“Big media is not as stupid as they used to be. Nor are they as stupid as the internet video proponents want them to be”- The TV Business Keeps Getting Stronger

Good post by Mark Cuban on the tv industry.  Read the whole thing.

These content distribution companies are not competitors to TV as a lot of folks would like you to believe, they are CUSTOMERS of TV show producers. They don’t hurt the TV business, they have made the TV business far, far more profitable. In fact, the competition between all the companies that want to provide content over the internet to your wired tv is driving up the price for content produced for TV.

via The TV Business Keeps Getting Stronger ! « blog maverick.

The explosion of impressions won’t happen on TV

Dave Morgan says that the explosion of page views dragged down online ad prices but ad networks were blamed:

Some people blame online ad networks for dragging down online advertising prices, but Mr. Morgan said ad networks unfairly took the fall: The real problem is that the sheer volume of pages and impressions exploded, thanks largely to Facebook and other social networks. That won’t happen to TV, even if channels and delivery systems continue to evolve and expand.

via Web Ad Pioneer Dave Morgan Looks to Re-Wire TV Advertising | Digital – Advertising Age.

I don’t think that’s necessarily true.  Ad networks were demonized because publishers were trying to monetize their remnant traffic via networks while maintaining premium prices but were unable to maintain the separation.

But I do think he makes a good point about the difference between an online ad impression and a television spot:

“It is not an impression — it is a 30-second, interruptive, attention-owning sight, sound and motion spot!” he said. “That is unique, and they are not putting more spots in the hour tomorrow than they have today.”

So there will be no race to the bottom in television ads.  No wonder Dave Morgan went over to the world of TV and Google is desperately trying to insert itself into that value chain.

Google beta tests RTB for in-stream video ads on YouTube

Old news alert-

Google beta tests allowing Ad Exchange buyers to run in-stream video ads on YouTube using real-time bidding technology.

The scale of this is huge so I’m curious to see how it plays out.

 

To increase online ad rate, make online look more like TV

This is an older article and I barely skimmed it but I want to point out the particular paragraph about monetization:

The web is breaking this [TV] model. Ad rates are much lower on the Internet. Networks can’t collect their fees. Cable companies fear losing our business. Someone has to pay for all that bandwidth we’re using to stream our shows. And Silicon Valley is littered with the carcasses of tech startups (the original Joost and WebTV) that believed entrepreneurial thinking and engineering smarts alone could change television.

via What the hell is going on with TV? – Fortune Tech.

Online media companies have been trying for years to close the gap between online ad monetization and television ad monetization.  But after spining wheels for so many years and making so little progress, they’re now trying an outside the box approach.

If we can’t get advertisers to pay more for online, then we’ll just create an online ad format that looks more like TV and charge TV rates.  Sounds like good business logic to me.  I don’t think any new challenger in this space is trying to lower ad rates.  They’re here to get a piece of the high ad rates.

 

Feedback loops: QVC Finesses Its Multimedia Offerings

Optimizing television content using real time feedback:

“We track new orders per minute in increments of six seconds; we can look backward in time and see what it was that drove that spike: ‘Ooh! Ooh! Show me the pocket of that handbag,’ ” says Doug Rose, who oversees programming and marketing. If sales-per-minute numbers are not high enough, QVC will cut a segment short.

via QVC Finesses Its Multimedia Offerings – NYTimes.com.

The process is quite similar to online optimization.  First you start out with best practices:

Before going on the air, QVC’s “guests” — the products’ makers or sellers — are trained in the “backyard fence” style, which means talking about a product as they would to a neighbor.

Then you kill the non performing pieces and double down on the good ones:

Guests are invited back only if they sell enough; even then they are critiqued like pro athletes. “They’ll do tape reviews,” says Maureen Kelly, founder of Tarte Cosmetics, an upscale line that she has sold on QVC for five years.

 

Content is king: “The real barrier is content and the model necessary to make more of it

“The real barrier is content and the model necessary to make more of it. Cable TV suffered from this same fate early on”, states Broadband Enterprises’ Matt Wasserlauf.

via Where Did VCs Go Wrong In Online Video?.

Buying video ads on YouTube

Combine video and overlay formats with search targeting on a site with pages views at scale and it starts to get interesting:

“Obviously, we think Promoted Videos is a great way for small businesses to tell their stories and reach customers with video in a scaleable way,” said YouTube monetization chief Shishir Mehotra.

YouTube has been working hard to put those tools into place and early signs are it is getting some search advertisers to buy campaigns on the video site. The site keeps a tight lid on revenue, but told Ad Age that “thousands” of advertisers are using self-service tools to advertise on YouTube each day. In the fourth quarter, paid clicks on promoted videos doubled from the prior three months.

via YouTube Looks For Google-Sized Revenue In Video Search Ads.

“We are the second-largest search engine, and yet search is not even the right paradigm for discovering video,” Mr. Davidson said. “We are trying to move beyond it.”

via YouTube’s Quest to Suggest More, So Users Search Less – NYTimes.com.

I recently realized that there are a bevy of sites that are in the same situation as Youtube.  The focus has changed from user acquisition to user engagment.  With a lot of rich content sites, it’s about building better search and discovery tools. As I wrote about this with Hulu, and they, along with their competitors should feel comfort that this is what Youtube is grappling with right now too.

After A Long Year, Spot Runner Launches Malibu Media Platform | paidContent

Some rare news on SpotRunner.  They went through a bit of a meltdown last year and are trying to recover from that.

After A Long Year, Spot Runner Launches Malibu Media Platform | paidContent.

Online Video Shakeout To Get Worse As Buyers And VCs Run For Hills

Nice recap of the state of online video:

more and more bankers and VCs are seeing online video companies seeking to raise cash and in many cases an exit. Online video is a capital-intensive business, with heavy bandwidth and content licensing costs, so the companies scarf down cash. At the same time, very few acquirers are willing to look at big acquisitions in the $300-million-plus range (most deal discussions appear in the below $100 million range).

via Online Video Shakeout To Get Worse As Buyers And VCs Run For Hills.

Video is a space where scale matters so consolidation seems inevitable unless the economics change.