August 2009

Online Video Sizzles This Summer

Anyone whose got a link sent to them of Susan Boyle’s performance on Britain’s Got Talent or Jill and Kevin Heinz’s Wedding Dance Video knows that online video has been burning up the data streams. Now we have the numbers to prove it. The Nielsen Co.’s July 2009 “VideoCensus” states that online video is way up on all metrics.

The measurement firm recorded a 14.2% year-over-year increase in unique viewers to nearly 136 million. Total streams climbed 31.4% to more than 11.2 billion and average streams per viewer were up to 82.4, a 15.1% gain. Viewers spent an average of about 3.5 hours watching online video in July, a jump of 42.2% over the prior year.

The top site for watching video, according to Nielsen, was YouTube—way out in front with more than 7 billion streams and 104 million unique viewers. Hulu ranked second in number of streams, but was surpassed by Yahoo!, MSN, CNN and Fox Interactive Media properties in unique viewers.

In June 2009, comScore reported record online video viewership, at 157 million unique viewers. Again, Google sites were on top, followed by Microsoft and Fox Interactive Media.

Let’s put those numbers in perspective. This means there are Super Bowl-sized audiences for online video each and every month. Companies would kill to reach an audience of that size… and it’s out there for a lot less money than a commercial during the Super Bowl. By the way, more than 157 million viewers watched an average of 135 videos during the month of July. Talk about growth!

There are some qualifiers to these numbers. ComScore attributed massive June viewership to unusual media events that became online video phenomena, including the memorial service for Michael Jackson and the civil unrest in Iran. Such major events have been important for online video viewing in the past, with many users checking out news videos during the workday, notably the January presidential inauguration.

Even with those qualifiers it’s obvious that the computer is becoming the new TV. Sure it has a smaller screen but as computer monitors get larger and more mobile, its only a matter of time before the computer is just as important for media distribution as the TV. If you don’t start developing online video for your product, service or pleasure now, you might find yourself falling behind in the marketing race.

* Info courtesy of eMarketer and Nielsen

Are Paid Content Models the Future of Online Video?

There’s been a lot of in the media business lately about paying for content online. With Disney, Fox and NBC’s investment in Hulu earlier this year, paid content models are all the rage. Chances are it’s not going to happen anytime soon. A new report from eMarketer says that consumer’s willingness to pay for content online is about as likely as J.D. Salinger writing another novel… that’s not going to happen.

“It is difficult to imagine the public tolerating a return to paid content for video genres that are currently ad-funded,” said Paul Verna, eMarketer senior analyst and author of the report.

There are some areas where consumers will pay online. They’ll pay for feature films, which is not surprising considering it’s a transaction-based business. You want to see a film, you enter your credit card number into iTunes or Netflix and voila… instant movie. Consumers will also pay for live sports programming with baseball on MLB.com and Mixed Martial Arts (MMA) matches being two notable examples.

The most likely evolution would be that Hulu and YouTube charge a fee for premium content (movies and sports) and leave the rest of their videos (TV shows, news, humor, user-generated clips) in ad-supported formats. But given that most consumers believe the old adage, “Why pay for the cow when you can get the milk for free?” don’t expect the change to happen that quickly.

Whether paid or free, the business of online video is booming. Audience levels and stream counts are climbing dramatically, while age range demographic of viewers is expanding. Slowly but surely, the content mix is evolving from short, home video clips to long-form content such as TV shows and feature films, according to eMarketer. That’s good news for everyone.

Virtual Clutter Coming to a TV Near You

Reminding me of a scene out of Rollerball or Demolition Man sports teams continue to find ways to improve their bottom line by cluttering up their product. Some have been around for years (stadium signage and commercial tie-ins) while others have emerged in recent years (in-game promos, sponsor “bugs” in the corner of the screen) but the biggest innovation in raking in more moola are the virtual ads.

You’ve seen them if you’ve watched Major League Baseball, NASCAR or the National Hockey League. They’re the high-tech ads digitally inserted inside game coverage and only visible to viewers at home, not fans at the arena, raceway or ballpark. At first they were a curiosity; now they’re becoming an annoyance as more teams find ways to cram more ads into their games.

This week, the NHL discussed how to use virtual ads during the season with its national TV partners in the USA and Canada. At least four NHL clubs are working with their regional sports networks to sell virtual ads next season: the Colorado Avalanche, New Jersey Devils, New York Islanders and New York Rangers. Expect more to climb on board in the coming months.

Teams already have their pitch down for these intrusions. With viewers flipping channels, marketers want to stick their messages “inside the games,” rather than around them during commercials, said Tom Philand, senior vice president at Altitude Sports & Entertainment, which airs Avalanche games. Virtual ads are not only “zapper proof,” studies have shown that such a sign is more than twice as likely to be recalled as a 30-second spot.

What do fans think of this? The Rangers and MSG Networks said they got only a “handful of complaints” after placing virtual ads for Subway, New York Life and iO TV on the glass behind the goalies in several game telecasts last season. Sponsors, however, don’t completely agree. Tony Pace, Subway’s chief marketing officer, said “Some viewers thought it was so visible it detracted from their view of the game.” Really? You think so?

Personally, I found them to be yet one more distraction detracting from my enjoyment of viewing this sport, although my friends would say watching hockey on television is hardly enjoyable. As virtual signs continue to grow in importance I wonder where it will stop.

The NHL will likely lead us further into this commercialized hell. Having placed advertising on everything it can, from the arena, ice and boards to the curtain in front of which coaches and players give interviews, they’re not one leave any revenue stone unturned. It’s just a matter of time before they go the route of European teams and have ads on uniforms as well.

I don’t know about you but I’m sure this multi-sensory overload will eventually drive me away from spectator sports and into a nice, quiet, happy place free of advertising noise. Curling anyone?

ESPN to Employees: To Tweet or Not to Tweet

Although the staying power of Twitter is still up for discussion, some media companies are cracking down on their employee’s use of the social networking tool. First to lay down the law - ESPN. The Worldwide Leader in Sports drew the wrath of some of its employees yesterday when it issued a set of formal guidelines limiting their use of social networking.

“The hammer just came down, tweeps: ESPN memo prohibiting tweeting info unless it serves ESPN,” Ric Bucher, one of the network’s NBA analysts, wrote to followers of his Twitter feed yesterday. ESPN’s Kenny Mayne followed with a great analogy: “was informed 2nd hand of Taliban-like decree against further Twitter.”

According to a memo issued by ESPN, the “first and only priority is to serve ESPN sanctioned efforts, including sports news, information and content.”

The guidelines prohibit “personal websites and blogs that contain sports content,” and talk about internal policies, a relatively standard practice for any media company. But they also aim to define when and what employees are allowed to Tweet about, including sports. ESPN’s guidelines go on to say, “If you wouldn’t say it on the air or write it in your column, don’t tweet it.”

What brought this about? Two reasons. One, it seems that the network that routinely broadcasts athletes’ Twitter updates on SportsCenter is getting concerned that its talent is getting off-message.

The other reason is one of protecting an investment. Turns out that ESPN is working on a platform that will allow it to publish its employees’ Twitter and Facebook entries simultaneously across “ESPN.com, SportsCenter.com, Page 2, ESPN Profile pages and other similar pages across our web site and mobile platforms” in the Fall. The last thing ESPN wants is indirect competition from their talent which might dilute the new content.

To show how serious they are about this the network warned, “if ESPN.com opts not to post sports related social media content created by ESPN talent, you are not permitted to report, speculate, discuss or give any opinions on sports related topics or personalities on your personal platforms.” Failure to follow the guidelines could result “in a range of consequences, including but not limited to suspension or dismissal.”

Wow! Seems heavy handed to the Media Mogul. And we wonder if it hurts their ability to be the first to ‘break’ a story. Twitter’s biggest strength is the instantaneous communication to an audience. It will be interesting to see if the media giant can wrest control of spontaneous tweets away from its employees. Stay tuned.