VideoDaily Roundup: Most Publishers Still Face Scale Problems

by , May 7, 2012, 2:28 PM
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Happy Monday, folks,

Today’s Roundup starts off with a scary proposition for all video publishers not named YouTube or Hulu: that video ad sales growth for many of them is modest, flat, or declining. Over in the music biz, brand collaborations and product placements in music videos have become a boon for brands and bands alike. Next we look at one columnist’s personal experience with cord-cutting. Then another columnist maps out Netflix’s tough road ahead, and finally: Hulu earns some kudos.

Most Publishers Still Facing Scale Problems

Most publishers of video content are facing a far less profitable future than the splashy Digital Content NewFronts, which concluded last week, would suggest, Ad Age reports. In fact, as an oft-cited research note from analyst Brian Wieser points out, “(online video) growth outside of Hulu and YouTube seems to be far from exploding.”

Some big names like The Wall Street Journal, Discovery, and Hearst are seeing flat to modest growth from video ad sales on their own platforms, while the likes of Gannett, Turner and Demand Media are actually seeing declines. Indeed, in many cases -- like that of the WSJ digital network -- the only growth is coming from partners like YouTube, Roku, Apple TV, and Xbox Live.

Amassing enough scale to matter to advertisers is turning out to be something of a chicken-and-egg problem for these publishers, who won’t invest in video until they can be sure of recouping their costs, but brands won’t invest in their video products until they have a significant audience.

As Video Sharing Rises, Brand-Band Collaborations Will Increase

In today's world, musicians and record labels don’t make the same money they used to -- or even in the same way they used to. As such, brand collaborations and product placements are becoming increasingly common inside music videos. As The Network contributor Jason Deign reports, artists from OK Go to Kylie Minogue and Lady Gaga regularly include big-name bands in their videos, while Black Eyed Peas frontman Will.i.am has collaborated with Salesforce.com on a cartoon series, and Motley Crue has even appeared in a Kia ad.

The rise of video sharing is fueling such collaborations, Deign says, which are beneficial to everyone involved. In many instances, it is the musicians who come up with the concepts, and then pitch them to brands. But the temptation is always there for brands to become too controlling, so it is equally important that brands become comfortable with ceding creative control to the artists. Some will fail, while others will strike a perfect balance -- but either way, we should expect the trend to continue.

Cord-Cutting: Not So Scary After All

San Jose Mercury News columnist Chris O'Brien recounts his family’s experience with cutting the cable TV cord while trying not to give up most of their favorite TV programs. This, of course, means streaming shows and movies online. Spoiler alert: it ain’t easy.

In order to buy an Internet-ready plasma TV for around $1,000, O’Brien figured that he and his family could recoup the cost by getting rid of cable TV and landline telephone service for one year. The challenge, of course, is continuing to watch their favorite shows. The answer comes in the form of subscribing to various online streaming services, including Netflix ($8 per month), Hulu Plus ($8 per month) and Amazon Prime ($79 per year), in addition to buying Apple TV for $99.

A few pitfalls -- like the fact that Hulu Plus won’t stream certain shows to an Internet-connected television (in which case he had to connect his laptop to the TV), asid -- O’Brien says that “mostly, it’s been great…from where we sit, the future of television has arrived, and it's not so scary after all.”

Netflix, Media Co’s “Frienemy,” Faces Tough Road Ahead

Netflix is only beneficial to media companies when its subscribers choose to watch their shows as a supplement to their cable TV viewing, says Forbes contributor Dee Gill. It's when they start bypassing cable TV altogether that the conflict starts.

As Bernstein Research analyst Todd Juenger pointed out in a report last week, ratings for kids programming on Disney's channels and Viacom’s Nickelodeon dropped in households that stream Netflix. As a result, Juenger predicted that both companies would pull their programming from Netflix.

If this occurs, it would only create another “gaping hole” in Netflix's content library, Gill says. Meanwhile, competition from Hulu, HBO, Amazon.com, Comcast, Apple and Google will only heat up, as these companies seek to enter the streaming content game. All this means that creating and maintaining a content library is about to become more expensive, Gill says. Sounds like a tough slog for a company that just posted a loss in its Q1 earnings report.

Hulu Deserves Praise for “Frictionless Sharing” on Facebook

While Hulu deserves “no praise” for a “sad and backwards” rumored plan to restrict online streaming content to cable subscribers, it does deserve kudos for enabling “frictionless sharing” on Facebook, Forbes’ Kashmir Hill says. This means that anyone with a Hulu Facebook app can automatically broadcast videos they watch to their friends on the social networking site. Hulu also recently decided to make it easier to turn such social sharing on and off, and somewhat surprisingly, made the default setting for Hulu subscribers “off.” Hill says that more companies should follow Hulu’s lead in making it easy to toggle between sharing and keeping one’s media consumption private (he singles out The Washington Post, for example).

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