Wednesday, January 28, 2009

Profiting from Video: SIIA Panel

This panel featured Sandy Malcom (, Andy Plesser (Beet.TV), Kathy Yates ( and Nicholas Ascheim (NYT) as moderator. I really enjoyed listening to this conversation, and took copious notes. The following summary captures the gist (I hope), but doesn't always attribute who said what, or who agreed with whom, and occasionally mixes in my own observations.

The Web is becoming more like TV, but estimates of the video ad market have always been overblown. In the summer of 2007, it was a little over $500M, about half of what had been predicted. Meanwhile, CNN is churning out 100 news clips a day, and niche players like Beet.TV and AllBusiness are building lower cost libraries of less perishable goods for much narrower audiences.

The CNN story is pretty instructive, I think. They started with online video in 2002, in partnership with Real Networks, and kept their product behind a pay wall. Then they made it free, except for live video, employing ads and cross-platform selling (presumably of their other service offerings). Now it's all free, including the live stuff, and bloggers, etc, are allowed to link in.

Beet.TV, meanwhile, makes 10 videos a week, mostly of tech gurus and academics who want to get on the small screen. Some, like Akamai and Adobe, want to reach out to customers. (Thomson Reuters has used Beet.TV to highlight its Open Calais service.) Others are probably building their personal brands and promoting their careers. This can be done at relatively low cost with webcams and Skype. AllBusiness spends about $250-$300 per 3-5 minute video, which includes the cost of a videographer and a production assistant.

Video search is still a wide open field, guided mostly by metadata tags, blog context and other cues. Ads can travel with a video, embedded in a branded player. YouTube (like Google) has adwords available to be associated with video content. And Google is making video more discoverable through its ordinary, universal search engine.

Bottom line is that YouTube is monetizing less than 5% of its clips, while even CNN must only be making a few thousand per clip in revenues, with production costs 10 times that of Beet.TV et al. Increased use of syndication may be part of the answer, in which ad revenues derived from product are split. (Thomson Reuters already does this in both directions.) In any event, the convergence of Web and TV is proceeding apace.