• by Larry Dobrow , October 14, 2003

The launch of MSN Video shifts the focus of the burgeoning broadband video marketplace toward and advertising-supported and away from a premium content model. Unlike major broadband video rivals AOL Broadband and Yahoo! Platinum, MSN's new high-resolution broadband video service is complete free to the network's users and is premised on developing an advertising marketplace around the emerging rich media platform.

The launch, was announced Tuesday at the Streaming Media Conference, also reveals an unusual collaboration between a major ad agency and a major media content provider. While MSN had been readying a broadband video service, it was at the instigation of Starcom MediaVest Group that it accelerated the process and fine-tuned aspects of the service in the process.

In effect, SMG, which has been exerting a similar influence on other broadband video players, is taking on the kind of media development role with broadband that an earlier generation of agencies played in the development of radio, television and other emerging media. As a result, MSN, along with Yahoo! and Feedroom, was one of the first broadband video players to participate in what Starcom was calling the "broadband upfront," but which it is now calling the "broadband embrace."

"As an industry, we need to embrace broadband - that's not news to anyone," Rishad Tobaccowala, CEO of Starcom IP told MediaDailyNews, following the MSN announcement.. "[MSN] approached us and asked if we could look at some of the products they were testing. We were the voice of the marketer for them."

That likely explaisn MSN Video's reliance on an advertising model that will include 15-second video spots, as well as as well as stationary ads that provide links to an advertiser's Web site and/or other information.

Among Starcom's specific suggestions to MSN was that ads run either before or during video content, rather than after. Also, the company proposed that the additional marketing component beyond the streaming ads not interfere with users' online experiences.

"It was important to us that nothing should detract from the consumer perspective," noted Tobaccowala. "If the consumer decides to interact with the other marketing elements, the video shouldn't be interrupted. The idea is to engage consumers in the video world without enraging them."

Ironically, he said, MSN and Starcom unexpectedly and unintentionally switched roles during development of the new service. "They were more marketer-friendly and we were more consumer-friendly," he quips. "But I think we ended up balancing both sides."

"It's the next generation of advertising," claimed MSN product manager Karen Redetzki. "TV is still a great place for advertisers to be for branding campaigns, but we're adding interactivity to that."

She also touted the demographic desirability of the broadband audience: "Younger adults and tech-savvy older adults are the heaviest users of streaming media, and they're the higher-income earners that advertisers are looking for."

For the beta version of MSN Video, content will initially be limited to programming from NBC and MSNBC.com, though additional suppliers will be added when the service formally debuts in early 2004. Among the featured NBC programs will be The Today Show, NBC Nightly News with Tom Brokaw, Dateline and Meet the Press.