Holding Back Online Video Advertising Next Week – Part 4: How Will Videos Be Monetized
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http://www.howtou.net Ashish This is what we understood long back. Typically people don’t search for specific videos, mostly they are referred by those who found it earlier and share with their friends. I don’t think SEO optimization will do the trick here. As the community grows people will prefer watching videos based on their own community (liking) rather than searching in a huge archives of dissimilar interest. My Locator ® context = niche = channel = location, location, location

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12 Surprising Things Holding Back Online Video Advertising
Guest Author Jan 16, 2010 Editor’s note: Earlier this week, guest writer Ashkan Karbasfrooshan wrote a post about the state of online video. In this post he follows up with some thoughts on what’s holding back this budding industry. Karbasfrooshan is the founder and CEO of WatchMojo, a leading producer of premium, informative and entertaining video content. The company’s catalog of 5,000 videos has generated over 100 million streams since 2006. Photo credit: Flickr/Paraflyer. After four years in the online video business, one thing is clear: if you produce high quality content and build sufficient distribution across a large enough number of consumer touch points, you can generate more than enough revenue from multiple sources and platforms to build a profitable, stand-alone business. But no one said it would be quick or easy. Building distribution isn’t obvious and most producers fail to build any meaningful reach, but if you can hatch an editorial direction and business strategy that can attract an audience, over time you will be able to create a real business around it. But keep in mind the surprises below. Surprise #1: Lack of Definitions and Standards After All of These Years Steven Spielberg was trying to transition online with Pop.com in the 1990s and, until his resignation last week, Real Networks’ Rob Glaser has been “at this” for 16 years since 1994 . Yet to this day, in online video, we still don’t speak a common language. Heck, we’re not even on the same planet. The first thing you realize about video advertising is that most of the money being generated from video content isn’t derived from in-stream advertising (such as pre-,mid-, or post-roll) but rather by in-banner ads (be they standard display ads or rich media). Yet when you look at the projections being forecast by eMarketer and Forrester, they focus mainly on videos sold inside the video player. Meanwhile, as online video consumption continues to soar, it is clear that the share of total advertising for video content is going to be much larger than the projections suggest. YouTube, for example, sells pre-roll ads on an infinitely small percentage of its videos. They generate the lion’s share via display banners. Personally, I think that while display banners aren’t worth much in articles because a reader scrolls down quickly past them, next to video content they are worth a lot more. But with so much video being consumed on third-party sites, how can producers stay in business, let alone thrive? One answer, of course, is branded content, which remains unproven at best, and the latest fad at worst. Surprise #2: The Myth That Branded Content Is a New Thing Branded content can be many things. It is ultimately the blurring of church and state, or information and advertising. Examples are numerous and include: Soap operas, which were funded initially by Procter & Gamble
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That ubiquitous Coca Cola cup on American Idol A web series about a couple trying to conceive sponsored by a home pregnancy test How-to videos featuring products, such as the use of a particular vodka or gin in a how-to-makea-martini video. Whereas publishers have always relied in part on advertiser support, branded content tends to be fully supported by a marketer. With the so-called death of the 30-second spot and the short-form nature of online video entertainment, the appeal of branded content is growing among video producers desperate to make a buck. Problem is if a producer waits for the green light from a marketer to produce content that bakes in advertising, they just won’t scale their libraries, which means they won’t grow overall streams. Also, it begs the question: does branded content fall into video advertising or sponsorship? That detail isn’t clear yet. But with so many competitors vying in the genre, it’s worth questioning how important it will be over the long term and if audiences will accept it. What looks like the light at the end of the tunnel for many struggling online video producers could turn out to be an oncoming train. Surprise #3: It Takes A Different Playbook The biggest difference with regards to monetizing videos as opposed to articles is that it requires a “distribution-over-destination” strategy. When Quincy Smith took over as CEO of CBS Interactive, he said that the Tiffany network’s Innertube project should have been renamed “CBS.com/NoOneComesHere.” No wonder then that the first video content companies went out of business—because they sought to build “owned-and-operated” properties. This strategy might work with text content but is nearly impossible with videos. Search engines don’t pick up video content well. Hosting videos is expensive. Plus, audiences who read a business article don’t automatically watch business videos (and so on). Looking at the leading video destinations, you quickly realize that they are all basically aggregators or traditional media companies who still reasonably view online video with suspicion and fear. Surprise #4: Video Consumption Patterns Are Whack From our experiences, we see that audiences (readers, listeners, viewers) consume content by type (video vs. articles vs. podcasts) and not categories (auto, business, fashion, etc). And when it comes to videos, some categories are much more popular than others, which lead to unreachable expectations for marketers. According to TubeMogul, 25% of views come in the first four days after a video is published and, over time, the average YouTube video is seen 500 times. Articles are the opposite: search engines tend to drive people to older articles. This is alarming. In order to win, it is imperative to grow video views over time and generate exponentially more video views than the average. Surprise #5: Just Because You Build an Audience, Doesn’t Mean The Advertisers Will Come Knocking There are three main ways to build an audience: the old way and the new ways. 1. The first is a retail approach where viewers watch your videos on your site and your network channels. This is historically how publishers have built audiences. 2. The second is through wholesale partnerships, which are facilitated by MRSS. (RSS – or Real Simple Syndication – has change the way users consume content and publishers ingest and distribute content Analogously, MRSS – or simply Media RSS – was designed in 2004 by Yahoo! and the Media RSS community. Unbelievably, it has made distributing videos even easier than syndicating text content). 3. The third is through social media: be it bloggers and/or social media referrers on Facebook, Twitter and the countless other outlets. YouTube pioneered the embedding and viral distribution of video. It is certainly true that bloggers are the new “newspaper editors” who can make or break a producer. Similarly, the same way that MySpace helped build YouTube’s success at the macro level, social media referrers will help a video take off on the micro level. Between MRSS simplifying distribution and video’s embeddable nature, syndication exploded . . . but revenues didn’t. But don’t worry. Over time, marketers follow the audience, they always will. Surprise #6: When It Comes to Sales, Sell Your Audience, Not Your Videos Historically, publishers sell ads by audience. But with online video and the lure of branded content,

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some have developed a tendency to pitch individual videos or a series of videos to advertisers. Publishers don’t sell by individual articles, so why should they think that they should sell by individual videos, especially when you consider the widespread nature of videos and where they ultimately end up. Nonetheless, I see way too many producers sell videos over audience, and then when they fail to generate any meaningful distribution, the marketer gets disappointed, blaming the strategy over the tactic. You have to create audiences for your content. It can be one audience or it can be many. With a magazine, you can take any one article and project the demographic of that one piece to the whole publication. With videos, due to their embeddable nature, each video can have its own audience profile and as such can embody the demographic of the site that embeds or distributes the video. So videos have the potential to reach a broader demographic than content locked into one site. Regardless, until videos generate more revenue from in-stream ads than in-banner ones, videos’ embedding nature remains a double-edged sword. For a producer to distribute through third party distributors, it means: 1. less recognition of your reach initially. This hurts producers in the short term, but over time, services such as comScore and Nielsen will catch up and offer something while startups like TubeMogul seek to establish the best practices. More importantly, agencies recognize this phenomenon and will let you build your case. 2. less control of the ad inventory, which can be seen as a negative or a positive. Ultimately, as a producer, you have to position this as a plus because you can offer advertisers more reach and share of voice across a larger segment of the online video universe. But, it takes time, especially with a lack of data to support your reach. Surprise #7: The Myth and Danger of the Viral Video Too many clients get enamored with the idea of green lighting a viral video. You might as well just flush your money down the toilet instead of approving such a campaign. It is impossible to actually plan for this and if the ad agency you hired is guaranteeing video views, then fire that ad agency yesterday! But by the same token, who cares if a video generated a million views last month. If an advertiser runs banners next to that video next month and the video fizzles away, it’s moot. This is why it is more important to publish and syndicate videos that over time can generate incremental and sustainable views. This makes the real estate before and next to the video more valuable. Surprise #8: With Advertisers Sitting on the Sidelines, Partnerships Need to Make Sense for Producers Historically, advertisers seek revenue-share deals with publishers to mitigate risks. With video, advertisers have sat out the dance, so the commercial nature boils down to producer/publishers and distributors, who in turn seek revenue share deals with producer/publishers. Problem? Most can’t generate any sales, so producer/publishers don’t get any revenue out of the deals. So my advice is to seek revenue guarantees until advertisers really embrace video advertising. By and large, most revenue share deals flop because: Media companies have great sales teams, but they are only warming up to online video. So while they might be starting to generate revenue from online video, it is immaterial to their operations. Most of these traditional media companies are not producing or publishing enough online, so they are turning to new media producers like us. However, even though they have great sales organizations, they lack volume to make a dent. A lot of the video views are coming from video social networks, but most of them are just not set up to sell ads. They are technology companies operating in the media space, not media companies that understand advertising. Often times their VCs bring in experienced sales executives but have very unrealistic expectations. They also have not yet mastered shifting large portions of their audiences from non-sellable user-generated or pirated material to professional content. It has been stated that YouTube, for example, only sells ads next to 15% of their total streams. However, social media and user generated content has increased pageviews and ad impressions greatly on these sites. Across the web, there is a chance the equilibrium is broken for good. As a result, CPMs are dirt poor and sell-through rates are abysmal. This adds to the challenge and forces a producer to take over the sales process which, while expensive, should ultimately be the end-goal. Surprise #9: Don’t Chase Hits Chasing hits is perhaps the most surefire way to kill your business. We adopted the Field of Dreams

content strategy: creating content we’re passionate about and/or think audiences will watch, build an audience around it, and only worry about monetizing it afterwards. It’s not ideal, but the reality is that what works online is very much random. When we look at our most popular videos, we are flabbergasted! This is why online video is such a challenge to TV companies, because they cannot program a show in a time slot and force it down audiences’ throats. Surprise #10: YouTube is More Open than Challengers What kind of online video article would be complete without an observation on the leader in the space: YouTube. While far from perfect, YouTube has actually been fairly friendly with producers by allowing them to sell ads around their content. Surprisingly, this is an “open” strategy. Usually, open strategies are adopted by challengers, not dominant market leaders. You would think that Daily Motion, Veoh and others would allow for this, but they don’t. This hurts their standing and importance in the space. Time will tell if they change their policies and follow the market leader YouTube. Surprise #11: Everything Won’t Be Ad-Supported To quote Ty Ahmad-Taylor, it’s true that in theory “if you make television shows, films or music, your business is actually the audience business. In practice, however, right now there aren’t enough ad dollars to support the “audience” business. So let’s leave the theory for academics. Those in the trenches will tell you it’s about survival, and judging by the past year… it is still about surviving more so than thriving. After we got disappointed by weak revenues in our earliest syndication deals, we held back distribution and began to pursue licensing deals. Licensing can generate insanely high eCPMs for a producer, but most producers don’t have the kind of libraries that can command guaranteed and recurring licensing fees. So your best bet to keep the lights on is to command licensing revenues in the short term while you position yourself for syndication revenue over the long term. By doing that, you will in turn build a large enough library to command the richer branded content deals that will push you over the top. Surprise #12: Search and Video are Still Miles Apart Ultimately, video is where search was in 1999: a major part of the online ecosystem is still looking for a business model. But history repeats itself and without a doubt video streams will be monetized just as search queries were. But differences shall remain, with the two leading ones being: 1. Expectations: Google saw over a dozen search companies precede it, most of them had gone out of business, sold or exited search for portaldom. By the time the Nasdaq crashed, Google had an open field with practically no competitors. Video is the exact opposite: even though only YouTube has had a gargantuan exit, VCs have continued to pour hundreds of millions of dollars into so-called YouTube clones (Veoh, Daily Motion, Metacafe) as well as enablers (CDNs and content management systems) and advertising networks (Tremor, Broadband, Yume, Scanscout). It seems as if everyone is looking for the Google of video, even though for all intents and purposes, Google will be the Google of video thanks to its acquisition of YouTube. 2. Short term vs. long term nature of the payoff. Search is largely a performance kind of medium, whereas video is a branding one. While search captures intent, video captures interest. Both are valuable, but in a very different way. We’re still early in the development of the online video business, but we are starting to figure it out. CrunchBase Information Ashkan Karbasfrooshan WatchMojo.com Information provided by CrunchBase
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http://www.dumblittleblogger.blogspot.com Vishal Sanjay Video advertising is gaining popularity, but the only thing thats holding it back is the lack of funding, but in the mean while I feel interactive ads are going ahead. http://www.dumblittleblogger.com/ facebooker +1 the elephant picture :) http://chenboyu.com Bryan what you are talking about here, is actually quite hard to justify, ad channel has never been easy, but think this way, create your own ad channel, instead of relying on others. http://www.blazestreaming.com Joe Christensen Any hope for a standard video ad format in the near future? http://SmashinGeeks.com SmashinGeeks Google will be launching Video Ads in Adsense exploring. So , now bloggers can also show video ads for making bugs. http://SNETSTUDIOS.COM SNETSTUDIOS.COM Great article. Cut and print. http://www.bestcheapwebhostingdeals.com/cheap-web-hosting/12-surprising-things-holding-backonline-video-advertising-techcrunch 12 Surprising Things Holding Back Online Video Advertising – TechCrunch | Best Cheap Web Hosting Deals [...] Post By Google News Click Here For The Entire Article Cheap Web Hosting- Share and [...] Confused “Meanwhile, as online video consumption continues to soar, it is clear that the share of total advertising for video content is going to be much larger than the projections suggest. YouTube, for example, sells pre-roll ads on an infinitely small percentage of its videos. They generate the lion’s share via display banners.” The article you linked to support this claim is from 2008, but YouTube didn’t even start showing preroll ads until the middle of 2009. Kat Someday, advertisers will be able to tell what’s going on in video, and advertise accordingly. A

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