Happy Friday, folks!
Today's VideoDaily Roundup starts with a skeptical take on video's Digital Content NewFronts. Next, reports claim that a major investor is preparing to offload its Hulu stake for $200 million. Next up are several reasons why it's too soon to write off Netflix -- and finally, TubeMogul beats the RTV video drum.
Wieser: NewFronts Notwithstanding, Digital Video Still a Drop in TV’s Bucket
Amid all the hoopla surrounding this week’s Digital Content NewFronts, sometimes it takes a sobering perspective to bring us back down to earth. In his weekly Online Spin column, Dave Morgan -- who sold behavioral targeting pioneer Tacoda to AOL in 2007 -- points to a number of observations by Brian Wieser of Pivotal Research about the TV and video markets this year.
For starters, Wieser believes that TV will have a strong upfront, despite all the concerns over shrinking audiences and attention spans, because alternatives to big TV ad buys (including cable) are still some time away. This is mostly because buyers, who depend on TV’s scale and ease of use, don’t have anywhere else to turn to.
Moreover, Web video isn’t big enough -- or growing fast enough -- to matter to them, Wieser says: at under $2 billion last year, online video is less than 2 percent of TV spending. And when you look past the numbers of Hulu and Google’s YouTube, which combined account for nearly 40 percent of the online video ad market, the rest of the industry only grew 10 to 20 percent last year. In other words, Wieser doesn’t expect the digital video spending to realistically dent TV’s advertising hegemony anytime soon.
Providence Equity to Sell Hulu Stake at $2 Billion Valuation
Bloomberg reports that Hulu stakeholder Providence Equity Partners, which owns 10 percent of the joint video venture, is preparing to sell its stake to principal owners News Corp, Comcast Corp, and Walt Disney Co for $200 million. This is a price that values the company at $2 billion, according to unnamed insiders, who added that Providence originally invested $100 million when Hulu launched in 2007, and that the media company owners will also allow Hulu employees --including CEO Jason Kilar -- to sell some shares.
Both Hulu and Providence Equity declined to comment on the story.
Don't Count Netflix Out- Yet
Netflix can still win, says paidcontent.org.'s Daniel Frankel -- but after this week's 15 percent slide, he warns that investors have finally woken up to Netflix's limited earnings potential. The company faces all kinds of competition in the streaming entertainment business: Hulu Plus, Amazon Prime, HBO Go, Verizon, Redbox's forthcoming streaming service, and various other TV Everywhere offerings.
But investors may have overreacted, too, Frankel says. For starters, Netflix has an early lead as the most proliferated over-the-top programming provider. From apps on Xboxes and Wiis to smart TVs that come with remote control featuring dedicated Netflix buttons, the company is on every screen, it seems. Frankel adds that Latin America expansion is a huge opportunity, and even though it has been delayed, it will be worth the effort, because Netflix will be the first streaming service to market there.
Frankel also points out that the content situation is better than it looks. Right now, the company is enduring a lean period in terms of big movies being available on its service, he says -- but in Q2 several of the content deals it recently purchased with the likes of The Weinstein Company, DreamWorks, and Epix, will start bearing fruit, and could help Netflix get its mojo back.
TubeMogul Claims to be Largest Buyer of Real-Time Video
TechCrunch was one of the few industry pubs to report on the new statistics that TubeMogul released earlier this week in which it claimed to be the biggest buyer of real-time video ads. That message was corroborated by several big sellers, including LiveRail and Google, who said that TubeMogul was either their biggest -- or one of their biggest -- buyers.
According to the most recent comScore Video Metrix report, TubeMogul’s ads were viewed 537 million times in March, reaching 16 percent of the U.S. population, which is more than sites like Hulu or ESPN. It’s also the only company on comScore’s list that is focused entirely on real-time video buying. TubeMogul’s last big claim was that every auto and media company in the Fortune 100 list had run a campaign on its platform in the last year.