Commentary

What's Your Video App Strategy?

  • by , Op-Ed Contributor, August 30, 2010

I recently moderated a panel focused on the intersection of apps and video (it was the video part of an app conference). It gave me the chance to meet some new people and more deeply consider what's unique about building an app to support content distribution and monetization when the content in question is video. 

For the panel, we focused primarily on the value of an app strategy to publishers in terms of how they produce, promote, distribute and monetize video content. Here are the key takeaways: 

Apps mean distributed (but so does premium video). Most consumption of premium video already happens "off-site" --  probably the most significant difference between video and other content. A big part of an app strategy is understanding the value of your content (whatever it is) when it's lifted off of your Web site and distributed through a platform that offers portability and enhanced functionality. Premium video producers of all shapes and sizes already embrace distributed monetization, but what changes when the distribution is in an app and not a player? There are opportunities to produce a better viewing experience overall (Example: ABC's iPad app is beautiful and makes great use of the device). But there are also drawbacks tied to customizing apps and modifying ad serving by platform (Example: ABC's iPad App has an advertising experience far inferior to its full-episode player). 

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The biggest functional advances that apps will drive for premium video are enhanced VOD through an overall better UI, seamless purchasing (see below) and tools that allow viewers to easily throw content around from mobile devices to wall-mounted devices (aka TVs) and back. 

Apps mean social and viral. Sure, apps and Facebook are synonymous. But when it comes to video in Facebook, you're probably watching a YouTube video. YouTube videos are already the most viral thing that the Internet has ever seen, so I'm not sure that the social aspect of video riding aboard an app is really what's exciting. 

There is the odd fact that, outside of music videos, the more highly produced a video is, the less likely it is to become explosively viral. If a premium video app that worked like a TV guide ever become very popular on Facebook, it could be a tool for TV networks to gain a more consistent audience online.

 

Apps are mobile and local. Since most premium video consumption falls into the entertainment bucket (rather than the inform, search or sell buckets) it's hard to get excited about localization of content. It's a different story for mobile, especially for shorter form content that is better suited for smaller chunks of time. Anyone close to the mobile video space knows the current challenge of transcoding and serving video by provider and device, but also knows the potential of Android and iPhones. 

Apps are probably the interface of choice for IPTV. Not much further out, you're looking at a lot of TVs connected directly to the Internet and needing a new paradigm for browsing and watching video. For my money, this is the match you want a front-row seat at for the next five years. 

To some degree, control over the way we find, discover and watch ALL commercially supported video content in the future is starting to play out under headlines about Apple TV, Google TV, Comcast + NBC, Boxee, Xfinity, etc. Whoever prevails, there's obviously a good chance that this ends up being an app environment, with a major shift in how producers connect with viewers. 

Apps give producers more bites at the wallet. In an app environment, your content may find or unlock new opportunities for PPV or subscription revenue. Whatever platform we're talking about, the host already has your customer's credit card number, and that's a huge opportunity. Whether you're selling your video app, or you're selling the episodes riding on the app, you're just a click away from revenue (and, yes, revenue-sharing with the platform). Additionally, a new class of both vertical and horizontal premium content aggregators will soon appear, selling premium subscriptions over-the-top to iPads and IPTV. These guys will likely use apps to do this (as opposed to HTML5), and content producers will benefit. 

It's also worth thinking about how video plays a role in apps that are created and distributed by brands. Certainly, video gives branded app producers the opportunity for deeper engagement through entertainment. But as a consumer, I'm really going to have to be sold on the value that your brand brings to that entertainment. This isn't different from the logic behind any branded app, but when it comes to video, the bar will be set much higher. 

At my company, we feel pretty strongly that all premium video content (including TV and movies as well as independent content) is headed through an IP pipe in the not-too-distant future and that has huge impact on how video will be monetized. But more than just the pipe itself, there are plenty of reasons to think that the client on the other end will be an application and not a browser. 

For publishers, the potential implications are both good (more functionality, better monetization) and bad (more to build, potential for fragmentation) -- but significant enough to warrant a deeper dive into your video app strategy today.

3 comments about "What's Your Video App Strategy?".
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  1. The digital Hobo from TheDigitalHobo.com, August 30, 2010 at 6:31 p.m.

    Great piece, Mike.

    Unfortunately, the best app for watching premium video is SlingBox, which is still overlooked by people trying to cut the cord and escape the chains of the cable and broadcast companies.

    There is a large number of people who are trying to get the most value and convenience out of their TV/cable investment rather than trying to escape the bill.

    There's just too much focus on getting it all for free rather than extending the value of your investment. It strikes me as odd that we only talk about ROI in the workplace and not for maximizing our time on the sofa.

  2. Markus Bäckström from ThirdPresence, August 31, 2010 at 7:32 a.m.

    The line between an app and a browser is very thin, most of the video apps today are nothing more than launchers/bookmarks that open a browser onto a specific mobile web page.

    The reason why many publishers develop these apps is that they know they can reach a different segment of consumers if their brand is present in one of the app stores, while their mobile web site caters to another segment. It's all about content discovery.

    Creating new revenue streams from video content using PPV or subscriptions is technically quite possible in today's mobile app stores, but we haven't seen much evidence yet of consumers actually buying. This will probably change in the near future when more publishers adopt these new business models.

  3. Mark Burrell from Tongal, August 31, 2010 at 3:19 p.m.

    Mike,
    Love this and thank you for writing. We built our company to find the middle. utilize the community to build a library of content. Where it exists is up to the brand, company, or organization.

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