Raja Jasti’s Blog - Renaissance Thinking

February 12, 2010

Veoh: Napster of Video?

Filed under: Entertainment, Internet, Media — Tags: — Raja @ 10:56 am

Online video maket is very challenging, unless you are Youtube or Hulu.

Veoh, one of the earliest online video sites is shutting down. It had the backing of some of the top vcs and media execs. But that couldn’t help save the company. 

Online video is a funny space. Its usage is exploding but it is diffcult to make money unless you have scale and content.

But the thing that seems to have killed Veoh is the lawsuit from Universal Music Group (UMG). So in essense Veoh got napsterized. Here is an exceprt from the blog post from Veoh’s founder Dimitry Shapiro.

Two years ago, Universal Music Group (UMG), the largest music company in the world sued Veoh alleging copyright infringement.  While we made every effort to convince them that we were not their enemy and had not infringed on their content, they pursued a relentless war of attrition against us in federal court.  We eventually prevailed in a decisive summary judgment that has set an important precedent for the entire industry.

Unfortunately, great vision, a passionate team, tens of millions of users, millions in revenues and victory in court were not enough.  The distraction of the legal battles, and the challenges of the broader macro-economic climate have led to our Chapter 7 bankruptcy.

December 15, 2009

Paramount to sell movie clips online

Filed under: Entertainment, Internet, Media — Tags: , — Raja @ 1:26 pm

Via NYT:

Paramount Pictures is creating an online service where it sells short movie clips.

 

LOS ANGELES — Paramount Pictures, looking for new ways to turn its old movies into cash, especially as DVD sales continue to decline, is creating an online video clip service that will allow users to search hundreds of feature films on a frame-by-frame basis.

Feeling “the need for speed,” as Tom Cruise put it in “Top Gun”? Log on to ParamountClips.com, search for the exact video snippet you want and press the checkout button. Within minutes — with the price depending on the type of licensing use you have in mind — Paramount will electronically deliver the selection in the format and resolution desired. Most scenes are available in multiple languages.

The site, to be introduced on Tuesday, is powered by VideoSense, an automated indexing tool developed by the technology company Digitalsmiths. Using proprietary video interpretation systems, Digitalsmiths allows films to be quickly searched by specific actor, line of dialogue, location, genre or product, among other criteria.

Paramount will initially restrict use to business customers — advertising agencies, mobile carriers, foreign broadcasters — that want to license pieces of films for commercial use. The plan is to ultimately open the site to consumers. People wanting to embed a specific scene from “The Godfather” on their blog could go to ParamountClips.com and buy it.

November 19, 2009

Youtube adds automatic captions

Filed under: Internet, Media, Technology — Tags: — Raja @ 9:38 am

This is a cool innovation in online video. Youtube is offering automatic caption feature in its videos.

we’ve combined Google’s automatic speech recognition (ASR) technology with the YouTube caption system to offer automatic captions, or auto-caps for short. Auto-caps use the same voice recognition algorithms in Google Voice to automatically generate captions for video. The captions will not always be perfect (check out the video below for an amusing example), but even when they’re off, they can still be helpful—and the technology will continue to improve with time.

This feature will be even more useful if this auto captions support multiple languages.

October 28, 2009

CBS on Web Video

Filed under: Entertainment, Internet, Media — Tags: , — Raja @ 1:13 pm

Peter Kafka interviews soon to be leaving CBS digital boss Quincy Smith who sees Hulu as a problem,

Peter Kafka: Since you’re going to be advising CBS’s Web video strategy, why don’t you lay out, for the record, where things stand?

The other side of the Web, the side that is most thought of by many journalists, is the threat, of an IP-deliverer of video. And how you turn that threat into an opportunity.

And so from that perspective, as  you know, we didn’t go ahead and say, “OK, we’re going to lock down and stream, with all of our other peers in broadcast, and come up with the same rules, and embed and right-click this and go away.” I’ve never had a beef with Hulu. Hulu’s always worked as a great service. That’s part of the problem.

As a network, we need to make sure that our content is being seen where the dollars matter. And right now that’s on air. Opportunities like TV Everywhere — we’re not putting all of our eggs in that basket, though we are big advocates of it — are ones where you can actually take and expand and extend the television market online, so it doesn’t matter what screen you watch CSI on: What matters is that you watched it, it counts and you saw the ads.

But until that happens, it’s crazy to just stream the shows for zero economics. When in fact you can make a lot more money doing things that are additive and complimentary to the rest of the CBS line. That’s where CBS interactive comes in now.

Kafka: But TV viewers are showing an increasing interest in watch their programs on the Web — whether its from legal services like the Web or illegal torrents and pirate sites. Don’t you need to reach them where they are?

Now, if you really look at those numbers, what they’ll say is [online and offline video are] both growing, right? We’re having the best year ever as America’s largest broadcast network. and I think that 99.9 percent of that — this is the Quote I’ve never been able to get in there — is that’s [because] of the great content that we have. There’s some infinitesimal basis point that’s relevant [to CBS ratings because] we are making sure that when people watch it, they’re more inclined to watch it on television. For now.

Once that solution moves, once those economics move – whether that’s more ads, [higher] cpms, more ad buyers… You and I can say all day long, “We’re sold out on web video. That’s going really well. It’s sold out.” Well, no kidding it’s sold out. It’s a $700 million market. The television market is $120 billion. And of that $700 million, half of those [ad buyers] are spending  90 percent of their time doing Google keywords, not buying online video.

The key is, how do you turn television buyers into video buyers? And that’s where a solution like TV Everywhere comes into play.

And by the way, looking at [Hulu CEO Jason] Kilar’s comments the other day, in Colorado [at an industry convention], he sees that too. He’s more sophisticated on this stuff than most anybody. From the perspective of, he understands that’s where the big dollars are. And so he probably went at it as, “I’m going to aggregate all the people first, so hopefully things like TV everywhere come to us.” From our perspective at CBS, we’ve got to go to them.

I don’t hate Hulu. Hulu’s world class video viewing. What I don’t understand is, why license all that content to something that works that well, that seamlessly, yet — without the economic model around it?

October 20, 2009

YouTube to live stream U2 LA concert

Filed under: Entertainment, Internet, Media — Tags: , — Raja @ 2:52 pm

YouTube is working hard to move beyond its UGC roots. It has struck deal with U2 to live stream the band’s LA concert.

Bono

U2 will play their last live show of the year in Vancouver on 28 October

U2’s concert at the Pasadena Rose Bowl in California on Sunday will be streamed live on video-sharing website YouTube, the band have announced.

Manager Paul McGuinness said that, as the gig was already being filmed, it was “the perfect opportunity to extend the party beyond the stadium”.

Fans in 16 countries, including the UK, the US, Australia and India, will be able to watch the show at 0330 GMT.

It will be the band’s penultimate concert of the year.

McGuinness said that U2 had “wanted to do something like this for a long time”.

He added: “Fans often travel long distances to come to see U2 - this time U2 can go to them, globally.”

However, it is not the first time that U2 have dabbled in live streaming - they allowed fans to watch a Boston date of their Popmart tour in 1997 via Microsoft’s MSN website.

YouTube has also experimented with live broadcasts in the past, most notably with its YouTube Live show, which premiered on 22 November, 2008 with performances from will.i.am and Katy Perry.

The company, which is owned by Google, is keen to expand its business beyond hosting short amateur clips.

I love U2. They are in my top 5 rock bands of alltime. I think this is a big deal for YouTube. If this becomess a success, then it could convince other bands to follow suite.

October 16, 2009

Online video trends

Filed under: Entertainment, Internet, Media, Technology — Tags: , — Raja @ 9:49 am

From VentureBeat’s interview with Jeremy Allier, CEO of BrightCove.

How do you see online video ads changing in the next three to five years? Will we continue to see pre-roll and interstitial ads or more aggressive overlays like YouTube introduced this year?

When you look at online video advertising, marketers are just trying to re-use what worked offline. I think we’re going to see more hybrid video ads that offer experiences and ask users to engage. When ABC launched their catch-up TV services on ABC.com, they started introducing a really compelling format that used Flash to take-over the entire player environment with a rich, engaging and interactive marketing experience. In that kind of model, it is invitational, and the creative opportunities are pretty limitless. However, for media buyers, this is going to involve a lot more custom creative work, so it’s hard for such a format to gain scale.

Right now, pre-roll ads are so prevalent. You can measure it. There are no new assets required to produce them. But we think that as more hybrid experiences catch on, it will lead to standardization and economies of scale.

What are the biggest questions you’re asking yourself about online video at the moment?

There’s a big question as to whether meaningful, over-the-top distribution opportunities in video will emerge. What I mean by that is people are getting access to live, high quality, on-demand video without being dependent on traditional cable, satellite or telecom companies. There’s also convergence. There’s a sufficient volume of premium content coming online and speeds are high enough for HD streaming video. Media buyers are changing their behavior.

So the question is whether these new consumer products from Cisco, Microsoft and Apple that people are turning to instead of satellite and cable will be easily and openly connected to the Internet. Will they be as open as the web? And if that happens, there will be a huge amount of activity that gets funneled toward these outlets.

A second question for me is about measurement. Display and search marketing are incredibly measurement driven. Will there be the same kinds of metrics for video –
statistics that show whether video increases conversions, drives greater customer retention and loyalty, and by how much? We need to same rigor and science of measurement in digital video that we’ve seen from other areas of digital marketing.

Online video advertising is a wide open unsolved opportunity. One of the things that is surprising to me is that Google doesn’t have a preroll/interstitial ad solution for online videos. Such a solution should be part of its adsense program.

July 30, 2009

Monetizing Viral Videos

Filed under: Entertainment, Internet, Media — Tags: — Raja @ 11:39 pm

Here is an interesting business model for YouTube and other video sites. Allow the rights holders to place ads on the videos that use their content. Here is an interesting case study from Youtube.

Last week the world watched in wonder as Jill Peterson and Kevin Heinz’s wedding party transformed a familiar and predictable tradition into something spontaneous and just flat-out fun. The video, set to R&B star Chris Brown’s hypnotic dance jam “Forever,” became an overnight sensation, accumulating more than 10 million views on YouTube in less than one week. But as with all great YouTube videos, there’s more to this story than simple view counts.

At YouTube, we have sophisticated content management tools in place to help rights holders control their content on our site. The rights holders for “Forever” used these tools to claim and monetize the song, as well as to start running Click-to-Buy links over the video, giving viewers the opportunity to purchase the music track on Amazon and iTunes. As a result, the rights holders were able to capitalize on the massive wave of popularity generated by “JK Wedding Entrance Dance” — in the last week, searches for “Chris Brown Forever” on YouTube have skyrocketed, making it one of the most popular queries on the site.

This traffic is also very engaged — the click-through rate (CTR) on the “JK Wedding Entrance” video is 2x the average of other Click-to-Buy overlays on the site. And this newfound interest in downloading “Forever” goes beyond the viral video itself: “JK Wedding Entrance” also appears to have influenced the official “Forever” music video, which saw its Click-to-Buy CTR increase by 2.5x in the last week.

So, what does all of this mean? Despite compelling data and studies around consumer purchasing habits, many still question the promotional and bottom-line business value sites like YouTube provide artists. But in the last week, over a year after its release, Chris Brown’s “Forever” has again rocketed up the charts, reaching as high as #4 on the iTunes singles chart and #3 on Amazon’s best selling MP3 list. We’ve seen similar successes in the past with partners like Monty Python.

July 16, 2009

Youtube upload fee?

Filed under: Entertainment, Internet, Media — Tags: — Raja @ 11:13 pm

Saul Hansell thinks aloud if it makes sense for google to start charging for youtube videos that are not suited for ads.

Gene Munster, the analyst with Piper Jaffray, put a report out Thursday looking at the finances of YouTube, and he makes a suggestion that I haven’t seen before: Google should charge a “nominal fee” to people to upload videos to YouTube if the video isn’t appropriate for advertising.

I don’t know that this is a good idea, and I have a lot of doubts that Google would ever do it in any case. But it’s a provocative thought that’s worth a discussion here on Bits.

Google announces its financial results on Thursday afternoon, and the subject of YouTube may well come up when its executives talk to analysts.

Mr. Munster’s thesis is that Google has choices in how it tries to profit from YouTube. He estimates that the site will earn $323 million from advertising this year, mainly from big brands like Verizon, Disney and even Microsoft. And he notes that the site has started selling downloadable versions of some videos, a second business model.

Still, Mr. Munster estimates that the cost of storage and streaming will be more than YouTube’s revenue, so it needs to find even more pennies in the couch. An important source, he argues, is all those people uploading videos of their babies’ first steps or clips of “South Park.” These are money-losers because no advertiser wants to put commercials on amateur videos, and Google can’t legally sell ads in pirated content. So here’s Mr. Munster’s thought:

We believe YouTube could develop a hybrid model where it charges a portion of users to upload their videos. YouTube could develop technology based on its current Video Identification technology to protect copyrights to determine whether advertising could be sold against the video to be uploaded. If the algorithm deems Google could not monetize the video through advertising, it could require the user to pay a nominal fee to upload the video to the site, which could be based on the average lifetime cost of streaming for a given video.

We recognize such a strategy would change the culture around the site and some users would likely go elsewhere to upload videos; however, we argue that if users were to flock elsewhere to upload videos for free, the scale problem would then become another company’s worry, and that company would inevitably not have the strength of Google behind it.

We believe that if Google ever intends for YouTube to contribute significantly to its bottom line, the company needs to consider additional methods to charge its users, not just advertisers.

There’s no question that if Google did this, it would radically improve the economics of YouTube. It would take more money in and spend a lot less on bandwidth and storage costs for video it can never profit from.

But I think the arguments against such a move are powerful.

It would destroy the essence of the YouTube brand. YouTube has become the Google of video — the place you look first to find absolutely anything that is not the professional content that is on Hulu. A brand that is seen as the icon for an entire activity online is near priceless and not something Google would diminish lightly. Internet video is also such a huge opportunity over the next decade that Google could end up trading future growth for near-term profits.

Charging for YouTube uploads would also damage the Google brand with customers, advertisers, investors and the technology community. Google is still a company that is fundamentally bullish about the future. That is an important contrast to Yahoo and AOL, which keep cutting back services to save money, and Microsoft, which changes strategy on an annual basis.

Google tells the world that it believes the potential for revenue from advertising will do nothing but grow and the cost of delivering online services will do nothing but fall. That’s why it keeps giving away more and more services that used to cost money. To say that it doesn’t see the day when the money it makes from YouTube advertising will cover its costs would be a stunning admission and raise questions about much of the rest of its business.

And then there is the assumption that Google is losing lots of money on YouTube. I’m not so sure the picture is as bad as Mr. Munster and other analysts make it out to be. After all, Google has a huge network and vast data centers built for low costs. One former top YouTube executive told me recently that the site is at breakeven and that its storage and bandwidth costs are far below the estimates that have been bandied around. The former executive didn’t want his name used, so take that information only as a sign that it’s worth being skeptical of estimates about how much money Google is losing.

July 8, 2009

Decoding Hulu’s Success

Filed under: Entertainment, Internet, Media — Tags: , — Raja @ 8:45 am

Saul Hansell tries to do this in his NYT post.

Many people watch free, advertising-supported episodes of shows on sites like Hulu.

Why were so many people in the technology world wrong about Hulu? It was an idea that seemed like a relic of the worst excesses of the dot-com era: a portal for content run by a joint venture of media companies. Could any venture have more going against it?

Portals, of course, are passé in a world where search engines point people to content spread all over the Web. Who needs professional content when users make their own? And if there is anything more clueless than a big media company, the Silicon Valley wisdom goes, it is a joint venture of several media companies bound to undercut each other with crossed agendas.

Yet Hulu, founded in March 2007, is triumphant when most other video sites have languished.

Most recently, Joost has retrenched and its chief executive, Mike Volpi, has left that spot to join Index Ventures, one of the company’s backers. Joost was notable mainly for the pedigree of its founders, Niklas Zennström and Janus Friis, who had quite a pedigree of upending traditional industries. Their free Kazaa file-sharing service continued the work of Napster in undercutting the $15 price for CDs. And Skype, the Internet phone service, continues to cause trouble for the cartel of phone companies and governments that keep international phone rates high.

In television, however, the empire struck back. Here are a few reasons why Hulu has been successful where others failed:

Putting network TV on the Internet is not disruptive

The business model of TV networks is free programs paid for by ads. There is nothing technically or financially revolutionary about putting shows on the Internet. And thus the networks didn’t have a weak spot that could be exploited by a newcomer, as Kazaa and Skype did in their industries. Joost hoped that a twist on Kazaa’s peer-to-peer technology would reduce the transmission costs of Internet video, but the price of bandwidth has fallen so much that this didn’t provide any edge. Ultimately, the networks had all the power to decide which sites could distribute their programs. While CBS chose to spread its content widely, there was nothing that forced NBC and Fox to license their content beyond Hulu, cutting out Joost and the others.

People like professional video and see it differently than user-contributed video

It seems odd to have to say it, but “American Idol,” “Heroes” and the rest of the prime-time line up have many millions of fans, who don’t get the same satisfaction from YouTube (even though many of them turn to YouTube for other entertainment). So not only did Hulu have something people wanted, it had a brand promise that was clear and distinctive: Hulu is where you go for network TV. That’s different from YouTube, which is where you go to watch the biggest collection of video that isn’t on TV. Hulu, in effect, is Amazon.com to YouTube’s eBay.

Meanwhile, the brands of all the other video sites—Joost, Veoh, and so on—didn’t mean anything in particular at all. It certainly helped Hulu cement its position as the icon for professional content that the company built a particularly attractive and easy-to-use site. But I think being first with a critical mass of content and the right brand position was more important.

Portals are a low-margin business

Hulu has proved that there is value in having a portal for video. People go there as well as to NBC.com and Fox.com. That’s why Disney has decided to bring ABC into the venture. But that value is modest compared to the power of the companies that actually create the programming. If a company like Hulu demanded too much of a cut of the ad revenue, a network certainly could pull its programs off and its audience would still only be one click away. That’s why it makes sense for Hulu to be owned by the main networks it distributes. It can help its owners mainly by making it easier for them to find viewers and only secondarily making a profit. Joost and the rest needed to make money, and enough of it to satisfy venture capital investors, by negotiating a large enough share of the ad revenue with the networks.

All this makes me believe that Hulu is an exception that proves the rule. Running a portal is a very tough business and unless you have exclusive access to very valuable content, along with a distinctive brand premise, you are not going to be able to make much money with one.

July 5, 2009

Web Video looks beyond 2 min clips

Filed under: Entertainment, Internet, Media — Tags: — Raja @ 11:25 pm

NYT looks at the evolution of web video from 1 or 2 min clips to larger formats.

“Momversation” on Blip.tv is relatively long-form, with 20-minute shows.

When motion pictures were invented at the end of the 19th century, most films were shorter than a minute, because of the limitations of technology. A little more than a hundred years later when Web videos were introduced, they were also cut short, but for social as well as technical reasons.

Video creators, by and large, thought their audiences were impatient. A three-minute-long comedy skit? Shrink it to 90 seconds. Slow Internet connections made for tedious viewing, and there were few ads to cover high delivery costs. And so it became the first commandment of online video: Keep it short.

New Web habits, aided by the screen-filling video that faster Internet access allows, are now debunking the rule. As the Internet becomes a jukebox for every imaginable type of video — from baby videos to “Masterpiece Theater” — producers and advertisers are discovering that users will watch for more than two minutes at a time.

The viral videos of YouTube 1.0 — dog-on-skateboard and cat-on-keyboard — are being supplemented by a new, more vibrant generation of online video. Production companies are now creating 10- and 20-minute shows for the Internet and writing story arcs for their characters — essentially acting more like television producers, while operating far outside the boundaries of a network schedule.

Some are specifically introducing new shows this month with the knowledge that TV networks generally show repeats and reality shows over the summer.

Yet TV networks get much of the credit for the longer-length viewing behavior. In the past two TV seasons, nearly every broadcast show has been streamed free on the Internet, making users accustomed to watching TV online for 20-plus minutes at a time. By some estimates, one in four Internet customers now uses Hulu, an online home for NBC and Fox shows, every month. “Dancing With the Stars,” the popular ABC reality show, draws almost two million viewers on ABC.com, according to Nielsen.

“People are getting more comfortable, for better or for worse, bringing a computer to bed with them,” said Dina Kaplan, the co-founder of Blip.tv.

Ms. Kaplan’s firm distributes dozens of Web series. A year ago all but one of the top 25 shows on her Web servers clocked in at under five minutes. Now, the average video hosted by Blip is 14 minutes long — “surprising even to us,” she said. The longest video uploaded in May was 133 minutes long, equivalent to a feature-length film.

Dave Beeler, a producer of “Safety Geeks: SVI,” about a threesome who make the world more dangerous as they try to protect it, said the “fallacy that anyone post-MTV has no attention span” is being refuted by the success of original video Web sites.

While online video is not going to replace television anytime soon, it is now decidedly mainstream. About 150 million Internet users in the United States watch about 14.5 billion videos a month, according to the measurement firm comScore, or an average of 97 videos per viewer. Although the Web lacks a standard for video measurement, comScore says average video durations have risen slowly but surely in the past year, to an average of 3.4 minutes in March.

To be sure, many of the most-watched videos are still as short as a song. But YouTube, the dominant video destination, recently recognized the trend and added a “Shows” tab to its pages, directing users to long-form TV episodes and movies. Jon Gibs, a vice president for media analytics for Nielsen, said online video — projected by eMarketer to be a $1 billion business in 2011 — is at a pivotal point.

“Historically it has been very much a clip-based experience online,” he said. “We believe we are moving into a transition period where more of that viewership is going toward long-form video.”

Much of the video innovation is coming from people who — empowered by inexpensive editing equipment and virtually no distribution costs — are creating content specifically for an online audience.

“On the Web, producers have this delicious freedom to produce content as long as it should be. They’re starting to take advantage of that,” Ms. Kaplan said.

What took so long? Tom Konkle, Mr. Beeler’s production partner on “Safety Geeks,” suggested that the shorter-is-better rule reflected limitations in Internet speed and server space. As computer power has improved, the video experience has too.

“A few years ago, three minutes ‘watching’ your computer felt like a novelty; now, it’s as familiar as your television set,” he said.

Two years ago when the comedian David Wain was stitching together the first episode of his series “Wainy Days,” he called Rob Barnett, the founder of the video distribution site My Damn Channel, and asked whether a nine-minute video would seem drawn out. Mr. Barnett deferred to the creator, and an hour later Mr. Wain called back with his mind made up: he would slice the first episode into three parts.

“I bet you, if this phone call happened today, we’d go with a nine-minute piece,” Mr. Barnett said. “I think it comes down to quality winning out over minutes and seconds.”

In short, the storytelling is superseding the stopwatch. “If there’s good storytelling and good production values, people are willing to engage with the content,” said Eric Berger, a senior vice president of Crackle, the Sony video site.

More than anything else, the longer viewing spans may speak to the maturation of the medium itself. Mr. Konkle said that the first kinetoscopes, in the 1890s, were about 30 seconds long, because the format required outrageously long strips of film.

“It was also accepted as fact that 30 seconds made for a good kinetoscope. This is what filmmakers thought the audience could handle,” Mr. Konkle said, drawing a parallel to the early days of online video. “It probably felt like a giant dangerous leap to short films of three minutes.”

Blockbuster movies now, of course, are measured by the hour, not the second; the most popular one last year, “The Dark Knight,” clocked in at two and a half hours.

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