Online video offers magazine publishers significant opportunities to profit from the digital revolution, senior media execs agreed at a forum hosted by the Magazine Publishers of America Wednesday in New York. Video leverages the Internet's audiovisual capability, the execs said, thus differentiating magazines' online offerings from their print editions and allowing online properties to grow and attract viewers without undermining legacy publications. What's more, online video can be produced cheaply, yet can provide publishers with a valuable revenue stream because marketers are willing to pay a premium for quality video inventory. ESPN Publishing's Senior Vice President and General Manager Keith Clinkscales said that after a sizable initial investment in digital infrastructure, the cost of online content can be kept quite low, as viewers may simply be interested in "behind-the-scenes" footage that takes them inside the editorial process. "People who make magazines think that people don't want to see what goes on behind the scenes, but the results have been very good," Clinkscales said, pointing to the popularity of "Deadline," an online promotional feature that details the monthly scramble to produce ESPN The Magazine. "Deadline" follows photographers to photo shoots, offering hints of that month's content, and is released just before the magazine hits the newsstands. "Every episode ends with the cover of that month's magazine," Clinkscales said, noting that "80 percent of people who start the video watch it all the way through." National Geographic has taken a similar approach to a different subject, according to Senior Editor For New Media Valerie May, by simply equipping photographers with video cameras they can use during their assignments. The footage they shoot becomes part of mini-documentaries that are posted on the magazine's Web site. National Geographic has also innovated with live streaming video via satellite from remote areas of natural interest, including a heavily trafficked watering hole in the Serengeti during the dry season. The latter stream was "immensely popular," May said, recalling that viewers sent "thousands of e-mails a day when it was taken down, so we had to actually show them the rain there, to say, 'it's over.'" Video content need not be entirely original, added Ira Becker, senior vice president and general manager of the 1UP Network, a multiplatform media company originally centered on magazines. Describing 1UP's online video offerings, Becker said: "It's teasers, trailers, features, homegrown video, old commercials--all organized and searchable, as a search engine for all the video content around video games on the Web." Simply by aggregating video from other sources, 1UP has transformed itself into a kind of gaming-related VOD emporium. Dan Orum, publisher, president, and CEO of IDG Entertainment, which also publishes a portfolio of gaming magazines and Web sites, explained that publishers can also easily draw on aggregated video to create semi-original content. As an example, he played a short video called "Mario Bros.' Biggest Sell-Outs," which mocked various promotional uses of the venerable game over the last decade. Cheapest of all, of course, is user-generated content, according to 1UP's Becker, who noted that "90 percent of our content is user-generated." Here, he said, YouTube has revolutionized the industry. He recalled that 1UP--which was in the process of developing its site when YouTube first appeared--held off on launching its site to further study YouTube. "We delayed the launch of our game video site because there was a new site that had the technology for getting videos online that was elegant and clean, and we had to react."
Yahoo and AT&T announced an expansion of their relationship Wednesday, giving subscribers to their co-branded high-speed Internet service a beefed-up version of Yahoo's instant messenger with voice. AT&T has also speeded up its broadband service to accommodate consumers' rapacious appetite for multimedia content, and partnered with Starz Entertainment for a new video download service named Vongo. With the "phone out" feature of AT&T's voice-over-Internet-protocol service, calls within the U.S. and to more than 30 other countries can be made for two cents a minute or less. U.S. consumers can receive calls on their PCs from traditional and mobile phones for $2.99 a month or $29.90 a year with the "phone in feature." For $27.99 per month, the speed of AT&T's broadband service is now between 3mbps and 6mbps for downloading streams, and between 384kbps and 768kbps for uploading. Additionally, customers who sign from this point forward for one-year contracts can get 1.5mbps downloads and 384kbps uploads for $12.99 per month, or 3mbps downloads and 416kbps uploads for $17.99 per month. The Vongo service costs $9.99, and allows consumers to download movies and other video content online and play it on Windows-based PC, laptop, or portable media devices, as well as on their TVs. Subscribers get unlimited access to over 1,500 movies and video selections, as well as the Starz TV channel. Pay-per-view titles are available for $3.99 per movie.
The Google main search page, long off-limits for display ads, Wednesday hosted an ad for the Firefox browser, marking the first time ever that the search giant has promoted a non-Google product or service on its home page. The development is significant because marketers have clamored to show ads on the Google home page for years, said Gary Stein, a search expert and former analyst with Jupiter Research. "Any media agency worth their salt is on the phone saying, 'Hey, sign us up,'" Stein said. "It's been the most sought-after piece of real estate for five years now, and it's been totally off-limits, and I don't think you just let this go by." The ad appeared on Tuesday, and was taken down Wednesday afternoon. It was only displayed to people using the Internet Explorer browser and its call to action--download Firefox--can easily be seen as a direct shot at competitor Microsoft. "It's not like you needed too many more signals that they were going to aggressively position themselves against Microsoft," Stein said. Industry-watcher John Battelle mused on his blog that "Up at Microsoft, they're probably ordering new chairs for Ballmer's office," referring to a report that Microsoft CEO Steve Ballmer hurled a chair across the room and when he was informed that former Microsoft engineer Kai-Fu Lee would be heading to the Mountain View search giant. In January, the search giant began backing Firefox, an upstart competitor to Internet Explorer, with the introduction of the Google Pack, a software package that included a host of Google and non-Google applications, many of which--including Firefox, RealPlayer, and the Trillian cross-platform instant messaging client--compete directly with Microsoft software. The move was viewed at the time as a preemptive strike against the possibility that Microsoft will incorporate a toolbar in its next version of Internet Explorer, making it easier for users to go to MSN than Google. Google did not return calls for comment for this article.
Gaming magazine and Web site publisher IDG Entertainment and Best Buy Electronics have entered into a distribution deal that involves syndicating content from GamePro--IDG's flagship gaming property--to Best Buy's Web site, the companies will announce today. As part of the deal, IDG also is including links to Best Buy for games and accessories reviewed on GamePro.com. "Having Best Buy as a partner is just another way to interact with the consumer," said IDG Entertainment CEO Daniel Orum. An additional component of the deal involves IDG producing regular special issues of the GamePro print magazine, dubbed "Level 2," for sale only in Best Buy stores, with co-branding, coupons, and special content focused on Best Buy's bigger sellers and newer titles. The companies have also set up a co-branded Web site, Lvl-2.com, which allows customers to subscribe to the special edition magazine online, and offers a free newsletter. Also as part of the deal, BestBuy.com becomes GamePro.com's exclusive retailer, with all "Buy This" links on the gaming site leading to product pages on BestBuy.com. On its product pages, Best Buy will be featuring reviews, media, and screen shots taken from GamePro.com. The first issue of GamePro Level 2 was released earlier this month, and the release of the second is set to coincide with the E3 developer's conference on May 9.
Microsoft, which has established its presence in the gaming market with the Xbox and Xbox 360 gaming platforms, is now reportedly in the market for in-game advertising as well--having agreed to purchase in-game ad firm Massive Incorporated, according to press reports. Initially reported Wednesday by The Wall Street Journal, the sale is pegged at between $200 and $400 million, but both companies declined to comment on the reports. James Belcher, senior analyst with eMarketer, said the biggest application of a Massive-Microsoft alliance would be to monetize Xbox Live, Microsoft's online gaming network, with dynamic advertisements. But, he said, the deal could extend well beyond that. "That's the immediate impact you've got, but Massive is not limited to consoles, either," he said. "It's my understanding that they can also do PC online game ad serving, and I'm sure they have mobile gaming in mind at some point." Microsoft has also entered the game development space, with purchases of highly regarded game studios Bungie, makers of the immensely popular Halo and Halo 2, and Lionshead, home of celebrity game designer Peter Molyneux. Belcher said that advertising could also be used to mitigate the rising cost of developing a blockbuster game. "Although there can be a wide range of production costs, the bottom line is that the really big games are pricey," he said. "If you get advertising, then that hedges the bet to an extent--and it can do so in an ongoing manner, with the type of advertising that Massive's other in-game advertising networks offer, because they can update the ads over time." In-game advertising is a burgeoning market, expected to grow to $732 million by 2010--up from $56 million at the end of 2005, according to a report released last week by the Yankee Group.
Outdoor gear retailer The North Face and custom publishing company Pace Communications today are expected to launch a new online magazine for outdoor enthusiasts. The debut issue of the magazine, dubbed "Epic," will include five major feature stories, online photo spreads, a video clip of an expedition to Nepal, and downloadable pdf files of trails, among other items. New content will appear monthly. The Web-zine won't carry ads for at least the next three months, but the company intends to look for ad partners, said Craig Waller, chief marketing and sales officer at Pace. "The intention is to explore opportunities for advertising," Waller said. The magazine also will contain links back to the North Face site, Waller said, but the editorial content won't promote North Face merchandise. Waller added that one of the goals of the magazine is to reassure outdoor enthusiasts, such as hikers and mountain climbers, that The North Face hasn't abandoned its outdoor-adventure roots in favor of winter-wear fashion. The initiative marks the second online-only custom publication that Pace has created. Previously, the company published mMode for AT&T Wireless, but that magazine vanished after the company's 2004 merger with Cingular. Pace also creates custom publications for other clients, including Delta, United, and US Airways.