Analysis for 'MLB'
Thursday, February 4, 2010, 9:07 AM ET|Posted by Will Richmond
FreeWheel is on a roll, now serving almost 2 billion video ads/month, doubling its volume just since November, 2009. In addition, the company has added Major League Baseball Advanced Media to its customer roster and began implementing ads during the fall playoff season. The MLB win comes on top of recently announced customers Turner Broadcasting System and VEVO. FreeWheel's co-CEO/co-founder Doug Knopper brought me up to speed on all the news late last week.
Doug said that part of the increase in FreeWheel's volume is attributable to the additional customers that have come on board, but he's also very excited about the year-over-year growth in ad volume FreeWheel is seeing for longer-term customers ("same store sales" if you will). FreeWheel is seeing big increases due to 3 factors: customers posting greater quantities of video, plus deepening viewership of that video (all of this borne out by comScore's '09 video consumption data); customers' improving ability to actually sell ads against these videos (reflecting the shift of budgets to the online video medium); and reduced friction through the emergence of "accepted practices" in ad operations.
FreeWheel is also benefiting from its specialization in helping content providers monetize their video on third-party sites (e.g. YouTube, AOL, MSN, Fancast, etc.). More and more content executives are realizing that sizable viewership opportunities exist by syndicating their video outside of their own properties. Doug said that every content company FreeWheel is now talking to is interested in some kind of syndication.
Doug described 3 types of syndication he's seeing: (1) across a family of sister corporate sites, such as PGA.com providing CNN.com video, which are both owned by Turner; (2) between affiliated entities like local MLB teams providing video to the main MLB.com hub and (3) externally, to unaffiliated 3rd parties, such as WMG music providing videos to YouTube. Given all this syndication activity, I was interested to learn from Doug what percentage of the ads FreeWheel serves fall into each of these 3 buckets vs. what percentage are served on the customer's sites themselves. Doug said that FreeWheel is pulling those numbers together in a way that ensures its customers privacy and will get back to me when he has them.
In addition to the above syndication activity, FreeWheel is seeing experimentation with delivering ads to mobile devices, convergence/CE players and Internet-enabled TVs. In all these cases, customized ad policies determine who sells what ad inventory and how revenue is shared and reported. Powering all of this has been part of FreeWheel's core mission from inception, making it a key player in what I've called the 'syndicated video economy."
FreeWheel's growth echoes what I've been hearing lately from both video ad network executives and video content providers. They too are talking about rapidly rising volumes and improving monetization. As I wrote recently, I've been impressed lately by efforts to make video ads more engaging and provide a better ROI, a trend I see continuing. Taken together, while it's still relatively early days, online video advertising seems to be making great strides.
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