Google's $100 million investment in original video programming in niche markets on YouTube will unearth some interesting models this year. Brands will move toward product placement in online content that serve up in video programming on desktop, tablets and smartphones, replacing TV commercials, according to Suzie Reider, head of industry development at YouTube. "Companies like American Express can't keep running television commercials," Reider said, pointing to Nike's 30% annual decline in TV ad investments. "The consumers they're trying to reach are online, streaming content off Hulu and Nextflix, and downloading the last season episodes from Amazon.com." Investments in commercials continue to dwindle, fueling a new industry for marketing content based on niche product programming. Alphabird plans to prove it. The company began to build a production arm, adding to its audience development and video ad business. On June 20, Alphabird CEO Chase Norlin will announce a deal with Paul DiMeo. The award-winning actor from "Extreme Makeover: Home Edition" will spearhead the company's first comedy Web series featuring branded product placements set to debuted Q1 2013. DiMeo and writer/director Ken Hanes will executive-produce the series, along with Alphabird's Russell Naftal and Johnny McMahon. In the scripted series, he will play a down-on-his luck celebrity carpenter who gets fired from a reality makeover series and returns to his first job: a $15-per-hour handyman. DiMeo's character must perform menial tasks while trying to get back into the Hollywood limelight. "The Handyman" will enable the engagement of brands, such as home improvement and appliances to integrate their messaging and products within the show's format. The digital-branded content becomes the production arm of Alphabird. It will give lifestyle brands an opportunity to do what soap operas did in the 1950s and 1960s. Alphabird opened a Beverly Hills office and hired former digital entertainment production and development team from some of Endemol, whose programming includes the reality television series "Wipeout," "Big Brother" and "Deal or No Deal." The team earned 2012 Webby Awards for "MLB Fan Cave," "Married on MySpace" and "James Hyde Steals the Show." The former Endemol head of digital development and distribution Russell Naftal, head of digital production Johnny McMahon and head of integrated partnerships and marketing Kelli Usher join Alphabird. Mike Caruso, former VP of entertainment at Viumbe, and music producer for Lil Wayne and Drake, becomes the VP of Alphabird's music production division.
Last fall, YouTube announced it would launch more than 100 original content channels across its site in 2012. Now that we’re six months into the year, it’s time to assess how YouTube’s original content channels have fared so far. To date, 87 channels are live on the site, with another 17 on the way. Collectively, the content channels have racked up more than 12 million subscribers and nearly 7 billion total video views. So is that good or bad? Well, the numbers are a little misleading, Ars Technica’s Nathan Matisse points out. Many of these so-called “new” original content channels are actually old Internet brands. For example, The Onion, whose new channel is still forthcoming, already has 400,000 subscribers and 177 million views before officially launching. Moreover, the top-performing channels account for a disproportionate amount of subscribers and views. MachinimaPrime, the top channel, has 4 million+ subscribers and close to 3.5 billion video views. Justin Bieber’s channel has 1.5 million subscribers and 2.5 billion views. Meanwhile, lesser performers like EverydayHealthTV, which launched in April, only have a handful of subscribers and less than 2,000 views. Ultimately, Matisse says, “more than half a year after the launch, calling any of the original content channels ‘defining channels of the next generation’ feels like a stretch.” And that’s not necessarily the fault of YouTube or the YouTube content creators. Sure, some major Hollywood players are lending their names to certain projects -- but at least for now, “these efforts lack the attention of their cable-based counterparts.” What media outlets are devoting critics to covering them? And speaking of attention, what happened to the $200 million YouTube said it would devote to marketing its original content channels?
The number of Americans who own tablets is surging, and that’s good news for advertisers, according to the Online Publishers Association, which found that tablet users respond to advertising delivered via their devices -- and also spend a fair amount of money on purchases made with tablets. Some 29% of tablet owners say they have researched a product in the last six months, while 23% have clicked on an ad, 20% have used a special offer or coupon, and 19% have visited a product Web site. This is the second wave of a survey first conducted in 2011, allowing the OPA to identify and track developing trends among tablet owners. Based on a survey of 2,540 Internet users conducted from March 19-26 by Frank N. Magid Associates, the OPA found that 31% of the U.S. Internet population currently owns a tablet -- up from 12% in 2011. That number is predicted to rise to 47% by early 2013, according to OPA President Pam Horan. The latter figure will equal 117.4 million U.S. consumers, based on a projected Internet population of 249.7 million in 2013. Tablets are rapidly becoming embedded in consumers’ lives as a central component of their media consumption, the OPA survey found, with 60% of tablet owners using the device several times a day for an average of 13.9 hours per week. Most tablet usage takes place in the evening, with 59% of tablet owners using their devices between 5 and 8 p.m. and 53% using them between 8 and 11 p.m. In terms of location, most tablet usage occurs in the home, but there is a significant proportion taking place outside the home. Overall, 67% of tablet usage (in terms of time spent) occurs in the home, compared to 15% at work or school, 14% in the car or commuting and 4% while shopping. In regard to perceptions of tablet advertising, 37% of tablet owners said ads delivered via the device were “hard to ignore,” 33% called them “eye-catching,” 29% said they were “unique and interesting” and 28% thought they were “relevant.” Twenty-seven percent said they were motivated to purchase a product by tablet advertising, and 26% were motivated by ads to research products. E-commerce is also a popular application, with 38% of tablet owners (some 23 million people) saying they have used their device to make an online purchase. That includes not only tablet apps -- where total spending is projected to increase from $1.4 billion in 2011 to $2.6 billion in 2012 -- but retail and apparel (21% of tablet users), consumer electronics (19%) and personal care and beauty (17%), among other categories. Tablet users spent an average $359 on tablet purchases over the last 12 months.
Interpublic Group’s MagnaGlobal has downgraded its ad revenue growth forecast for 2012. The firm, part of IPG’s Mediabrands unit, now predicts global ad revenues will rise 4.8% to $480 billion, which is two-tenths of a percentage point less than its December 2011 forecast. Magna said the downgrade is primarily due to Western Europe’s shaky economy, where ad revenues are expected to shrink by 0.2% this year. For North America, the firm upgraded its forecast slightly, now predicting growth in regional ad revenues of 3.9% to $165 billion. That’s also a change of two-tenths of a percentage point, versus its December forecast. For Asia-Pacific, the Magna forecast has been revised slightly downward with growth in the region now predicted to be 8.4% versus the earlier forecast of 8.5%. Within the region, Japan gets an upgrade to 2.6% growth (from 1.3%). That is based on a stronger-than-expected rebound in the first four months of the year and the low comparison base of 2011, when an earthquake and tsunami ravaged the nation’s economy. The forecast for Australia has been downgraded from 2.1% growth to 0.8% amidst “advertiser cautiousness and political uncertainty.” Emerging markets will account for 25% of global ad dollars, per the Magna forecast; they are driving global growth. Emerging markets in Asia will average 17% growth this year and 9% in Latin America. Among individual countries the strongest growth rates will come from Argentina (+25%), Hong Kong (+18%), China (+18%), Indonesia (+17%) and India (+13.4). For 2013, MagnaGlobal is expecting a slightly lower growth (4.5%) followed by a re-acceleration in 2014-2016, based on macro-economic forecasts. Its current five-year compounded annual growth rate prediction for the 2012-2017 period is 5.8%. That forecast is based on what the firm sees as modest growth in North America (+3.4%) and Western Europe (+2.7%) over that period, coupled with double-digit growth in emerging markets (+12.5%).
Though many brands call themselves “content creators,” few have the resources or talent to do it well. With the help of video publisher Cinelan, General Electric has set out to be the exception. Earlier this month, the two unveiled a slate of short-form films, which first premiered at the 2012 Sundance and Tribeca Film Festivals, as well as on iTunes, Amazon Instant Video, Sony PlayStation, CinemaNow, and Vudu. Produced by top documentary filmmakers, the films are supposed to explore “the human power of ideas and invention” -- an idea GE hope to associate itself. Beginning July 9, in partnership with Cinetic Rights Management, GE and NYC-based Cinelan plan to expand their distribution network to Comcast, Time Warner, Cox, Charter, Verizon and Rogers. The plan is to achieve the widest distribution for their co-venture, Focus Forward, via cable and satellite VOD services, gaming system networks and Web-based free-on-demand platforms. “Getting films seen has always been the toughest obstacle for short-form storytellers, so we’re proud that the ambitious distribution strategy we’ve developed … has been met with such enthusiasm,” said Cinelan co-founder Karol-Martesko-Fenster. Between January 24 and April 11, the first five lightly branded Focus Forward films (which debuted at Sundance) received 1.1 million unique views online, and were shared 3.5 million times by audiences around the world. New fare will include four new three-minute films by award-winning filmmakers Eddie Schmidt, Liz Garbus, Jeff Reichert & Farihah Zaman, and Supriyo Sen. Also, as part of the ongoing day-and-date release strategy, all four of the three-minute films will premiere on Vimeo on Monday. According to recent findings from Outbrain, content marketing continues to be one of the rising stars of the online marketing world. Along with GE, American Express, Proctor & Gamble, and General Mills use it alongside more traditional strategies to reach their target audiences. Overall, the content delivery platform found that 100% of brand and agency marketers already utilize content marketing in their overall strategies, while 87% of respondents said video was the most common form of content created. Financial terms of the partnership between GE and Cinelan have not been revealed.
When Discovery Communications bought Revision3, it both validated the promise of online video and killed any talk of it “killing cable.” Nonetheless, audiences are increasingly turning to the web for video content, legitimately or pirated. But I Don’t Wanna be a Pirate! As the Take My Money HBO site argued: “We pirate ‘Game of Thrones,’ we use our friend's HBOGO login to watch ‘True Blood’… Please HBO, offer a standalone HBOGO streaming service and Take My Money!” True, “Game of Thrones” was far and away the most pirated TV show this season. But when I interviewed Three Doors Down in my previous lifetime, they told me that “Kryptonite” was one of the most pirated songs of 2001 on Napster, but that helped make their album a success, amongst the top sellers. In other words, for today’s generation of big media managers and executives (who -- sit down folks -- have probably “downloaded without full authorization in their youth”), piracy is a fact of life. In any case, Twitter jumped on the meme, “concluding” (scientifically, no doubt) that the average person was willing to pay $12 a month, or about $145 a year, for HBO as a stand-alone service. History Repeats Itself (But Some Do Learn From History) To this day, folks on Twitter seem to be on a hunger strike waiting for HBO to give in. In an exchange I had with fellow online video entrepreneur Rob Sandie, he argued: “we used to buy albums for $10 and now buy singles for $1.” You got me, Rob: yes, consumer habits and shopping patterns change (I don’t store meat in ice, between walls, but use a fridge like the rest of the modern world, too, but I don’t build my own fridge. I buy what’s available). Either way, I think if we ever see anything resembling à la carte pricing, you won’t be paying $10 for all of HBO, but only, possibly, $10 for a show (and likely a season). Why? The cost of creating quality programming – and filling a new season’s slate – is far more than people think. So judging by what consumers are willing to pay, then it’s likely that they’ll only shell out dollars for the existing hit shows. This means that a producer like HBO won’t have the wherewithal to launch – let alone fund – new shows. Hollywood is after all a hits-driven business, which means it’s also a failure business. But even if HBO could afford to charge “only” $12 per consumer for all of its programming, TechCrunch’s Ryan Lawyer wondered: “is that something HBO would be interested in? And is it really leaving money on the table? HBO currently has about 29 million subscribers, and reportedly receives around $7 or $8 per subscriber per month. So HBO could, theoretically, get more per subscriber than it’s currently making.” Rightly, he concluded that once you include infrastructure, sales, marketing, and support costs required to pull it off, HBO would lose out. The marketing muscle that Comcast, Time Warner and other access companies flex for HBO alone is priceless. I’d add that once music went the way of singles, Apple benefitted most. The record labels replaced one headache (piracy) with another (Apple). Yes, it’s better, but in the “this death by injection is so much better than that guillotine way.” Today, artists make more money through concerts than record sales, but the real question there is “is that due to growing concerts revenue or falling album sales.” In other words, maybe Hollywood’s learned from the recording industry and prefers to put up with some piracy to control the genie’s flow out of the bottle. And now from the department of ‘We’d all be Zillionaires if Hindsight Mattered’ Of course, with users watching more video content than ever online you’d think that there’s an opportunity there, somewhere. But it won’t emanate from big media companies, because they will rightfully remain defensive. As HBR points out: “If the newspaper companies had been nimble, well-managed organizations (news alert: monopolies usually aren't) trying to follow Clay Christensen's playbook for dealing with disruptive innovation, they would have set up separate ventures aimed at exploiting new digital advertising opportunities. Norway's Schibsted did just that in 1999, and has remained a classified-advertising power. In the U.S., two newspaper chains bought the job site CareerBuilder in 2000 (a third joined them in 2002), and have built it into a successful online/print hybrid.” That is all great, and some would argue that despite the challenges, conflicting agendas and egos, Big Media’s foray via Hulu, Vevo, Epic et al. are signs that they are doing something instead of sitting on the fences, but the notion that the imminent future of Hollywood is a la carte pricing is as ridiculous as the suggestion that in the future everything is an app and the web shall, go away. Don’t Blame the apple (the one you eat, but also the one from Cupertino) for Gravity This past weekend, the New York Times’ David Carr wrote: “But I’ve come to understand that it doesn’t matter what I think is right and wrong (…) The market is as the market does.” He was talking about Arianna Huffington realizing there was an opportunity; and Big Media’s apathy towards online video will create opportunities for online video entrepreneurs like Sandie, myself and many others. As I like to say, “You may not like the fact that the apple falls from the tree and hits you on the head, but that’s gravity – and you can’t blame the tree, the apple or gravity.”
By now, you would think the cable industry had learned not to let Washington regulators set the parameters for unchartered tech territories. But what looks to be a Department of Justice antitrust investigation of cable companies’ “anti-competitive data caps,” could do just that for nascent online video competition. The outcome—which could accelerate cable’s shift to usage-based pricing for broadband while reinforcing cable’s walled garden—would work against innovators and outsiders, such as Apple and Google, seeking their own access to cable video feeds. Analysts say that would be bad news for Netflix and other online video providers. But it would be a blow to all players at a time when innovation is paramount. Like so many businesses today, cable remains an insular industry protecting its domain investment and guarding against releasing too much too fast—and usually only when pushed. And that’s the point. In an age when disruptive elements come out of left field, savvy and agile, no company or industry can afford to be tethered to rules of their own making or the government. When innovative disruption is hampered by fear and protectiveness, companies are unable and unwilling to examine options for exploring and creating more lucrative options for the long haul. With all the momentum its more conventional rivals lack, it is difficult to anticipate the influential role that Facebook will play in video distribution that could challenge everyone from YouTube to Hulu. By keeping the reigns too tight and the walled garden too tall, cable distributors and content producers run the risk of becoming victims of their own rigidity. It’s conceivable the DOJ investigation alluded to in The Wall Street Journal, but not confirmed by the government agency, was triggered by collective moves by cable providers to give themselves a marketplace advantage. For instance, Comcast recently eliminated usage caps and embrace variable rate pricing for overages in order to satisfy the FCC, but Comcast also opted to allow Microsoft to take its Xfinity video stream as part of the movement to make its video stream available on IP devices and just extended it to the Xbox. Netflix has been the most vocal about that representing “discriminatory” competition that creates hardship. That likely will dissuade Comcast from making its video feed available elsewhere, whether it is Google or Apple. That selective opening of the walled garden and potential innovation is what is most dangerous. It invites regulator action in an otherwise vibrant and freely evolving marketplace. Apple can and will suffer from the same thing. It’s not so much the regulation that ultimately could be created and imposed as it is the response and potentially counterproductive actions free market players make anticipating the worst. The DOJ, FCC and other government regulators are not eager to tread into these fluid new territories unless the marketplace is running amok. In a well-written report, Bernstein analyst Craig Moffett contends DOJ scrutiny would likely end caps and usher in usage-based pricing that ultimately would be more threatening to online video providers. Widespread adoption of usage-based pricing would result in higher effective prices for online video and reduced demand—a no-win all around. Others point out that cable companies already are moving away from bulk, universally priced broadband plans and toward usage-based pricing, so either way, consumers face more expensive Web video. Moffett wisely points out that the competitive dynamics reach well beyond broadband pricing. Consider that content companies continue to resist selling individual channels to cable and satellite distributors locking them and consumers into bundled services. It isn’t likely to be reviewed by regulators and creates yet another competitive hurdle to getting consumers to the anything-anywhere existence mobile-connected devices offer. No one is an innocent bystander here. Content distributors and producers, device manufacturers and consumers a have a role to play in creating a level, but vibrantly competitive playing field that benefits from unfettered innovation. It is an opportunity for companies to capitalize on the unknown and the unexpected.
If a picture is worth a thousand words, I’d wager video is worth at least twice that. When I arrived at a former job in the performing arts I was shocked that the organization’s website had no audio or video. Interesting. This is an orchestra with a web site that featured no music. I don’t think I need to explain why web traffic was low and social media activity non-existent. And it’s not surprising that when we invested time and money in re-creating the website and including video and audio, traffic — and ticket sales — improved dramatically. So, for those of you with development goals, causes to promote, audiences to engage, you will have more success if you include video in your content plan. Did you know that in December 2010, the average American spent 14+ hours watching video online and streamed a record 201 videos? (See comScore’s “2010 U.S. Digital Year in Review”.) I can’t think of a better way to engage people in causes than by sharing compelling stories that inspire action. SPCAs are doing a good job with this right now. Think about that Sarah McLachlan spot for the ASPCA – it gets me misty every time. It powerfully combines words, music and video to create a compelling, emotional story that moves the audience to act. Consider your cause and picture your unique story coming to life on screen. Are you helping kids afflicted with cancer, saving your state’s natural treasures, assisting families displaced by a disaster? Your story told visually will positively impact your ability to raise funds that directly help you fulfill your mission. I can hear my non-profit marketing friends saying: “But, video is expensive.” Sure, it can be. But digital technology has made video much less expensive than in the past. I encourage you to look at your budget, move things around, and/or start saving — think about the big picture and how this investment can bring you more dollars. The old marketing adage is true: you have to spend money to make money. You can also start small if necessary. Grab your smartphone: ask a participant at your charity walk why (and usually for whom) they are walking; feature animals at your shelter; ask an employee what inspires her to work for your organization. Posting short clips like this on your site and social networks will engage more people than having no videos at all. However you choose to incorporate video into your content plan, you’ll want to show decision-makers results that justify time and dollars spent. The more positive results you share, the more likely you will be able to acquire larger budgets for future videos. Here’s an informative article on measuring the ROI of online video. Storytelling is the key to successful cause marketing. And, in my opinion, video is a must-have for any organization’s content strategy. Your mission is worth the investment.