Must Widget TV: Nets Move From Web To 'Distributed Content'

Two years into television's online video revolution, the industry's biggest players are still grappling with the basic infrastructure of the business, trying to understand how viewing habits are changing, how advertising should be formatted, delivered and valued. That was the takeaway from a half-day seminar hosted by Havas' Media Contacts unit Wednesday in New York, where top executives of the major networks and online video portals debated the status of the business overall, and the way each of them are approaching it in particular.

One thing was clear from the discussion, and from the findings of a Media Contacts and comScore study released at the event: Consumers like watching conventional network TV programming online, and they are still loath to watch much of the advertising that accompanies it.

Despite that latter challenge, the major TV providers are moving aggressively online--and not only to their own online destinations, but in an array of "distributed" online content options to deliver their programming directly to consumers regardless of where they are on the Web.

"It's not just the idea that you can put the content where you want on the Web. It's about letting the consumers grab your content," said Kevin McGurn, vice president-national sales at Hulu, the joint venture of News Corp. and NBC Universal wants to become the Google of online video. In fact, he noted that the design of Hulu--stark and minimalist--is more akin to Google's interface than the cluttered, portal-like designs popular on other video aggregation sites.

But McGurn said Hulu's site is but one entry point for users, and that real goal of the venture is to "give users a curated environment" to find, watch and manage online video content wherever it comes from, or wherever it is. Among other places, he said that might be on embedded video players located on a user's own page.

"We are absolutely looking to enable consumers who are passionate about shows to own and operate shows in their own environment," he acknowledged, echoing a widgets' strategy that is becoming increasingly popular with other major content providers.

And while the end game may be to push traffic to NBC Universal's, News Corp. and their various partners' content, McGurn said Hulu is in the process of "indexing" all video content on the Internet, with the goal of providing links to video content that isn't licensed to play on Hulu, including programming from rival CBS, which has distribution deals with competing video aggregators such as Veoh.

"The real challenge is increasing consumption," concurred CBS Interactive Executive Vice President-Chief Marketing Officer Patrick Keane, "and increasing viewership of video online."

Asked by panel moderator, Media Contacts Senior Vice President-Director of Digital Media Adam Kasper, whether the television networks weren't simply becoming "widgitized," Hulu's McGurn asserted: "Those embedded players are our best marketing tool. We want people to come back to our content."

That appears to have been the case for at least one major television player: NBC. Despite initial fears that streaming its programs online would "cannibalize" NBC's television audience, NBC Universal Senior Vice President-Digital Media Sales Peter Naylor said it has actually added incrementally to it, capturing viewers the network otherwise would not have been able to reach.

He said NBC Universal's research indicates that online viewers are, "coming to NBC because they missed it on air. And if we didn't have it online, those are viewers we would have missed."

NBC Universal calls its online video plays "NBC Replay" to reinforce the notion that these are incremental audiences to television. In fact, Naylor said a significant percentage of them are people who are "repeat viewers," while another segment are people who discovered NBC shows for the first time online. "Those are people, absent the online experience, that we wouldn't have gotten otherwise," he said.

While the networks appear to be figuring out the content part of the online video equation, the advertising portion remains in flux. All participants agreed that there is strong demand from advertisers for premium online video advertising inventory. The issue is finding a way to deliver it in a way that they will actually watch it. Part of that, the panelists said, is the format of the advertising. The other is its creativity.

"We are fortunately, or unfortunately, still taking creative assets built for television and porting them to the Web," said CBS Interactive's Keane.

NBC Universal's Naylor estimated that probably less than half the online video ads it carries were created specifically for online viewers. "Most people are taking their TV creative and shoveling it onto the Web," he said.

That could be a bad thing, said Hulu's McGurn, because research shows that conventional TV commercials wear out very quickly when shown repeatedly online, and that they will actually generate more negative brand recall than positive. Instead, he recommended advertisers and agencies develop, "a storyboarded message" that delivers a continuing message through a series of successive advertising pods.

The media executives implied that there would need to be more experimentation and failures before the industry figures out the right way to advertise via online video.

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