Analysis for 'Predictions'
4 Items Worth Noting for the Dec 14th Week (New pre-roll ad data, Paramount movie clips, Thwapr mobile, next week's preview)Friday, December 18, 2009, 10:02 AM ET|Posted by Will Richmond
Following are 4 items worth noting for the Dec 14th week:
1. New pre-roll data shows format's strength - Though many in the industry still scorn the pre-roll ad, this week 2 ad networks, ScanScout and YuMe, released data showing its continued prevalence as well as innovation that's improving its performance. ScanScout said its "Super Pre-roll" unit, which allows for integrating overlay graphics on the video that viewers can engage with, is driving 350% higher click-through rates compared with typical pre-rolls. In this example for Unilever's Vaseline, note how the creative nicely reinforces the messaging. The enhanced interactivity feels like the start of a new trend; another pre-roll that offers something similar is Innovid's iRoll unit. ScanScout separately announced this week a host of new premium publishers have joined its network.
Meanwhile YuMe released its Video Advertising Metrics Report for Jan-Nov '09, which showed that, at least within YuMe's network, 90%+ of all ads served were pre-rolls, with 30 second spots generating a 1.8% overall click-through rate, a 50% higher rate than the 1.2% that 15 second spots achieved. The volume of 30 second ads also grew 50% faster than 15 second volume in Q3 '09. Kids age 6-14 achieved a 3.7% click-through rate, the highest of any group, which YuMe's Jayant Kadambi told me could be explained by the more engaging nature of child-focused ads (e.g. click to play games, etc.). Jayant believes the sizable amount of existing creative for TV ads that can be easily repurposed for online is a key reason pre-rolls continue to dominate.
2. Paramount clipping site powered by Digitalsmiths is slick - I was impressed with a demo of Paramount Pictures' newly launched ParamountClips.com site that I got this week. The site is only open to Paramount's business partners, allowing them to either choose from an existing stock of clips from over 80 different Paramount movies, or to easily create their own. Desired clips are moved into a shopping cart and released for download, per previously determined licensing terms.
The site is powered by Digitalsmiths, which indexed all of the scenes from the movies using their proprietary recognition process, and then generated meta-data for each, which makes searching a snap. The new self-service site replaces the laborious previous process of a Paramount staffer working with each partner to extract jus the scene they want. As a result, a new highly-scalable licensing opportunity has been created. Paramount is taking advantage of Digitalsmiths VideoSense 2.5 release announced last week that is focused on clip generation, for both on demand and live streams, improved asset management and more integrated reporting.
3. Thwapr launches beta of mobile-to-mobile video sharing - Continuing the buildout of the mobile video ecosystem, Thwapr, a new mobile-to-mobile content sharing platform, launched its beta this week. Duncan Kennedy, Thwapr's COO told me that although there's been a proliferation of video capable smartphones, there's currently no easy, fool-proof way of sharing videos from one device to another (e.g. from an iPhone to a BlackBerry). Enter Thwapr, which lets the user upload videos to Thwapr and then have them shared with their contacts. Thwapr identifies the receiving phone's "user agent" so that it can dynamically decide the optimal format the video should be viewed in. The user simply clicks on a link and the video plays. I can attest that it worked beautifully on my BlackBerry Pearl.
Thwapr's raised about $3 million from angels and has a very strong team, including Duncan and others who worked on Apple's QuickTime. I'm a fan of how video, social/sharing and mobile intersect to create new opportunities, though there are business model unknowns. For now Thwapr is focused on a free ad-supported model, with a particular emphasis on geo-tagging videos to make advertising especially appealing for local merchants. Still, YouTube has illustrated how difficult it is to monetize user-generated content. Thwapr also envisions a business-grade option for real estate, travel, dating type applications which sound promising. I wonder too about whether a freemium model should be explored, though Duncan said Thwapr's analysis suggested this would be a relatively small opportunity. We'll see how things shape up.
4. Next week is 2009 wrap-up week on VideoNuze - Keep an eye on VideoNuze next week, as I'll be summarizing Q4 '09 venture capital investments and deals in the broadband/mobile video space, reviewing my 2009 predictions and looking ahead to what to expect in 2010. It's been an incredibly active year and based on the pre-CES briefings I've been doing, there's lots more to look forward to next year.
Enjoy your weekend!
Thursday, December 11, 2008, 9:59 AM ET|Posted by Will Richmond
Back on December 16, 2007, I offered up 6 predictions for 2008. As the year winds down, it's fair to review them and see how my crystal ball performed. But before I do, a quick editorial note: each day next week I'm going to offer one of five predictions for the broadband video market in 2009. (You may detect the predictions getting increasingly bolder...that's by design to keep you coming back!)
Now a review of my '08 predictions:
1. Advertising business model gains further momentum
I saw '08 as a year in which the broadband ad model continued growing in importance as the paid model remained in the back seat, at least for now. I think that's pretty much been borne out. We've seen countless new video-oriented sites launch in '08. To be sure many of them are now scrambling to stay afloat in the current ad-crunched environment, and there will no doubt be a shakeout among these sites in '09. However, the basic premise, that users mainly expect free video, and that this is the way to grow adoption, is mostly conventional wisdom now.
The exception on the paid front continues to be iTunes, which announced in October that it has sold 200 million TV episode downloads to date. At $1.99 apiece, that would imply iTunes TV program downloads exceed all ad-supported video sites to date. The problem of course is once you get past iTunes things fall off quickly. Other entrants like Xbox Live, Amazon and Netflix are all making progress with paid approaches, but still the market is held back by at least 3 challenges: lack of mass broadband-to-the-TV connectivity, a robust incumbent DVD model, and limited online delivery rights. That means advertising is likely to dominate again in '09.
2. Brand marketers jump on broadband bandwagon
I expected that '08 would see more brands pursue direct-to-consumer broadband-centric campaigns. Sure enough, the year brought a variety of initiatives from a diverse range of companies like Shell, Nike, Ritz-Carlton, Lifestyles Condoms, Hellman's and many others.
What I didn't foresee was the more important emphasis that many brands would place on user-generated video contests. In '08 there were such contests from Baby Ruth, Dove, McDonald's, Klondike and many others. Coming up in early '09 is Doritos' splashy $1 million UGV Super Bowl contest, certain to put even more emphasis on these contests. I see no letup in '09.
3. Beijing Summer Olympics are a broadband blowout
I was very bullish on the opportunity for the '08 Summer Games to redefine how broadband coverage can add value to live sporting events. Anyone who experienced any of the Olympics online can certainly attest to the convenience broadband enabled (especially given the huge time zone difference to the U.S.), but without sacrificing any video quality. The staggering numbers certainly attested to their popularity.
Still, some analysts were chagrined by how little revenue the Olympics likely brought in for NBC. While I'm always in favor of optimizing revenues, I tried to take the longer view as I wrote here and here. The Olympics were a breakthrough technical and operational accomplishment which exposed millions of users to broadband's benefits. For now, that's sufficient reward.
4. 2008 is the "Year of the broadband presidential election"
With the '08 election already in full swing last December (remember the heated primaries?), broadband was already making its presence known. It only continued as the year and the election drama wore on. As I recently summarized, broadband was felt in many ways in this election cycle. President-elect Obama seems committed to continuing broadband's role with his weekly YouTube updates and behind-the-scenes clips. Still, as important as video was in the election, more important was the Internet's social media capabilities being harnessed for organizing and fundraising. Obama has set a high bar for future candidates to meet.
5. WGA Strike fuels broadband video proliferation
Here's one I overstated. Last December, I thought the WGA strike would accelerate interest in broadband as an alternative to traditional outlets. While it's fair to include initiatives like Joss Wheedon's Dr. Horrible and Strike.TV as directly resulting from the strike, the reality is that I believe there was very little embrace of broadband that can be traced directly to the strike (if I'm missing something here, please correct me). To be sure, lots of talent is dipping its toes into the broadband waters, but I think that's more attributable to the larger climate of interest, not the WGA strike specifically.
6. Broadband consumption remains on computers, but HD delivery proliferates
I suggested that "99.9% of users who start the year watching broadband video on their computers will end the year no closer to watching broadband video on their TVs." My guess is that's turned out to be right. If you totaled up all the Rokus, AppleTVs, Vudus, Xbox's accessing video and other broadband-to-the-TV devices, that would equal less than .1% of the 147 million U.S. Internet users who comScore says watched video online in October.
However, there are some positive signs of progress for '09. I've been particularly bullish on Netflix's recent moves (particularly with Xbox) and expect some other good efforts coming as well. It's unlikely that '09 will end with even 5% of the addressable broadband universe watching on their TVs, but even that would be a good start.
Meanwhile, HD had a banner year. Everyone from iTunes to Hulu to Xbox to many others embraced online HD delivery. As I mentioned here, there are times when I really do catch myself saying, "it's hard to believe this level of video quality is now available online." For sure HD will be more widely embraced in '09 and quality will get even better.
OK, that's it for '08. On Monday the focus turns to what to expect in '09.
What do you think? Post a comment now.
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