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The WAVE Report
Issue #0714------------------11/19/07 |
The WAVE Report archive is available on http://www.wave-report.com
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0714.1 Podcast and New Media 2007
0714.1.1 From the Conference
0714.1.2 Keynotes
0714.1.3 Interviews
0714.1.4 From the Show Floor
0714.1.5 WAVE Comments
0714.1.6 Impacts of Early Market Emergence
0714.1.7 Staking out a Market Position
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0714.1 Podcast and New Media 2007
By John Latta
Ontario, CA
September 28-30, 2007
This is the 3rd conference on portable media. It is focused on the independent producers of content which is distributed over the Internet and is downloadable. In spite of the use of the term Podcast this event went well beyond the association with the iPod. In fact, many want to distance from the iPod with all that this associates in terms of user demographics and a single device.
The Podcast and New Media event was excellent in that it highlighted the state of the market, the rapidly changing environment and early applications of downloaded media.
0714.1.1 From the Conference
Market Status of Video
It is estimated that online video was from $300m to $400m in 2006. The current view of the market segments include.
Ad agencies/ Online Marketing
Companies or agencies which need to create and position online video
Networks
Companies which are providing online video programming similar in production quality to commercial
television.
Independent Video Products and Production
Individuals or companies which produce online video content.
Infrastructure
Hardware, Software and Services which make online video possible or more efficient
At the conference the discussion centered on two drivers in this market:
Business and Enterprises
Video is seen as another medium of communication with customers, employees and others. Many regard the
ability to create content for specific audiences as important as web presence. In fact, video is now part
of the overall online presence. Virtually any company can create their own channel.
Programming
Online video programs can have be an analogous with television channels which reinforces the need for
serial content. Some content is being done for entertainment, other as information and even for
social purposes. The emerging networks, such as Revision3, provide examples of the breadth of content.
Online video allows us to forget about the notion of 200 channels over cable but to go to 3,000+ channels. Just
because the content is on the PC or portable device today is only a current limitation. Online video content will
eventually go to the television in the home.
In all the meetings which WAVE Report had, the state of the online video market was described as embryonic. The market is moving very quickly and no one has an idea where it will end up.
0714.1.2 Keynotes
The first keynote was an interview with Howard Lindzon of Wallstrip. This is a financial program which has a format similar to SNL. The intent is to bring humor and light content to stock, companies and investments. This began as a side activity to Howard’s primary responsibility as an investment advisor in his company Lindzon & Associates in Phoenix, Arizona. Wallstrip hired creative talent and the key personality is Lindsay Campbell, a professional actress. The show has been so successful that it was recently sold to CBS for an estimated $5m.
http://www.wallstrip.com/theshow/
Jim Louderback, CEO, Revision3, is a programming network. The intent at Revision3 is to bring video content to as many eyeballs as possible. Where and how it is being watched is up to the viewer. The model is to create television like shows. The notion of a podcast has outlived its usefulness. No longer is video associated with a single delivery device.
Revision3 is seeking to provide shows for the 18 – 35 age group which has abandoned traditional media, including television. But the development of video on the net is very early. Our programs are medium form from 30 – 40 minutes in length. We are also going to live shows, in part, as they are less expensive to produce. Most are done in our studio but there are programs now being done on the road.
There is a flight to quality with the goal being HD, however, the infrastructure will not support this yet. It is extremely important for audio to be good to excellent. If the audio quality is poor, irrespective of the video, viewers will shut it off.
The goal of Revision3 is ½m views a month. Today, if a show has <100,000 per month consistently it is ended. The company will be more than just a show producer – it is to be a media company with Web, Blog and more. With VC investment we are able to expand our viewer base over the next 12 – 18 months.
Early on we had a paid model where these viewers could see a show early. But with increasing advertising Revision3 is moving to an all free model.
Revision3 has a major advantage over traditional programming which is usually carried via satellite. Our costs for broadband distribution are much less.
One area which is important to online video is to have sharable video. We also cannot rely on iTunes for a presence. One of the biggest challenges we face is – how can an individual locate content?
Our current competition is On Networks and Next New Networks.
http://www.nextnewnetworks.com/
0714.1.3 Interviews
WAVE Report spoke with Tim Bourquin, Founder, CEO, TNC New Media, the producers of Podcast and New Media 2007.
Two years ago at the first conference we were trying to figure out what the term Podcasting meant. This year we have moved to the next level. There are compelling reasons to use online video. We have found a voice in the industry.
The future is one where online media will compete with more traditional media, including television. Right now most of the competition is between online media companies, this will change. Online media will go to traditional devices – that is, the television. As an industry we will have the same level of success as NBC. Right now the traditional programmers beat us on production values but this will change. Equipment prices are declining and this favors online. Further, most programming sources are gate keepers of the viewer’s time, except when the viewer owns a TiVo. But online can be viewed anywhere any time. We are headed to a future with 3,000 or more channels.
Side note
This has interesting parallels with the content aggregation which John Malone sought to gain acceptance in the early
days of the cable industry. Malone energized the industry in 1992 at the Western Show by predicting a world of 500
channels by 1994. It took much longer for this to materialize but a world then, of channels without limit,
was hard to realize.
The Podcast and New Media event is focused on the independent creator of content. At the same time we are seeing corporations begin to participate at this show.
0714.1.4 From the Show Floor
WAVE Report spoke with Tim Kauffold, Director of Business Development, oneupweb. Our company is focused on supporting mid-sized companies and organizations in the use of the online market as a key element in their marketing and presence. Companies realize that online video is important but the early state of the market has them asking for assistance. Podcasting is hot and many companies are asking how to best use this medium. We have a studio for production but the focus of many of our clients the need to develop a strategy to use the medium.
Our focus is topic based and this relates to how consumers will seek information. At the same time our clients are asking – what is the ROI, and we can help them by tracking the results of the new media.
Many of the shows we help produce are serial and range from 4 to 8 episodes. This builds audience. The design of the content is driven by the message, audience and corporate intent. A typical program is 15 minutes. One of the objectives is usually to drive the viewer to the web site. We help our clients build a strategy around podcasting and its use as a broadcasting medium. We also break away from the bubble of iTunes.
This is an embryonic market and we frequently call it the Wild West internally. At oneupweb we believe that this is as important at the web was originally and it will take off faster than the web originally did.
Mark Rotblat, Director of Marketing, tubemogul spoke with WAVE Report about his company, which he helped find with 2 other individuals. This is an outgrowth of their work together while attending the Business School at UC Berkeley. tubemogul has been operating since late 2006.
There are two services: video distribution and video analytics. These are currently free with plans for premium services. Videos can be submitted to the company and it will post them on one or more of 15 video sites on the Internet. These include: dailymotion, metacafe, revver, brightcove, myspace, imeem, blip.tv, veoh, crackle, YouTube, Yahoo Video, AOL Video and Google Video. The most significant service is the measurement of these videos. The tracking service will support both the video submitted and other videos. This is invaluable for quantifying market response and is used by ad agencies and many others. Many companies at this event are using tubemogul.
Nokia was showing its N series phones which are can play back podcasts.
http://europe.nokia.com/podcasting
Adobe was showing the new version of Audition 3, a high end sound mixing and processing software package.
0714.1.5 WAVE Comments
On Line Video is Omnipresent
YouTube broke the online video market open but the Podcasting of audio and video content began portable media.
YouTube is seeing 100,000 new video downloads a day. These are signs that video has gone mainstream on the Web.
The development of high quality online video content is a sign that serious video programming is here. For example, at
this event, at least 3 online networks were discussed. Nokia was showing its N Series phone which can receive
podcasts. But what is most significant are the new forms of creative content. This varies in length from 90 seconds to
40 minutes and covers a broad range of topics. The model for online video is narrow casting at a granularity not
seen in traditional media. When the threshold of viability is 1/2 m hits a month this is much lower than what cable or
broadcasters could live with. Thus, we are likely to see a flood of new and creative content that appeals to specific
audiences. Also important, video is just one component of the plethora of means of online presence. Talks linked
video to social networking, blogging, web presence and more. Interactivity was only passingly discussed but much
deeper links with the audience is assumed by most presenters. As was stated many times, we are but at the
beginning of a major transformation of video as a media form.
In all this discussion the PC was hardly mentioned. Most of the attendees seemed Apple users but again the machine is
less important than a web presence. Being on the web via a browser is the most important means of delivering content
and watching it. Another important expectation is that online content will go to television sets in the home. How
and in what form of transport was not discussed – it is assumed it will just happen. As online video pushes to HD
content the large screen television in the home is the best place to view it.
In spite of the fact that the emphasis was on content similar to what networks produce or what the enterprise
needs there are more possibilities. This is personal video. We have seen this with the Cisco Telepresence product. The
shoe is waiting to drop on the consumer market based on the current and future state of a digital infrastructure.
It is important to note that Net Neutrality plays a role in the development of this market. Online video has no home in
traditional media ownership and distribution. Thus, the carriers, be it cable or telco, have no lock on the content
rights or distribution. Without this link they cannot charge for it, maybe. Thus, a central argument in Net
Neutrality is that the broadband services providers would not be able to discriminate in pricing based on content or
source of content. When the available choice from online swamps traditional media this provides an advantage to
online. It was stated that online video is attracting the 18 -35 age group, which has also left traditional media.
This is a key advertising demographic. All of this poses important economic issues. Can the broadband carriers
charge a premium for online video when they do not control the content? If they can, this could well have the effect
of limiting its value and thue truncate the growth of online video.
0714.1.6 Impacts of Early Market Emergence
Online video appeared on the WAVE Report radar screen a year ago at VON. Enormous progress has been made.
Here are some of the data points.
There are at least 3 online video networks;
Greater acceptance in the enterprise of online video but it is still early in the adoption cycle;
An ecosystem is developing. Today’s focus is around those that support producers of content;
The creative forms of content and with early use of audience metrics to gauge the impact of this content
on the audience;
Early investigation of the business model which is largely driven by advertising;
Indications that this may be a significant business supported by advertising; and
The realization that online video is an opportunity to create many new forms of content, especially as it is
linked to other means of online presence.
But much remains to be done.
The ecosystem, especially in the support services, is not well formed;
Getting access to online video is immature and haphazard;
Video search is not yet viable;
The home infrastructure for viewing anywhere is immature; and
The business models have not been validated by profitable companies.
All these factors are reason to seize market share early on. In a chaotic early market, positions are to be had by
winners.
0714.1.7 Staking out a Market Position
WAVE Report came away wondering where are the major industry players? Adobe stood out with its package for the
audio sector: Audition 3.But the players such as Intel, Microsoft, Yahoo and HP were missing. One only need to
recall what was present at VON last year to realize how much has changed.
Online video is a market opportunity waiting to be gained or lost.
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