• by Erik Sass , April 27, 2007

The broadband video market is coming, but nobody knows when it will arrive or what it will look like. The ad model is still up for grabs, and the audience size is anybody's guess. It sounds like a Beckett play; instead, it's an industry reality that generates lively debate.

Adam Gerber, the vice president of ad products and strategy for Brightcove, voiced the key point of agreement during the broadband panel at MediaPost's Outfront Conference. Digital delivery systems must be "respectful to the consumer" by enabling content "to flow to multiple platforms" on demand, in a format suitable to each. Rebecca Paoletti, the director of video strategy for Yahoo, concurred, emphasizing the rise of mobile platforms that demand crafting relevant information for consumers. "You have to reach them where they are," she said.

Yet a warning was issued against the industry taking a binary "either-or" attitude, positioning broadband video against "traditional" TV.

Jeff Marshall, senior vice president and digital managing director for Starcom USA, noted that "Grey's Anatomy" is both a huge broadcast success and one of NBC's most-streamed online programs. It reinforces the need to reach consumers with what he termed "liquid" content: video that can be reshaped in multiple formats suitable for a wide variety of platforms.

There were, however, disagreements about the penetration of broadband video verses traditional TV. Matt Wasserlauf, the CEO of Broadband Enterprises, was bullish on broadband, saying the inflection point has passed. "The next great hits are being purposed and programmed for the online medium," he said. Later, Wasserlauf raved that there are "7 billion streams a month," as well as new content sources: "We all take shots at user-generated content, but there's a value to it."

Gerber served as a foil for Wasserlauf in the playful dispute that followed, presenting a slower, more conservative model of incremental adoption in the next 10 to 20 years. While "we might have a nice marketplace for two- to-three minute clips now," on-demand distribution of longer-form content will be "a long time coming," he predicted. Gerber pointed to major infrastructure upgrades, as well as the institutional inertia inherent in legacy business models from traditional TV.

Despite the attention digital receives, Gerber added that it "doesn't mean there aren't millions of people, 12-24, who watch TV," as demonstrated by the success of "American Idol." "Name me one Internet hit that will drive 70 million viewers to vote with their mobile phones."

The panelists broadly accepted Paoletti's assertion that the "number of streams that are monetizable are small." The question becomes: what is the business model in the immediate future? How should agencies and media companies proceed? Here the panelists found common ground, agreeing that broadband video content doesn't necessarily equate to video-only advertising.

Jeff Meyer, senior vice president of interactive ad sales for the Scripps Network, advocated surrounding the video with other content, thereby engaging in "holistic integration." Similarly, Marshall asserted that the online community creates opportunities around content to reach consumers. "Is it a five-second video ad, a quick parlor game, a community? It's not just video, or text, or audio."

When video ads are appropriate, Marshall said, "they don't want to have the 16 minutes of pod time that's the average" on traditional TV. On this note, Wasserlauf confidently asserted "you can tell your story at any length. You can sell anything in five seconds, 10 seconds; we're going to figure it out." Meyer agreed, noting that it requires "gearing that massive agency machine that created those 30-second spots for years, really well."

Gerber, noting the potential of short-form ads when sparingly deployed, says: "When you reduce clutter, you increase the value of the advertising that's delivered." Gerber castigated network executives who refuse to acknowledge this reality, as well as the ability to measure addressable digital advertising relative to traditional TV.