moving media
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TRANSCRIPT
TAPE – Preservation Workshop
Digital Business Models – The Emerging Online Video Marketplace
Simon Factor,
Moving Media – Digital Video Labs
Dublin – Los Angeles
+353 87 6831176
Structure of Session• Section 1: Archives Online – 20 Mins
• Digital Markets – Enablers and Effects• Longtail – the decline of the Hit• Examples of Projects: Getty Images/Babelgum, Cousteau/Google, Pathe Archive Online
• Section 2: Online Video Market – 20 Mins• Global view of online video consumption 2006 – 2011• Who is watching, what are they watching?• Advertising revenues for online video, current and projected for various markets
Break for Discussion – 10 Mins
• Section 3: Online Video Platforms – 20 Mins• What kind of platforms exist, what use are they to an archive?• Who are the key players and what differentiates them?
• Section 4: Revenue Generation• Modes of revenue generation• Examples of online advertising products• Online Advertising Technology• Current Market Rates and Examples
Section 1: Archives Online
Digital Markets
Enabling Forces:
• IP Networks – The Internet• Audiovisual Compression
Technologies• Conditional Access Technologies
Result: Disruption to traditional business models
The Changing Business Landscape
• Disruption to tradition models• Linear – Non Linear (on Demand)• Physical – Dynamic (file based
products)• Disintermediation of physical
distribution and transmission channels
The Changing Business Landscape
• Lower cost of delivery to end user• Alternative lower barrier to entry for
smaller budgets• Niche interest channels provide clear
alignment for advertising products• User generated content – a deeper
engagement with the audience• Touch points within a digital archive
are a source of intelligence
The Longtail
• Massive Choice equals Massive Demand
• An economic model for digital businesses
• The decline of the HIT• Many lower value items = 1 high
value item• Exists in many businesses –
particularly relevant to digital media
Why call it a Longtail?
Q
uan
tity
of
Vid
eo d
ow
nlo
ad
s
Mainstream / Hit Niche / Specialist
An Example of the Longtail Model
Rhapsody 1.5 Million Track Inventory - Wal Mart 55,000 Inventory
0200000400000600000800000
1000000120000014000001600000
1 2Rhapsody Wal Mart
Ite
ms
Rhapsody Sales Total
40%
60%
Getty Images on Babelgum
• 700 items from the Getty Archive NY• Public Service Shorts/Three Stooges• Digitised to Quicktime MPEG 4 at MM
Studios Los Angeles• Source 1”, UMatic, SP and Digi• Terms 1 Yr paid license / revenue
share
Cousteau Archive on Google
• Location specific shorts • Part of Google Oceans project• Source material 16mm, 1”, 2”,
UMatic, BetaSP• License based upon revenue share• Development of unique programming• In negotiation (2007)
Pathé Archive Online
Pre Project online video use• 100 users per month• 7 hours of material viewed per
month
• Project - 3000 hours digitised• 1,000,000 visitors in first month• 7000 hours of material viewed
Section 2: Online Video Market
Key Notes on Online Video
European Web TV Use Spreads
• Nearly half of European broadband users watch TV previews or full episodes online, according to Motorola research.
• The study found that six in 10 French broadband households watched Web TV. About half of Spanish homes watched TV online, as did 43% of UK households.
• Almost two-thirds of Europeans under 25 watched TV shows online. Only 30% of those over 55 did.
• The study also revealed that there were two or more PCs in 64% of UK households. About six in 10 German homes had two or more PCs, as did 54% of French households.
• Karl Elliott of Motorola said that "people downloading video want choice, which is why there is such a change in the marketplace."
• Suggesting that watching TV online offered more options than traditional TV, Mr. Elliott added that "200 channels [are] not enough because consumers want to take control too."
Who is watching?
•Men view video more frequently
•Younger audiences are the most frequent users
•Spain and France show the highest use of Online Video in Europe
• 29% of people access online video frequently
•Another 38% have viewed online video but are not frequent users.
Who is Watching?•Online video use is higher in Europe that the US - +10% for both sexes
•In the US as in Europe Men are watching more online video
•76% of US web users <30 are watching video
•Correlation between education and online video use
What are they Watching?
•News is the most popular form of online video content for older viewers
•Music videos most popular with younger people
•Spain records a high level of movie watchers, Germany low – different attitudes towards copyright?
What are they Watching?
News content is highest overall in US
US market rates high for educational use (not polled in EU figures)
Comedy and Music are next to News in popularity
Overall US and European appetites are similar.
What’s it Worth?•Revenue generated from the paid download of video content.
•Target EURO 244 Million By 2009
What’s it Worth?•Online Advertising is a growing business
•Close to 8 Billion spent in Europe in 2006
•Video is taking a significant share of online ad spend in 2008
•Overall ad seeded video will generate more revenue than paid downloads
What do people do with video?•Very few will pay for video – only 7% of users in US
•Young people use video more dynamically, by rating, posting and uploading twice as much as adults 30+
•Younger people are also more inclined to watch video with others
Section 3 - Online Video Platforms
Exploding Marketplace!
Online Video Services
• Destination Sites• UGC - Youtube, Daily Motion, Revver, Google Video• Online ‘TV’ – Hulu, Babelgum, Gofish, Joost
• CDN Networks• Akamai, Limelight
• Video Search• Blinkx, Veoh, Truveo (aquired by AOL)
• Aggregators• WeShow, Feedbeat
• Publishing Platforms• Brightcove, The Platform
General Differences• Peer to Peer Sites
• Pro: Lower cost of infrastructure• Con: Requires massive subscriber base• Need to download player – barrier• Walled Garden – content is not distributed to other points of
contact• Streaming Sites
• Pro – Content protection• Con – high cost of streaming infrastructure• Bandwidth limits quality
• Download Sites• Pro - Lower bandwidth cost, can be throttled• Pro - Can deliver higher definition content• Con – not realtime, content is being copied – goes wild
• Aggregators• Index video – host only metadata, link to video on source platform
Use to an Archive?
• Can limit capital expenditure in video delivery infrastructure for public access projects
• Have scale to deal with flash demand• Have advertising and revenue sharing
systems in place• Will pay for content• Can increase visibility of archive material –
Video SEO
Video Streaming Sites
•YouTube has massive market share
•In many cases myspace pulls from other sources such as You Tube
Site Example - Babelgum
• High quality encoding
• Niche interest content channels
• Peer to Peer• Player Download• Content distributed
under (paid) license• Advertising share
with content owner• Ad types, flash
overlay
Tech info: 500kbps MP4 H.264
Mono Audio @ 32khs/32kbps
High Res version archived at 5Mbps
Site Example – YouTube
• No encoding standards
• UGC – wide ranging• Central streaming
architecture• Adsense – Google
Adwords• Advertising share
with producer channels
Flash Player 9
Input formats vary/transcoding applied
Site Example - Hulu
• CNBC/NewsCorp• High quality encoding –
HD Channel• Mainstream Broadcast
and Feature Films• Streaming –
Geoblocking for US only• Revenue Share
Advertising• Ads are sponsor
messages >4sec pre-roll
Flash Player 9 @ 700kbps
Stereo Audio at 56kbps
Site Example - Blinkx
• Video Search• Indexing video from
various locations• Creates preview
clips of files from other locations
• Links to external video files
• Proprietory ASR and Image Recognition technology
• Banner advertising
Flash Player 9
Site Example – 4OD• Channel 4 On Demand• 1 month Free• Charge on content
screened +1month ago £1 docs - £1.99 for Features
• Streaming to proprietary player
• Geoblocked for UK/Ireland
• Pre Roll Adverting• 1 - 2 ads up to 25 secs
duration – tend to be television ads
Windows Media Player
410 Kbps
Section 4: Revenue Generation
Cash Cow
The bad news…
• Only 7% of US internet users have paid to download video content
…..and the good news?
Online video is grabbing a significant share of the $½ Trillion international advertising market
In 2010 online video will generate $2.9 Billion through advertising fees in the US alone
Global Advertising Revenues
•Europe is outpacing the US in growth
•Central/ Eastern Europe is growing at close to 20% PA
•EU and US markets subject to slower growth rates but have lions share of market
US Video Advertising Growth
Online video is the drawing large amount of traditional ad budgets
It is a very high growth area, revenues for online video ads have almost doubled in 2006 and 2007
Growth is levelling out at close to 50% to 2010
Sectors of Ad Spend
•Retail and wholesale trade accounts for the highest spend
•Followed by Travel and Hospitality
•Forrester research is close to eMarketer in terms of projection to 2010
•Growth continues at close to 50% through to 2012
Types of Video Advertising
•Standard Ads:
Banners
Skyscrapers
Islands
•Video Ads:
Pre Roll/mid roll/post roll
Overlay
•Combinations:
Roadblocks
Companions
•Sold as CPM units
Ad Revenues and Examples 1
• Wall Street Journal: sells video advertising packages that run across the Wall Street Journal Digital Network, which includes WSJ.com, Barrons.com, MarketWatch.com and AllThingsD.com.
• Video ads offered:15-second pre-roll 300x250 with companion ad, an expandable reminder unit that remains to the right of the video. When a user clicks “Expand", the 300x250 unit displayed during the initial video pre-roll ad will reappear, enabling further user interaction.
• Cost of Ads:$90 CPM
Ad Revenues and Examples 2
• CBS Local CBS Local is a network of sites for the owned & operated CBS television stations that features 23 local Web sites reaching more than 10 million unique users per month. The network delivers more than 8 million monthly video views from more than 350,000 on-demand video clips.
• Video ads offered:15-second pre-roll video sponsor units, companion banner ads with message unit and video sponsor unit (different size ads on site) In-banner video unit (video inside a banner ad) Sponsored video sections
• Cost of Ads:$50 CPM
Ad Revenues and Examples 3
• MySpace
• Video ads offered:Pre-roll,Mid-roll, 5-second pre-roll bumpers. Banners and display ads also live on pages with video
• Cost of Ads:A pre-roll video in the music section of MySpace.com (15-second video with a 300x250 pixel ad unit) : $25 CPM.
About Moving Media• Founded in 2003• Specialise in high quality encoding of audio and video for internet, archive and
broadcast projects• Technical consultancy services supporting digital video access and preservation
projects