Making money from user-uploaded video: Auditude, MySpace, and MTVNetworks

November 3, 2008

This is an important announcement, but it’s one that’s hard to understand if you don’t follow this business every day — I found that out last week when trying to speak to reporters who were having trouble with this. One reporter who gets it is Jessica Guynn of the LA Times. Her piece on Auditude, quoting me, ran today

The basic explanation goes like this: A viewer captures a clip of a Colbert Report segment and posts it to MySpace. Auditude’s system checks the clip against a massive database of clips and properly identifies the video as a Colbert Report segment from Thursday, October 30. Auditude checks that content against MTV Networks’ list of content that can be monetized, finds it is approved, then matches an ad to it based on who has paid to sponsor the Colbert Report. When that video gets viewed on MySpace after that, viewers see the clip, with an overlay from MTV Networks promoting the show’s website and airtimes, this is followed by a brief “sponsored by” overlay from the advertiser. MySpace gets to please its visitors, MTVNetworks gets promotion for its popular show, an advertiser gets an interested viewer, and some money greases everybody’s palms, from MySpace to MTV Networks to Auditude. Win, win, win and win.

The prior solution didn’t work. It involved trying to discourage posting of copyrighted materials by taking them down quickly but also by providing the same content in high quality directly from the content owner. For example, Tina Fey’s hilarious interview with David Letterman on October 17th to talk about Fey’s Sarah Palin impersonation, was posted by CBS the day after. It has since earned 156,339 views. But the presumably illegal posting from a random viewer of the same interview went up the night before (the same night as the interview) and has since generated 588,934 views, nearly four times as many (with a much lower quality clip).

Taking those successful videos down means they don’t do anyone any good. Making money from them is a better idea. 

This is really needed for the user-posted video market which up until now had no hope of every making real money. I say real money because advertisers don’t want to touch all the video genuinely created by average people, because: 1) it’s often inappropriate, and 2) no one knows how well it engages viewers. In contrast, professional content like the MTV Networks clips that often make their way onto MySpace are advertiser-friendly. Once we can monetize those millions of video views, there’s a chance that revenue will rush into that vacuum, helping the market hit its online video advertising goals

Long-term, this becomes a standard approach. More networks will sign on to work with MySpace, they do all their learning and experimentation. A few will also work with YouTube (probably CBS, which has always had a cozier relationship with YouTube than the rest) in the meantime. At some point, best practices evolve and YouTube lawsuits get resolved and this becomes a standard practice.


Panel of online TV heavyweights tells it like it is

October 8, 2008

Last night I had a chance to be the peanut butter and jelly in an impressive online video sandwich. I was spread between Michael Eisner on the one side and a panel of online TV heavyweights on the other. I’ll end the metaphor there before it gets out of hand, but it was a power-packed event, sponsored by Veoh Networks, where I presented the results of a study commissioned by Veoh and performed by Forrester Consulting about online video viewers.  

The panel, moderated by Veoh CEO Steve Mitgang, really packed a punch, with Albert Cheng of ABC, arguably the father of online TV viewing, Amanda Richman, SVP of digital at MediaVest, Greg Clayman (you have to follow the link, trust me), EVP of digital distribution at MTV Networks, Tom Morgan, CSO at Move Networks, and Patrick Keane, CMO of CBS Interactive. 

Pardon the lousy Blackberry photo quality

Pardon the lousy Blackberry photo quality

One highlight came early on when the topic of whether online video was cannibalistic of broadcast content or not. This is a question I get a lot, so it was great to hear them all answer with variations on the same theme:
Albert
TV viewing has never been higher. That’s what you would expect from it, you have a much bigger distribution pipe that used to be constrained and now it’s not. Viewing should go up. 
Greg
We went live with full episodes of South Park recently. Since then, South Park ratings have never been higher. 
Tom
Two hours before a show airs, we see a spike of people catching up on prior episodes. For two hours after the show, another spike where people who missed the show that night and didn’t DVR it can watch it to keep up. These are the shoulders of a show if you will, and they are increasing the audience.
I’ll be writing and speaking about this topic for a while to come, because I agree completely…for now. The day will come when habits move away from appointment viewing and everything becomes on-demand, just as Eisner said earlier in the evening.

CBS tests online group viewing…wait, haven’t we seen this before?

October 2, 2008

Today we read from TechCrunch that CBS Labs has built a social online viewing experience — you can watch with other people, share comments, and generally engage each other during the show.

Cool idea, but also not a new one. I know of at least two others who have been testing this for two years now! The first one I came across from Lycos Cinema, which has been offering these kinds of social experiences since at least early 2007 when I first saw it. 

Here’s a screenshot of Michael Moore’s Slacker Uprising, which was having a slightly unsocial social screening this afternoon when I joined the last ten minutes of it (which was as much of Michael Moore as I could stomach at the end of a long day).

 

Not a lot of partying going on during this social viewing experience.

Not a lot of partying going on during this social viewing experience.

You can go there right now and start your own social viewing experience with strangers or invite your friends. Another ambitious example of this is also about two years old, it’s from MTV Networks, The N, which is MTVN’s network targeting girl tweens. This site is chock full of award-winning social features wrapped around video (one worthy of its own post some day, called Vomments), including social viewing parties The N calls Screening Parties. I’ve pasted in a bigger screenshot (you can click on it to see it full-size), so you can see the cute little avatars that pop up along the bottom of the screen so you can chat with your fellow viewers. 

The point here appears to be that what CBS is doing isn’t that new. But the real point is this: this has already been going on for two whole years and you haven’t heard about it until now!

That says a lot about the potential success of this kind of viewing. Not that people won’t do it — The N’s Screening Parties are very hot among their visitors. But then, anything that lets 13-year old girls dress up little avatars and chat with friends is a good fit for that market. 

For now, though, most of us are so darn happy to have the ability to watch online video on demand that we’re not left wanting more viewing options and features. We’re pretty satisfied. Give it some time, though. There will be some applications for this. I like to watch Heroes with my family even when I’m on the road. This way, we could watch together. In fact, one of the keys to this kind of viewing experience will be when it gets ported to the TV so that TV-PC social viewing can occur. Though it’s sad to imagine: me, in a hotel room, hunched over my laptop screen watching Hiro Nakamura save the world one cheerleader at a time while my family sits back with some kettle corn in the living room and watches the same show on the bigscreen. What would I possibly have to say via on-screen chat? Pass the popcorn…