Trickles of web content to become floods, sweeping away the cable industry? Maybe.


Henry Blodget at Silicon Alley Insider has a good insight about the threat to cable from online feeds, which are now a trickle but could become a flood.    Blodget notes about the agreement between Yahoo and CNET:

… cable companies, meanwhile, depend on monopoly access to networks like CNBC and cannot afford to be circumvented by, say, a live CNBC web feed (lest a web trickle become a flood)…

I think Cable still has a viable future for at least the next 5 years because convergence of media is going to take a lot longer than most think, and if Cable is smart they’ll find ways to be the key broadband conduit into the home as they already are for millions of American homes.    It seems to me that the internet is more threatening to information driven media like newspapers than it is to entertainment driven media.   The is partly just a bandwidth issue – currently it’s not realistic to expect people to buy, configure, and use the fledgling broadband movie services.     How soon will this change?    5+ years in my estimation.   Of course eventually super high bandwidth streaming into most homes will be the likely main paradigm for home entertainment, but this won’t happen for some time.   We are too stubborn to innovate nearly as fast as technology allows.

YouTube + You = cash? Not much!


YouTube’s starting to experiment with revenue sharing for video producers, though it is not clear yet how the details of the program will shake out.   Marshall at ReadWriteWeb   suggests this action might “put to rest” the notion that YouTube cannot monetize content, but I think it will actually show how difficult it is to monetize even popular content.     Unlike targeted pay per click advertising it’s hard to “hit” a customer with a relevant ad when they are simply surfing aimlessly for clips or watching a funny clip.    True, you get some vague targeting information such as a possible few interest areas, but this is nothing like running a per click ad during a search for “Buy a sony digital camera”.   The latter is a golden opportunity to strike at the point of purchasing decision, and it’s why PPC, especially at the brilliantly matched Google PPC adwords environment, works so very well.

About a month back, when YouTube started allowing you to embed videos in a web page and use adsense to monetize them I tried a small experiment setting up a new website called “Funniest Online Videos“, fovideos.com.     There are adsense ads embedded around the funny clips that Google pulls from their YouTube comedy section.    

After sending a few thousand people to the site using some untargeted advertising I think I made something like 35 cents from a handful of clicks.     Sure, I could work hard and target better and get some organic (free) traffic to that site, but as they are starting to find in many other venues video clip advertising does not pay well at all.    I’m very skeptical of this model for ads, and given the deluge of clips I think advertisers will soon see this type of advertising as a waste of money, even at the low end of the scale.

Beowulf * * *


Beowulf has some simply remarkable animation sequences, especially those showing the title character.   I need to study up to see how they transition between the real people and the CGI computerized animations, but in the best scenes it is difficult to tell the actor from the animation.    In general though the film appears as animation, which makes it a bit harder to suspend your disbelief.    The quality is high enough however that one wonders how long it will be before we can’t tell real characters from animated ones.

The poem Beowulf is one of the oldest surviving stories in the English language.    Unfortunately the film takes too many liberties with the actual story, though I suppose Zemeckis could argue that in some storytelling traditions it’s normal to embellish and change things with each telling.  

He appears to have embellished to bring more nude Angelina Jolie scenes into the film since in the real Beowulf poem Grendel’s mother is killed rather than … bedded.

Here’s a great summary of Beowulf, the epic poem.

Brightcove darkens. More companies to follow.


Update:   Here’s the word from Brightcove 

Brightcove, a formerly “promising” video distribution startup has given up it’s lackluster battle to compete with YouTube in consumer video, though *it will remain open as a distribution point for high quality video.    (High quality video?  Isn’t that an oxymoron in modern media parlance?).

ReadWriteWeb has an unsatisfactory summary of this event, failing to note that the key challenge for anything related to online video is this:   Video-related advertising doesn’t work.    More importantly it’s not clear it will *ever* work.   I’ve always been skeptical of how video would monetize, and still think YouTube may never justify it’s capitalization except as one more brick in Google’s massive wall of online dominance.

In fact it’s time to consider this interesting possibility – pay per click advertising may be a “one hit wonder”.     I’m not prepared to make this case yet but it’s not really clear that online advertising techniques outside of PPC are working well for advertisers, and even PPC is showing signs of reaching some cost limits in term of advertiser ROI.     Success for advertising agencies (Google is number one, with half the online ad take)  should not be confused with success of the advertising itself.    Clearly PPC is working for many, but part of what is happening is that offline advertising is finally recognized for what it is, which is an “emperor without any clothes”.      I’d argue that as a general rule (ie more than 50% of the time) offline advertising campaigns have negative ROI.    Watching in the Travel industry how negative ROI is spun by ad salesfolks as positive ROI and how failure is analyzed as “success” has been a real eye opener, and I think these mathematical misperceptions are pervasive in the industry. 

Another powerful force is the impact of “free” social network marketing.  Word of mouth has always trumped paid advertising, and social networking is ushering in a new era where consumers not only control what they buy, they are working to control the ads they are exposed to and are talking a lot about products independently and without advertising intervention.    Facebook’s recent “beacon” fiasco tried to spin this backwards and has had very questionable results.

Pay per click has brought much better ROI measurement to mom and pops as well as large companies whose agencies are having increasing difficulty spinning failed “branding” campaigns as a big success.  

Brightcove is not an exception: look for more failures in the video space and elsewhere as the 2.0 bubble slowly deflates into a balance with rational business practices.

FCC to Cable Industry: “Open wide”


The FCC has ruled to open the Cable industry in a surprise move from an agency that is notable for NOT regulating markets.    This decision is, however, consistent with the idea that since Cable companies have enjoyed an unsual monopoly-esque sort of status in media for some time, and have taken advantage of that by rising cable rates much faster than inflation would suggest they should have. The  New York Times  reports.

User content myth?


Chuqui 3.0 has a nice piece challenging the hype over “user generated content”.   He suggests that it’s inappropriate to call simple profile pages at Facebook or Myspace “user content”, and that only about 1% of users are generating most of the content in social network sites.    

I’m torn between wanting to agree that things are overblown about this and my basic assumption – social content of both high quality (serious bloggers) and low quality (myspace TV show notes from a 12 year old)  is driving the new web and will continue to do so for some time.     Tons of content is pouring in and even by a high measure of “quality” people already have more than they could read in a lifetime.    It’s hard to make a case that the popular YouTube videos are quality, yet they are generally viewed far more than most quality web pages talking about relevant news or science or yada yada.

So, is the importance of user content of mythological proportions?  

No, but thanks for a thoughful post Chuqui!  


Paid Content has a great article about online advertising and how the concentration of online advertising in the hands of so few websites is becoming a problem. 

They note this remarkable stat from Zenith regarding distribution of online ad revenue:

So the big problem is not that ad spending is drying up, it’s that the bulk is concentrated in a few sites. Citing the IAB, Reuters points out that the top 50 websites in the U.S. took in more than 90 percent of the revenue from online ads in H107, while the top 10 sites sucked up 70 percent of internet revs for the same period. 

They also quote Zenith as suggesting that even as late as 2009 online advertising will remain a fraction –  under 10% – of the total global ad spend of some 495 billion.     I’m skeptical of that estimate – very skeptical – because online ROIs remain vastly superior to offline, though this advantage is not as obvious as it should be because so much of the spend is done in foolish “old media” ways with large, expensive, poorly targeted campaigns.  As PPC campaign sophistication improves, people continue to move online, video continues to move online, and advertisers increasingly continue to insist on positive ROI we should see online buys approach offline – I’d wildly guess there will be online / offline ad parity by 2015, though interactive TV and video clip advertising may blur the distinction between a TV ad and an online ad.

The rumors of PodTech’s death may not be greatly exaggerated?


Update:   As far as I know PodTech is doing fine as of December 2007, and the rumors back in July were bogus or exaggerated.   Just heard from John Furrier that PodTech will again host a “bloghaus” at CES, one of the neatest “social tech” ideas last year in my opinion.    I’m a big fan of all that Robert Scoble has done to evangelize quality corporate blogging and really wish PodTech the best.

——————–

Mike Arrington is reporting that PodTech is in trouble. I think this is consistent with the idea that content is no longer king – it’s a pawn in the big game to leverage the flood of free content and social networking activity, a game where the winners will NOT be the product of doing the “right thing”, rather winners will be the survivors of the evolutionary process that drives our rapidly changing digital ecosystem. Biological evolution works *away from failure* rather than towards success, and it seems clear to me this is also how internet company evolution works.

Mike suggests that PodTech might survive in modified form by scaling back and lowering their “burn rate” and focusing almost exclusively as a production and advertising house focusing on their own clients. I wrote over there:

Good insight as usual Dr. Mike.

“… get their burn rate very low” ummmm – can you cite any examples of a companies that did this in time to survive?

I enjoy Robert’s perspectives and consider him a real blogging leader and a digital inspiratation to the rest of us, but I don’t have the time to invest in his videos or PodTech’s other rich content. (just the facts please!)

Producing quality content is now playing with pawns rather than kings, and for some time it will be the companies that leverage the flood of free content or help people process the maelstrom of content that will win. e.g Facebook, Google, and your personal favorite winner, TechCrunch!

The painful thing if PodTech dies is that they did so many thing exactly “right”. They saw video and blogging as sweeping new online paradigms, they hired Robert Scoble who is nothing short of a digital inspiration to bloggers and video folks – he’s one of the elite onliners who puts his blog, money, reputation where his mouth is and actually engages non-elites regularly and with gusto and stays about as Web 2.0 connected as you can without exploding. Also, PodTech sponsored what looked to me like CES’s best new idea – the Bloghaus.

But planning and quality don’t necessarily breed success in biology or business, and PodTech may be just one more example of the harsh new evolutionary realities facing any digital animal.

As Paul K infectiously notes business plans are overrated. Twitter’s lack of a business plan may be the flip side of the evolutionary challenges – disorganization won’t hurt them and might even be part of the reasons it’s looking like Twitter will be …. hugely successful.

Google to Viacom: See YouTube in Court!


Viacom’s Google suit may actually go to trial, though I think everybody is just blowing smoke right now with Viacom looking for a nice payoff and Google looking to minimize the payoff to keep within the 400 million they allocated in the YouTube sale to copyright infringement payoffs.

Unless Google is lucky enough to get a silicon valley jury with an average age of 25 it seems to me they’d handily lose a lawsuit.   The notion that Google (let alone everybody with a PC and internet connection), didn’t realize YouTube contained vast amounts of copyrighted material and that Google didn’t have the technical capabilities to screen for copyrights is absurd.    I presume they’d make the fairly technical case that they can’t be held responsible for users uploading stuff, only for taking it down when they get complaints, but I think this (reasonable in the future) notion will wear thin under the weight of current (old fashioned) copyright rules.

Duh…. you believe in Vudu?


No offense to Vudu but it’s not going to play in Peoria. Vudu appears to be a brilliant innovation in movie downloading, partly because it allows the user to start watching the show immediately and thus offers true “on demand” movies.

However it takes a lot more than being the best of the lot in terms of providing a user with streaming movies on demand to be a successful company. Much of the company’s, mainstream media’s, and blogosphere’s breathless gushing about this product is ridiculous. Mom and pop are NOT going to pay hundreds of dollars for a Vudu box *plus* pay per movie fees so they can have a downloadable movie experience.

This is another of the hundreds of silly silicon valley ideas that seem reasonable to sharp, young tech folks pulling down $10,000 per month who are not intimidated (in fact who like) stylish new gadgets and having a 10th remote control in their living room arsenal. Unfortunately for Vudu and other startups catering to this group, this group is a tiny fraction of all consumers and almost totally non-representative.

Early adopters? Sure, but it’ll be years before people demand the type of experience Vudu is offering.

Vudu, unless they find a way to provide really cheap hardware and really cheap downloads (they won’t find this), will fail as soon as the VC cash burns up.

Fueling the IPOD revolution was free (though often illegal) content. The crackdown on illegal online music distribution has been somewhat successful, and it’s much easier to stop online movie distribution which remains a relatively small problem for the industry.
Instead of too little too late Vudu is offering too much too early at too high a price.

I don’t believe in Vudu.

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