Tag Archives: video

Hulu Aliens Eat Boxee’s Brain

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Hulu.com had one of the best superbowl commercials, where the increasingly menacing and chubby Alec Baldwin explains Hulu’s plans for world domination as a brain-eating alien.

I thought they were kidding and just pretending to be ruthless and menacing aliens.

But today Hulu announced that it is dispatching Boxee in one fell swoop by preventing the very popular, award winning service from distributing Hulu’s content. Boxee’s approach was allowing people to view the Hulu content on regular TVs – in a sense focusing on the opposite direction of Hulu which is allowing you to view TV shows on computer and mobile devices. The Boxee/Hulu combination could be used to cut out a cable or satellite provider while retaining a lot of that functionality, but I don’t think this is what bothered Hulu. Instead I’m guessing they simply are dispensing with the big happy family convergence model and doing their Web 2.0 business the old fashioned way – kill your competitor before they can grow to threaten you.

Hulu’s apologetic blog post “sorry we ate your brain Boxee”

Fred Wilson’s take.  As a Boxee investor it’s not surprising he’s unhappy though I’m guessing he expected a buyout rather than a freeze-out.

If I was a better advocate for the virtues of convergence, open media, and copyright dodging I’d express more outrage but I don’t really have dog in this fight, and frankly I’m tired of the predictable and short sighted arguments on both side of the convergence and copyright issues.

New media folks whine about how the big players need to see the light and give away their high cost of production stuff and will make more by doing so when of course they will not make more. Legacy media profits have come in large part from controlling the means of distribution and profits will fall as that control goes away. I don’t see this loss as anything all that significant. Our entire culture is adrift in a sea of media mediocrity and whatever replaces it is more likely to improve rather than diminish our lives.

Old media folks are on even weaker ground when they suggest that users benefit from copyright rules, which currently do far more to protect the interests of the vast network of distribution and marketing middlemen than the interests of most artists and end users. Does anybody seriously think that pruning the songs and mega profits of Britney Spears or the Jonas Brothers is worthy of more than a tiny footnote in music history? Even now, as the old rules fall away and are ignored by end users we are seeing something of a niche musical renaissance as artists who had no chance in LA or Nashville can make their mark, promote, and distribute their work online. Few will make millions this way but many will be able to keep doing what they love and entertaining fans – in many cases establishing closer relationships with fans than any superstar could ever enjoy.

If Boxee fans show enough loyalty Hulu may even have to regurgitate their tiny competitor, though I’d guess Hulu is already close to launching their Boxee equivalent.

The Hulu aliens ate Boxee’s brain, and the show goes on.

Rocketboom and the Barons on Video

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Wow, once again for interesting stories about sex, lies, and videotape you need look no further than your computer screen.   Here’s the interesting scoop that is leading to some nastiness in the chattering nonsense of my favorite technology blogOsphere:

After noting on Twitter a nasty debate about “self made” vs “sugar daddied” between online content guys Jason Calacanis and Andrew Baron this popped up:

ValleyWag reports:
The Rocketboom episode neatly explains why the world of online video so resembles film school, a parent-funded enterprise of self-indulgent auteurs with macroambitions viewed by microaudiences (including yours truly). Sony’s deal doesn’t affirm the potential of online video as a means of creative expression; it simply tells us that the rich, despite themselves, can’t help getting richer.

Rocketboom was the early tech news show hosted by Amanda Congdon.   Not clear to me how much this hurt the show, but the buzz died way down until Rocketboom was bought by a big player recently.

But it gets more fun/sad/tragic/interesting.    Baron’s father, a prominent Texas attorney, is a friend and supporter of John Edwards and some rumors suggest he may have played a role in what appear to be possible hush money payments or at least hush up activities surrounding John Edwards affair with a …. campaign video producer.

So, do all roads lead to low monetizing but highly subsidized online video?   Stay tuned for the next video episode – at least as long as we can find some politicians or parents to pay for it.

Current TV filing for $100,000,000 IPO. Initial PE ratio = infinity!

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Today Current TV, with Al Gore a prominent investor, is filing for a big IPO.    But there is a problem.   They lost a lot of money “making” their 64 million in revenues last year.     Will they ever be profitable?  Global warming or not, I’m guessing they will be profitable about the same time that hell freezes over.

I still just don’t get it.  I understand why video clips are fun and a significant development online, but I don’t get those who express *economic* enthusiasm for online videos produced by … you and me.   As I’ve noted before about online video, I don’t understand why people think video sites can make money.   Youtube cost Google 1.6 billion but doesn’t make money.   Podtech had a brilliant, well executed, forward vision of the online video landscape.   They even had the ultimate forward looking blogger spokesmodel Robert Scoble (who has just moved to FastCompany.com and is right now hanging in Davos with the uber-economic-elite).  Despite this Podtech failed to deliver on the promise of monetizing quality content to the larger user base.   I had a chance to talk about this with John Furrier at CES.   John told me he’s still very bullish on video, but Podtech is going to focus more on a model where they’ll be producing company videos for corporate clients, helping them to leverage social media advantages.   We also talked about how hungry many big companies are for those who understand social media and want to leverage that power to their corporate advantage.    This, in my opinion, is where you’ll see most video and podcasast production efforts moving over the next few years.   The money is in leading corporate clients into the uncharted social media waters rather than trying to build website visitation and monetize clips.   The latter is a very dead end in my view.

So, should you invest in Current TV’s IPO?   Sure you should, right after hell freezes over.

The video revolution will NOT be televised, because it’s boring.

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OK, I officially don’t get it.  Don’t get all this talk about how online video is the next big thing.  Perhaps more accurately I do get it, but don’t understand why so many bright and well connected folks don’t seem to understand that there is a very important challenge with video that makes it far less significant of an online force than most of the early adopters seem to understand.     Online video has a role to play in the information landscape, but it’s not nearly as significant as many seem to think.

Here’s a BBC story about the very clever Loic Lemeur and his clever SEESMIC project.   We’ll see more of these stories over the next few years as mainstream press slowly figures out that the early adopter online community is very enthusiastic about videos, video blogging, and pretty much any moving pictures that you can pump online.   Seesmic is a combination of video and community and thus offers the killer combo if you buy into the idea that the online world is going to revolve primarily around two key components: social networking and video.     

I’m very skeptical.   Not about the internet, which continues to rule.   Not about social media, which clearly has become and will remain a key driver of online life.  The internet has always been about people far more than technology, and the best definition of “Web 2.0” is an internet driven primarily by people and their needs rather than technology and its constraints.   But I’m very skeptical about online video, and I think the early commercial challenges of companies like RocketBoom, PodTech, and YouTube are an indication that it is very difficult to build a business or a community around video, let alone create a highly profitable environment that will drive future innovation in this space.

The biggest single challenge to video is obvious but overlooked by most of the sharp folks I see working that angle:  Most video clips are very boring.   Unlike a wordy blog entry you can quickly scan for the quick info buzz, and unlike pictures which you can review at the speed of an eye blink, with a video blog entry of video clip you’ll need to pay a lot of attention, and take up much of your attention span to glean the nugget or two of interesting content you’ll be lucky to find.     

Video online enthusiasts often agree with this, but then suggest the answer will be better video indexing services – applications that chop up the video into dialog chunks or “ideas” that are then indexed and easy to search and easier to surf.    Sure, that is an improvement, but if I want the goods I’d rather have a transcript and/or a few still pictures than a video any day, because unless you are a very slow reader a transcript is going to be easier to deal with efficiently than a video.

So, is there any room for video online?    Of course, it’ll continue as a major force for cheap little entertainment bits and perhaps even could become a minor social force as tech enthusiasts use tools like SEESMIC to communicate in a more robust and intimate fashion than you can do with writing.      However the lack of monetization potential combined with the fact that 99.99% of all video clips will bore to tears means that ultimately video will NOT create the kind of sea change in internet focus many have been waiting for.  

In fact, the video revolution is so boring it’s not even online yet, and it may never be.

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

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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!

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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.

Brightcove darkens. More companies to follow.

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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.