Jan 30, 2015
Jan 21, 2015
Once dismissed as the domain of cute kittens and sneezing pandas, online video is coming into its own, and 2015 promises to be the year it leaves its childhood behind and becomes, if not an adult, then at least an adolescent.
The key to its growth will be the sort of smart data and smart content we highlighted at the 2nd Screen Summit at CES this month, which allows content owners to make better informed decisions about audience engagement, programming and advertising.
The very nature of the medium, which is mostly viewed on connected devices by users who are tied in to their personal social media accounts, means that content owners can easily understand who is watching, why and when. It’s then easy to use this data to target ads, offers and additional programming to the right target audience at the right time.
The power of this smart content is in large part why several challengers are arising to contest YouTube’s hegemony over the medium, first and foremost among them a new MCN called Vessel. Started by former Hulu CEO, Jason Kilar, the well-funded Vessel will have both ad-supported and subscription options for channels hosted by YouTube stars. They’ll create these channels by making YouTube stars an offer they can’t refuse: give Vessel 72 hours of exclusive access and in return, Vessel will give them a percentage of both subscription fees and ad revenue.
It’s a bold move, since most YouTube stars are loathe to move off the platform despite Google’s taking a sizable percentage (45%) of advertising revenue. The reason? The traffic from the site, which sees 4 billion video views a day is just to large to give up. And while hardcore fans may follow them onto a new site, more casual users won’t.
But it’s exactly those hardcore fans that Vessel is banking on. If just 15% of a YouTube star’s 4 million fans make the switch, that’s 600,000 subscribers. Multiply that across a dozen or more acts and you’ve got a sizable audience, one that’s particularly open to offers endorsed by the talent they follow.
Vimeo is also getting into the act, inking a deal last week with Disney-owned Maker Studios that would create a similar platform to Vessel’s on Vimeo’s Vimeo On Demand platform, where viewers would have access to exclusive content— content Vimeo would actually fund— for an as-yet-unspecified period of time.
It’s likely Vessel and Vimeo won’t be the only ones trying to make these sorts of deals with YouTube stars. (Newly video-centric Facebook is rumored to be making plays to lure stars away from YouTube.) For advertisers, the benefits of connecting with these stars are myriad, and that makes grabbing a piece of the market a very wise business move. It’s also a great way to connect with a younger millennial audience who, in a study done by Variety last August, were able to identify YouTube stars like Smosh and PewDiePie more readily than mainstream celebrities like Katy Perry and Jennifer Lawrence.
Another model worth watching is the one chosen by Endemol Beyond. The platform, a spin off of Endemol, the world’s largest independent production company, mixes exclusive content from YouTube stars like Michelle Phan and Matty B with new video series from the likes of Pit Bull and Drea DeMateo as well as clips from existing Endemol shows like Big Brother and Who Wants to Be A Millionaire, to create a channel that crosses both platforms and audiences, allowing Endemol to glean insights into viewers across the board. It’s a very smart idea and one that treats YouTube content the same as any other content, another step in the platform’s growing acceptance.
Lest you think YouTube is just standing idly by while new players slowly dismember it… the platform has taken several steps to retain its talent, chief among them being the creation of YouTube Studios, production facilities where established and up and coming talent can have access to higher level equipment and editing materials. They’re also working actively with their name talent to retain them, though no official word on whether that means renegotiated revenue splits.
YouTube is also getting into the professional content game, taking on the likes of Amazon and iTunes. Truth is, they’ve had this capability for a while, it’s just been under the radar and it took the release of The Interview, which premiered on YouTube, to bring the capability to most people’s attention.
It will be interesting to see how this segment of the industry develops, both from a business and from a creative perspective. The ability to make use of the rich data available to them to make better audience retention, programming and advertising decisions will definitely give them a strong head start.
This piece appeared on the 2nd Screen Society blog yesterday under the title "MCNs Come of Age."
Jan 12, 2015
Dish was the only television industry player with real news at CES this year. Their new V-POP, SlingTV, made its debut there with a considerably smaller channel line-up than many were expecting.
I think many people are looking at Sling the wrong way though, in that they see it as a substitute for a pay TV subscription.
It’s a competitor for Netflix or Hulu or even Spotify with a higher price point. The audience for Sling is not viewing it as a way to rid themselves of a bloated cable package, because they don't have a cable package, bloated or otherwise. For them, it's going to be a way to supplement their pre-existing online-only options, like Netflix, with some live TV.
So success will boil down to whether or not the target audience feels that they’ll watch enough live ESPN, Bloomberg and Disney Channel to justify paying $20 a month for it. It’s a curious proposition because if you’re comparing SlingTV to Netflix, which is $8/month (and has no commercials) you’d have to feel that SlingTV was more than twice as valuable as Netflix to be worth the outlay.
That's worth watching because the key value proposition of Sling is that it provides viewers with live TV. The sports and news offerings are adequate: ESPN doesn’t run every NFL or NBA game, and Bloomberg and CNN Headline news are just two voices. So the question becomes how badly does the millennial target want a live TV option?
It's an interesting question because realistically, many of the shows on Disney Channel and ABC Family are also available via Hulu and Netflix, though not, granted, their current season. So again, it comes down to the question of whether, say, the current season of The Fosters is worth $20/month or if it's okay to wait 6 months for it.
(There's also option C, which is to buy the current season of The Fosters on iTunes or Amazon for about $20-$30, a one-time outlay.)
There’s also the advertising conundrum: Sling.TV is going to have advertising on it and Amazon, Netflix and iTunes don’t. Which makes paying $20 a month for the service an even tougher sell. There’s an interesting paradox there too: most of the programming on Netflix and Amazon got made because the first run versions appeared on linear network TV and were funded by the revenue from said commercials. If we start devaluing commercials and don’t come up with an adequate replacement, that deep well of programming the streaming services rely on is going to dry up in a hurry.
There's one other important thing to note about Sling: it makes V-POPs real. Charlie Ergen did the industry a huge favor by going first, which is the one thing most people (in any industry) don’t want to do. So now that the gauntlet’s been thrown down, look for more V-POPs to emerge. Some of which may actually try to be an alternative to a full-on cable package.
While broadcast television and commercial cable took a hit at the Golden Globes last night, the success of shows like Transparent and House of Cards should not be seen as a sign of their impending doom: far more people watch the shows on network TV than on any of the cable or streaming services.
What the win tonight signified was the solidification (for now) of subscription cable and streaming services as a home for the sort of high quality programming that wouldn’t be able to make it on broadcast TV, shows that are never going to be mass market phenomena, but which hit a segment of the market whose influence as tastemakers provides a reason to stick with them. That’s a huge win in terms of getting to watch quality television without having to rely on British imports: we've never had that sort of a home base in the US before. It also opens up opportunities for many more actors, writers and producers who’d been frozen out by the reality TV wave.
Broadcast TV pays actors and writers ca lot more than cable and streaming because it has a much larger audience than those platforms do. And it’s always going to have an audience, the same way James Patterson novels have an audience: more people read Patterson’s books than whatever’s won the National Book Award, but the National Book Award winner is likely to have far more influence on both the chattering classes and the next generation of novelists. Ditto quality TV shows versus standard issue sitcoms.
Which is awesome, because the way I see it, that lets everyone win.
Jan 9, 2015
The non-TV story at CES was all about the Internet of Things, whether it was wearables or smart homes/cars. There were hundreds of new products on display, but few of them seemed to actually solve any real problems and in some cases would seem to create them.
Now let me preface this by stating that I am the proud owner of a both a Pebble smartwatch and a smart home system from Verizon. I find them both very useful, the Pebble in particular as well as the piece of the Verizon system that texts me when someone has unlocked the door. (It’s a good way of keeping tabs on whether the kids are home from school.)
Unfortunately, much of what I saw on display did not reach that level of utility. And every exhibitor seemed to gloss over the dirty little secret of the Internet of Things: In order for it to work, you’ve got to buy new things. You can’t retrofit your existing stuff. So while it’s great that a smart home app can tell your oven to start roasting a chicken, you’re going to have to buy a whole new stove in order to do that. Ditto blinds that raise and lower themselves according to the position of the sun: great idea, but do you really want to refit your house with new window treatments?
This is not to say that we won’t eventually get there with a lot of this stuff, just that it’s going to take a while. (It’s expensive to replace all your blinds.)
There’s also the utility issue I mentioned before: the answer to “why” for so many of these products is “because we can.”
Take Belty, the smart belt, for instance, winner of a CES Innovation Award. In addition to serving as a fitness tracker, it loosens and tightens itself as you (over)eat and then digest. Is this really a problem for people? Maybe I’m just a light eater, but the occasional Thanksgiving meal aside, I just don’t ever find myself wishing my belt was looser.
Ditto the “smart jar,” which helps you keep a running inventory of what’s in your pantry and whether you need to refill anything. A task I currently accomplish by opening a cabinet door and looking.
Volkswagen’s touch gestures seemed to fall in the category of creating problems. They claim that they are eliminating buttons and replacing them with hand gestures. Which looks sort of cool at a trade show, but would seem to cause problems in real life. For example, you open the sunroof by waving your hand near the roof of the car in a front-to-back swiping motion. (The opposite motion closes it.) Think of how many times people are going to be gesturing with their hands and have the sunroof fly open. Think too of how many people are not going to swipe hard enough or far enough as a sudden rain shower is drenching them.
That same VW concept car has a bar that runs along the dashboard. Swipe it with one finger to control the music, two fingers to control the navigation system, three fingers for something else. Think anybody’s actually going to remember that?
(In VW’s defense, they did show off a feature that’s part of their new navigation system that identifies open parking spots and directs you to them. That actually seemed quite useful… unless, of course, there’s a high concentration of VW drivers in your town.)
My final beef are the large tablet-sized control panels many car manufacturers were showing off. (Tesla’s was the size of two tablets.) They just seem dangerous. Drivers don’t need to be reading all that and the lack of a physical button makes the no-look push that much more difficult.
On the other hand, that may not be a problem if things like self-driving cars take off. Nvidia’s smart recognition software (below) , that identifies types of cars in real time, definitely provided a Wow! moment.
To leave on a positive note, there was one thing I thought was very cool, mostly because it resembled a science fair project: it’s called the Rockr2 and it’s a bluetooth enabled tube that has something that looks like half golf ball attached. The ball part emits vibrations and it able to turn everyday objects like empty cardboard boxes into speakers.
Because why buy a Jambox when you can use a shoebox…