Happy Monday, folks.
In today’s VideoDaily Roundup, we’ll start off by asking why minorities watch more online video. Next we have one columnist's rant against the poor state of Web video content, and how to change it. Our third story highlights two marketers who claim to be shifting a portion of their TV budgets to Web video. After that, analysts talk up Netflix's prospects for the rest of the year ahead of its Q1 earnings report. Finally, we have one CNET editor's lament on repurposed, 30-second pre-roll ads. Enjoy!
Minority Targeted Shows Thrive on YouTube
Minorities are increasingly looking to Web video to find content that is relevant to them, The Washington Post reports. Of the 20 most-subscribed-to channels on YouTube, eight feature minorities; most of these feature Asian-Americans, but many more black and Latino shows make up YouTube's top 50. While the Google site doesn’t reveal how much minority video producers earn, it says hundreds of them make at least six figures or more, annually.
According to the Pew Internet & American Life Project, nearly 80 percent of minorities regularly watch online video, compared with less than 70 percent of whites. Analysts say the trend makes sense: minorities might feel neglected by mainstream television, which mostly features white stars, whereas Web video can target more niche audiences and thrive on smaller production budgets. As the IAB's Seneca Mudd says, advertisers would ignore this trend at their own peril.
Talent Investment the Key to Making Web Video Better
Web videos largely “suck,” Jordan Kurzweil laments in a column for TechCrunch -- mostly because they have been unable to build large, steady audiences that keep coming back for more. Kurzweil offers a three-step plan for online video success: promotion, great content and product (making it easy for audiences to come back for more). Of course, the hardest of these to achieve is great content, which he says the industry has failed to produce.
There are many reasons for this -- but the answer, according to Kurzweil, is investing in talent. However, getting the most talented people to produce great content will require that they be paid like television, production and studio executives -- something that may not happen until Web video amasses the kind of audience and the universal metrics that have made television the go-to medium for brand advertisers.
Oh, and speaking of advertisers, “keep the advertisers out of [the project] until it’s done and ready for them,” Kurzweil says. “Consensus is no way to produce anything actually creative.”
Amid Declines in TV Viewership, Marketers Redirect TV Spending to Video
Some marketers are indeed migrating spend away from TV and into online channels. According to a new Wall Street Journal article, Samsung plans to redirect 30% of its TV upfront budget into online media, while GM plans to increase its digital spending by 3-5 percent, with most of the money coming from print and TV.
As the article points out, fewer people on average have been watching television this season: according to Nielsen, 60.1 million people watched broadcast or cable TV at any given moment of the day between Sept. 19, 2011 and March 25, 2012 -- down 2.8 percent from last year. Sharper declines were reported among younger viewers. According to comScore, more than 100 million Americans watched an online video on an average day last year -- up 43 percent from the year before.
Ahead of Q1 Results, Analysts Mixed on Netflix
Netflix, which reports first-quarter earnings today, is expected to post a gain of 1.73 million new online subscribers in the U.S. since December -- or a total of 23.4 million -- after the market closes. However, as some analysts tell Bloomberg BusinessWeek, its U.S. online subscribers may soon peak, as competing services from the likes of Amazon, Time Warner, HBO and Hulu cannibalize the U.S. market for TV and film content online. According to the article, seven analysts recommend buying Netflix stock, 20 say hold and nine have sell ratings.
As the company continues to shed subscribers to its DVD mail-order business, its streaming business takes center stage -- but this faces challenges from Hollywood studios seeking higher fees for the streaming rights to their content. For example, Netflix’s costs extending out five years or more rose to $3.9 billion at the end of 2011, from $1.3 billion a year before. The key question, one analyst says, is whether the company will need more content to attract new subscribers—and how much it will have to pay for that.
Why Repurposed 30-Second Pre-Rolls Must Die
The migration of content from TV to Web is on, millions are cutting (or at least shaving) the cord, and people are consuming more video content across more devices than ever before. But one problem persists, laments CNET Executive Editor Molly Wood: the 30-second pre-roll -- the one that you can't fast-forward or skip -- must die.
This is particularly irritating, she notes, when the content that you want to watch is only a few minutes long. “Result: you're angry at the publisher, you're angry at the advertiser, and everyone's brand takes a hit. The publisher and the advertiser haven't made an ad ‘impression’ -- they have made an enemy,” she says. Even 15-second pre-rolls have issues, she adds -- and the biggest is repetition.
These problems will only get worse as video increasingly goes mobile. Wood issues a ringing cry for marketers to stop repurposing TV ads for the Web (and presents several alternative ideas) in order to make advertising additive to the online video experience, rather than turning consumers into brand enemies.