Reel Pop

MS + Yahoo = What for Video?

On the news of Microsoft's unsolicited acquisition bid for Yahoo this morning, I'm trying to wrap my head around everything Yahoo's been trying to do in the video space lately. What vid props/capabilities would Microsoft get in that space?

Yahoo's current video strategy
"Video everywhere you are on the net." Back in August, Yahoo announced they were re-focusing on video, and planned to offer a single channel for music videos, TV shows, movie trailers and sports highlights. They also planned to offer video through Flickr. IMHO, both sound like uninspired ideas. Over the next few years, I expect destination sites will go the way of the dodo, as younger users learn to navigate meta search engines and apps. Unless the media companies actually prevail in their ploy to cripple search engines -- and they won't: See recent lawsuits against the Pirate Bay and Seeqpod, for example, plus follow the Perfect10 v. Google case -- I see exclusive platforms as a thing of the past. That includes current exclusive distro agreements.

Also: Flickr with video? Ugh. A surefire way of alienating that site's user base, including me. Do one thing, do it better than everyone else, win.

Current video share
Yahoo currently controls 3%-5% of the video streaming market. YouTube has about 27%. Microsoft's video properties have about a 2% share. A combined MS + Yahoo would be good for getting advertising dollars. But as far as mindshare goes, YouTube's still top dog.

Content deals
Off the top of my head: new content deal with UMG to allow user uploads of music/video; recent deal with Belo to enhance local TV coverage; content deals with AP, CNN, and some sports leagues. Many more that I'll fill in later.

Video properties
Not counting video.yahoo.com, Yahoo owns vid-editing platform Jumpcut (I originally saw that as an excellent Flickr-like purchase, but don't think the site's going gangbusters by any means). Yahoo also recently announced they were acquiring vid hosting and distro company Maven Networks, which works with Gannett, Hearst, Fox News, Sony BMG, others.

More to come.

p.s. Forgot to mention Yahoo's extensive, if muddled, experience with producing original video content, e.g., Richard Bangs Adventures, In the Hot Zone with Kevin Sites, Wow House, etc. Definitely expertise that MS doesn't have, but the cultures def would need to remain separate.

Joost has a video quality problem

Jackson West at NewTeeVee points to a quick side-by-side comparison of Joost and DivX's video quality, and Joost disappoints. Perhaps not too big a problem, since consumers seem to still be willing to abide lower-quality for free, over-IP video. At least for now.

Mark Cuban, Bram Cohen, and the cognitive dissonance of beneficial piracy

When broadband pundit Mark Cuban called Bram Cohen's Bittorrent doomed to failure the other day, a blog-style donnybrook broke out and a conversation that had originally concerned bandwidth caps devolved into a shouting match about the real issue at the heart of all P2P convos: Piracy.

To set the scene: Cohen represents a P2P business model, one that, despite forthcoming retail stores that will do legitimate business, is rooted in piracy. Cohen isn't a content creator, and P2P means new markets and new opportunity. Cuban, on the other hand, despite his reputation for being a hot-headed maverick, represents the traditional corporate mindset. He owns several content businesses and, while he's certainly no luddite, understands that piracy is perceived as a big problem in boardrooms across America.

Cuban: "I searched for Prison Break. Lots of torrents. None of them Legal. Is this what Fox had in mind when they signed up with you? They wanted people to find bootleg copies of their content? I”m a big shareholder in LionsGate. Is this what they had in mind when they signed with you ? Im sure if I call the CEO, they would say it wasn’t."

Cuban is right. The Bittorrent protocol can't escape the stigma of piracy. Cohen is also right. Internet users have embraced the technology, and media companies would do well by themselves to embrace it sooner rather than later.

But the big problem facing Bittorrent is the cognitive dissonance of beneficial piracy: There is a tension between the negative emotions that come with immediate financial injury -- seeing that there are pirated torrents of "24" available right now -- and the positive, rational understanding that pirated content leads to increased exposure, long-term interest and, eventually, increased sales of merchandise and secondary goods.

In other words, immediate pain is easier to understand than postponed pleasure. And when you, as a CEO, answer to a board that demands rational, numbers-based analysis of present problems, it's difficult to sell them on the theoretical possibility of long-term gains.

Of course, that "theoretical" qualifier for beneficial piracy is gradually being replaced by arguments based in data. Studies commissioned by both CBS and NBC, for example, recently revealed that making content available for free on the Web increases the reach of their television shows.

Bittorrent is an amazingly successful protocol, at least in terms of adoption by users. Its success as a legtimate business, however, may hinge on content companies becoming more comfortable with the idea of beneficial piracy.

Morgan Stanley: We Ain't Even at the Top of the Video Monetization Iceberg

Morgan Stanley's Mary Meeker gave her annual presentation at the Web 2.0 conference in San Francisco this week. I couldn't make it to the conference this year, but her presentation slides are available online. This year, Mary's talk was all about video.

Some highlights from the presentation:

60% of video traffic is probably via peer-to-peer (P2P) file-sharing networks, and thus not monetized (see graph at left). The infamous P2P Bittorrent protocol accounts for 30% of ALL traffic on the Web.

Partnerships and monetization of video are growing. Witness the deals announced from ABC, CBS, FOX, the NBA, Sony, Warner, Universal, Google and Yahoo.

Meanwhile, search has been the growth engine of the Web. 4% of online advertising went to search in 2001 vs. 42% in 2006. Banner ads suffered a corresponding drop, from 62% to 26%. Meeker asks if video could be the next growth engine. I would say yes, except video won't be the engine -- it'll be the superfuel that powers the engine of search. While video is very popular on aggregators right now, it will become even more popular when appropriate results can be returned through search. Companies like Blinkx and Podzinger will help make this happen.

Meeker also said that the growth in minutes spent visiting a site is outstripping the growth in page views (see graph at right). In other words, people are spending more time on fewer pages. Video-sharing site Metacafe is riding this trend -- they're only serving the most popular videos, and their time-spent-on-site stats are almost as impressive as YouTube's.

One other thing Meeker touched on: Broadband adoption abroad is increasing at a fantastic pace, while adoption here is waning (relatively). Thus, it stands to reason that the next big video players will take advantage of the Asia Pacific economies and audiences to achieve scale.

Remember the good old days, when people knew stuff?

Reporting on the Streaming Media West conference is like being embedded with the 101st Greek chorus division, which only repeats one phrase: "I don't know."

What's the business model for online video? I dunno. What's the right way to advertise with video? I dunno. Who's on first? Dunno, dunno, dunno. The bottom line? There's no bottom line.

So for those of you hoping that Google's purchase of YouTube would bring some order to the online video marketplace, think again. The acquisition may justify the business value of video aggregation (at least to some), but it doesn't begin to answer the pressing questions about advertising, syndication, sales and search that the industry is grappling with now.

First, online video has a findability problem. Finding distributed video is much more difficult than finding Web pages. When you do a Web search, you're searching for text on a page. But when you search for video, you're searching for media described by text. If those descriptors -- known as metadata -- aren't there, or if the metadata is incomplete or innacurate, your search is going to return bad results.

Heck, even if the metadata is good, the search engine can't interpret whether you want professional, first source content or amateur analysis.

A simple search for NASCAR (what? I'm from Virginia) on Google Video returns an EA sports commercial, crash footage, and an amateur talk show. A similar search on Yahoo returns two music videos, some amateur footage, and an ABC news show.

In an effort to solve this problem, video search company Blinkx analyzes contextual information surrounding a video (the video en situ, as it were) and then apply descriptions to the video.

Another promising company is Podzinger, which arguably has the best speech recognition software. Then there's Motionbox, a video-sharing platform experimenting with "deep tagging" of video to help you find a precise moment in a long video.

Beyond search, there are other business needs in the online video value chain that need to be satisfied. National and global advertisers like Avenue A/Razorfish, for example, need to buy inventory in large chunks. And despite the success of YouTube, which serves 100M+ videos per day, there aren't a lot of sites which can offer a large audience.

"Agencies need to operate on scale," said Hunter Walk, product manager for Google Video, in response to a question about amateur video producers disintermediating large portals. "So small buys on small sites won't work."

Advertisers also face roadblocks from different advertising methods on different sites -- pre-roll, post-roll, adjacent banner, etc. Avenue A/Razorfish director of emerging platforms Jeremy Lockhorn says they're also hemmed in by both the lack of inventory online and questions regarding the frequency of repeated video ads. By way of example he mentioned the ABC media player, which can irk viewers by showing the same 30-second advertisement multiple times during a show.

Closely related to the unknowns in advertising are the unknowns on the sales side of the equation. Video syndication is a very popular form of content distribution these days, but most sales teams are compensated based on traffic to a destination site, not traffic to an external destination.

And then you've got the problem of user-generated content and Hollywood. It's a new romantic ideal that an unknown like Brookers or Ask A Ninja will be discovered online and handed a plush compensation package from a studio. But unfortunately, the question of who owns the content and who gets a cut of the profits is still unanswered. Every service which distributes a video obtains certain rights.

"The person who shot the content owns it, obviously," said Chris O'Brien, CEO of Motionbox. "We have some rights too, though, to store it and tag it." Motionbox also submits some of their content to NBC, "but NBC has their own set of rights that they claim on the content."

All these unknowns just skim the surface of questions facing the online video marketplace. The wild west days of video sharing may be ending, but there's still plenty of dust yet to settle.

Brightcove Dusts Off The Feed Room's Biz Plan from 1999

Video-enabler Brightcove unveiled today the Brightcove Network, a video delivery and monetization service for small video publishers. The network is something of a departure from Brightcove's business model thus far, which has been to provide Web video services for Warner Music Group and other large companies.

Another video-enabling player, The Feed Room, tried to do this back in 1999/2000. When I first met CEO Bart Feder, he told me how the company tried the aggregation and publication play for a while, but found there was a larger market in providing the backend power and pipes. And now that video-sharing sites are a dime a dozen, Brightcove's network seems like it's late to the party.

Of course the online video market has changed a lot since then, and Brightcove has updated the old aggregation play with modern tricks. Plus, the company has over $20M in funding, IAC chairman Barry Diller is on the board, and Jeremy Allaire, the former CTO of Macromedia (the company that brought Flash to greatness) is the co-founder. They've got a lot of deep pockets and some good partners and connections. As I mentioned last week, the company recently partnered with Warner Music Group to supply the video feeds for their artists' Web sites.

The Brightcove Network deets: Anybody can start a video channel, manage that video on their own site and syndicate it on the Brightcove Network, and split ad revenue 50/50. (Publishers get 70% of revenue from pay-per-download videos, including those on partner site AOL.)

Here's a video from the recently launched Horror Channel:

Catching Up: Video Searcher Blinkx Hooks Up with Microsoft

I missed this on Monday: Video Search site Blinkx partnered with Microsoft to provide video search technology on Microsoft's Live.com. Below, a looooong Google video roundtable discussion about vertical search trends that includes Blinkx co-founder Shuranga Chandratillake, and my analysis of the Microsoft deal afterwards.

Blinkx is a powerful video search engine, and they appear to have better video search results than Google. Blinkx already powers video search for AOL and Lycos, and indexes video from big media sites across the Web. Their secret search sauce helps them index not only metadata about a video but the speech in the video as well. They don't copy the videos themselves though -- they just hold the metadata. That makes them a great value-added service and, I assume, frees them up to make licensing deals, such as this one with Microsoft.

It's interesting that Microsoft wrapped up a deal with Blinkx on the day that Google acquired YouTube. The greatest benefit Google will provide YouTube (besides deep pockets) is the integration of Google's search technology. By hooking up with Blinkx, Microsoft will try to compete on that level and increase the efficacy of live.com, their new online search and branding destination, that is partially an answer to Google's online services. No word on whether Microsoft will apply Blinkx technology to MSN Soapbox, though.

Ten Newsworthy Events that Don't Involve Google or YouTube

This week has been Google YouTube news non-stop. I keep trying to talk about other things, but every word that comes out is GooTube. Or YouGoo. Or whatever. It's like Being John Malcovich, except I haven't gotten nominated for an Oscar yet.

Anyway, here are five newsworthy events in the realm of online video that happened while you were watching Google and YouTube do the dance of joy.

1. Nielsen is working on a fused ratings system that combines Web and TV. Jeez, doesn't anybody do anything alone these days?
2. Jay Leno debuts a webisode on NBC.com. Putting his best chin forward? More chin than Chinatown? I give up.
3. NBC affilliate stations continue to launch video sections powered by Motionbox.
4. The Hollywood Reporter covers the Mipcom "Festival of the Pirates." So does Paidcontent. One million movies are being downloaded on BitTorrent every day.
5. PBS pushes videos to iTunes. First time on platform for the station. Shows include Antique Roadshow, Nova, others.
6. Mediaweek asks if AOL's Gold Rush is a flop. Let's just say the news of them actually digging for gold was more fun.
7. This made me laugh.
8. Steven Johnson wrote a great article about "The Long Zoom" paradigm. The article's about a video game, but it could just as easily apply to niche online video.
9. The Weather Channel launched a broadband site last week called OneDegree. Difference is, you feel drier.
10. Silicon Valley startup Ning (met those guys at last year's Web 2.0 conference) are experimenting with video. Scroll down this page for the info.

Searching for Better Video Search

The great, delphic Google may be out to index all the world's data, but even the best search engine in the world has trouble indexing video.

Why? Metadata. That's the descriptive information that tells a search engine (or anybody who cares to look) what exactly is going on with the file. A search engine, after all, is blind, and only knows when a file is a video file by it's file extension (and some other things, like file size, associated HTML tags, etc.). So the engine looking for video -- whether it's Google, or AOL, or whatever -- needs more data to categorize the video and return it as a correct result when you search for, say, "dogs in funny hats."

Sites filled with user-generated content, like YouTube or Vsocial etc., don't worry too much about this problem because users provide all the necessary tags. Sometimes a user may provide the wrong tag, but by-and-large video-sharing sites exhibit self-correcting behavior. You might say they exhibit the Wisdom of the Crowds.

But this is a big problem for portal search engines that want to capture video across the Web. For an example, try searching for "ABC Lost" on Yahoo Video. You get a smorgasborg of results, the vast majority of which aren't clips from the actual show. Or, try searching for Grey's Anatomy. You get no results from the full show, even though it's playing over on ABC.com right now. (There may be another reason the shows don't show up on Yahoo -- ABC doesn't want them to. That's a topic for another post.)

To deal with this indexing problem, a host of video search sites have popped up in recent months. One such site, CastTV, was profiled recently in Techcrunch. The video search engine's creators say the engine collects ancillary information about the video file -- what page is it on, what pages link to it, etc. -- and then searches the Web for additional information about the video's topic.

Other video search startups include companies like Pixsy, which hopes to be a white label search engine for media companies, and Blinkx, which offers millions of hours of searchable TV content.

Meanwhile, the big guys have been working on ideas of their own. As we noted a few weeks ago, AOL opened its video search API (application programming interface -- a fancy acronym for "under the hood") to developers in the hopes they will spread the tool across their sites. Microsoft is also steadily at work on improving their new video search service.

VideoEgg Gets Funding

VideoEgg, the video syndication service that recently signed deals to provide several social networks with video capabilities, just tied up $12M in funding from several VC firms.

According to BusinessWeek, the investors include Starbucks Chairman Howard Schulz, Maveron, and August Capital. VideoEgg first received funding last January. In August the company announced they would start inserting ads in about half the videos in their streams.

After about a year of constant buzz, the online video marketplace seems to be churning out a lot of deals and investments. Yahoo's acquisition of Jumpcut was one such, as was Warner Bros' hookup with YouTube earlier this month.

Advertisers are claiming online video ad spots are climbing above TV, and comScore says over 106.5M Americans viewed online video in July.

Advertisers shouldn't be worrying. The market for video online still has a governor on its engine, what with two of the big video sites -- YouTube and Google -- not yet selling pre- or post-roll ads on videos.

GE Invests in Video Syndication Platform Brightcove

In the first of what execs are calling several investments in emerging tech media, GE's commercial finance group has taken a small stake in video syndication startup Brightcove.

In a world where every company is digging for online video gold, Brightcove is selling shovels. Basically, the company is a middleman, providing a way for content owners like Reuters, NBC and AOL  to syndicate their content.  Brightcove inserts ads into streams and distributes the revenue to the content owners and syndicating Web sites. Big competitors include Akamai and thePlatform.

Brightcove was founded in 2004 by Jeremy Allaire, the former CTO of Macromedia (acquired by Adobe last year). The company has signed some pretty impressive agreements in the last year, including a multi-year partnership with the New York Times, a distribution agreement with National Lampoon, and deals with Reuters and AOL. The company also has big name investors, such as AOL and IAC. IAC Chairman and CEO Barry Diller sits on the board. For more info, check out this WSJ article from February.