• by March 11, 2005

Think Yahoo!'s Webcast of Showtime's "Fat Actress" was the first time a portal offered a stream simultaneous to the airing of a TV program? Think again.

America Online last August offered members the debut episode of the Warner Bros. Television drama "Jack & Bobby" prior to the program's first broadcast airing on The WB. While it wasn't offered Web-wide, the show logged 700,000 streams on the AOL service during the week-long period it was available. More recently, in January, AOL offered a full episode of Bravo's "Queer Eye for the Straight Girl" not only to members, but Web-wide at AOL.com. It offered the Webcast simultaneously with the TV episode and made it available on-demand for a week both to members and Web denizens. "Queer Eye," which racked up 100,000 streams in its week-long run, marked the first on-air/online simulcast of a complete TV episode on the Web.

And just last month, AOL began offering exclusive weekly recaps of the ABC hit "Desperate Housewives" to members and Web users. AOL makes the recaps available on-demand each Monday following the Sunday night show; Buick sponsors the recaps with pre-roll video ads before each clip. Each of the three recaps offered so far have netted 200,000 streams. On March 15, AOL is poised to stream complete episodes for an on-air/online simulcast of Bravo's "Project Greenlight" series to both subscribers and the Web at large.

It's all part of a major push by AOL to put more video content on the Web. With more streaming video content, AOL hopes to lure marketers that are increasingly bullish on video ads. The portal already had deals involving video with advertisers including Procter & Gamble, Kraft Foods, General Motors, Volvo, Sharp Electronics, and Cadbury Adams' Dentyne. "AOL can sell demographics or psychographics depending on what makes the most sense," says Kevin Conroy, executive vice president-COO, AOL Media Networks. "We already do this across a huge network and wide array of brands and vertical programming categories." He says the company is trying to make both the products and the programming make sense to consumers and media planners.

AOL is beginning to crow about its video offerings as it opens the storehouse of content previously available to members only. It's also ratcheting up the marketing and promotional machine, preparing for a fall launch of AOL.com for the Web--the new gateway for what it hopes will be a mother lode of programming content, much of it video-based.

Opening The Front Door

The company will need all the promotional heft it can muster to convince the online audience that AOL.com isn't just for subscribers any more. Conroy, AOL's point man for the Web video and programming strategy, promises that users who visit the Web-wide site will be rewarded. "We're going to open the front door," he teases.

AOL will be helped by the planned launch in April of a single HTML video playback experience on all of its properties on the Web--AOL, Netscape, AIM, and the others. This feature will make it easier for consumers to play back videos, because they'll no longer have to first download a file. What's more, the switch to HTML means that all online users--not just subscribers--will have access to video playback.

"We're moving to the Web very quickly," Conroy says. "We have a running start with respect to programming; we are not starting from scratch. We're catching up fast with respect to our ability to deliver to major advertisers what they're looking for around rich media."

Conroy notes that while the company wasn't focused on offering a consistent video playback experience and industry-standard advertising units ("that wasn't the business strategy") when it segued to the Web-wide model several months ago, it became imperative to deliver advertisers workable video options.

Marketing Opportunities

AOL offers sponsorships of video content via in-stream advertising that take place within a banner; the synchronized ad banners comply with the Interactive Advertising Bureau's recommendations. There is also in-stream advertising delivered within a video player. "We will clearly be in the game in a big way in April," Conroy enthuses. He's also optimistic about the prospects for on-demand video and the next step beyond in-stream video players. "I think there's going to be a real resurgence on the creative side of the business."

Conroy's also keen on the potential for video-on-demand over IP (Internet Protocol). "People who are worried about TiVo haven't fully appreciated that VOD over IP should be the most attractive alternative to advertising in a TiVo world. And you can't skip the ads with in-stream ads," he notes.

With more advertisers rejiggering their media mixes and shifting dollars to the Web, as well as other non-traditional forms of media, online publishers and portals are anticipating strong interest this year in Internet video advertising. That is, in-stream advertising and 15- and 30-second pre-roll video, most of which is appropriated from marketers' existing TV ads. The typical pre-roll method is to place the 15- or 30-second video ads ahead of two- to five-minute news, entertainment, and sports clips.

The in-stream format works for most types of content--with the exception of music videos, says Conroy. "You wouldn't want to break up a video to run an ad; it's more effective to have pre-roll or post-roll." It's something Conroy is intimately acquainted with, having helmed AOL Music and AOL Entertainment, where he launched the company's popular "Sessions" and "AOL Live" franchises.

The next real opportunity, Conroy says, is for AOL to deliver advertisers targeted audiences. "We can aggregate a certain number of streams as we grow our scale; we're looking to continue to improve our infrastructure and improve our streams," he says. AOL, he continues, needs to capitalize on "communities of interest," and focus on "combining programming expertise with industry-standard advertising solutions."

Conroy offers an example of country music fans. If it turns out that they index as likely to purchase certain products--say, GM trucks--AOL could approach GM and offer to create new ways for the company to reach those fans. "The reality is that in a traditional broadcast environment there are few outlets for advertisers to reach them," he says of country and music fans. "Here, AOL could create a program for a specific model GM vehicle and go with in-stream advertising of country music videos. You attach the right message with the right content to the right audience."

Meanwhile, AOL and Conroy are beating the bushes on video both in the consumer and advertiser realms. So are Yahoo! and MSN. While Yahoo!'s numbers on "Fat Actress" aren't in yet, (the show debuted on March 7 and is offered for free replays through March 12 on Yahoo! TV), it's clear that online publishers and portals are trying to meet interest in video content and advertising.

One of AOL's more popular features is "TV's Top 5," a daily recap of the five best TV moments culled from the previous day based on feedback from users, data from TiVo, and AOL's own editorial staff. "TV's Top 5" racks up between 5.5 million and 7.5 million streams per month. But AOL's biggest video coups, so far, have been in music. For example, Sessions racks up about 4 million streams per week; AOL Live boasts up to 1 million each week. A blockbuster: AOL logged more than 18.6 million streams of Super Bowl XXXIX ads.