I’m at the Online Publishers Association confab in London and Jeff Rayport is leading off. He is a former Harvard Business School genius (former HBS, still a genius) now leading a consultancy called Marketspace. I’m taking extensive notes because he’s sure to be provocative and this will be on the final. From his Powerpoint and spiel:
He says the challenge for online publishers is to “build volume through aggregation and margin through engagement.” Trends:
* “Community is the new engine of content creation,” his PowerPoint says. I’d day that content is the gas of the community engine.
* “Social networks are the new distribution channels.”
* “Social intelligence is the new source of editorial filters.”
* Tools and applications are the new editorial bundles.”
* “Multiplatform is the new basis of online ‘publishing.’ ”
* “Video is the new lingua franca of online content”
Now to the strategies he recommends. Note how big-company-centric they are (I argue that you have to see yourself not at the center but at the edges, serving the community at the center, but more on that later). Powerpoint quotes:
* “Own the audience: Overwhlem the microcosm. Deliver shock and awe in content abundance by geography, interest, or identity.” Where do I start? We’re not an audience and you can’t own us. And you likely can’t awe us either. His example is Toyota’s launch of Scion because they are selling cars “designed to be completed by the owner.” Or I’d say, owned by the owner. He says this was the first major auto brand launched with no television but with web and interactive media. Online, his examples include the knot for “condition” (”it touched 85 percent of weddings” last year), femail for identity from the Daily Mail in the UK, xionet.com (a Chinese Facebook, the second-largest social network in the world after MySpace) for location, bebo for interest (a MySpace up-and-comer in the UK). He says that online, “audience growth is often strongest where community is most palpable” — e.g., The Economist, The New Yorker. He’s not wrong but I still say he’s looking at this the wrong way. These things an help enable people to do what they want to do or to do what they already do better. Flip the model: You’re not at the center, we are.
* “Claim the community: Ensure membership has its rewards. Forge communities of conviction and reward loyalty.” His example is online travel and “gives us cause for great hope for claiming the relationship.” In content, he argues that free content “drives volume or traffic” while bundles of proprietary offerings “defy aggregation;” he uses Times Select as an example because it “drives pricing power.” Insert standard argument here.
* “Work the web: Let the outside in… and let the inside out. Adopt ‘open source’ thinking as an aggregator while exploiting network effects. This, he says, is the network effect. Letting the outside out is Progressive Insurance providing quotes from other insurers. Letting the outside in is Starbucks pushing into consumer environments (aka grocery stores) instead of just pulling them into destinations (the Starbucks store). Sure. This is about a newspaper providing links to the world and about going to where the people are. This is Google. Citizen journalism is letting the outside in. He says the more interesting story this year is citizen editing. Yup. Factoid: “up to 60 percent of YouTube’s streams are viewed on third-party websites.”
* “Design for occasion: Make each interaction a divine revelation. Customize online content interfaces for consumption contexts and occasions.” He says that Daily Candy is an example of form-factor optimization. Oh, my, that’s a fancy way to say it. But yes. Factoid: Daily Candy commands CPMs as high as $280 and is on track to generate $18 million in revenue in 2006 with margins over 60 percent.
* “Integrate the experience: mandate a unified field theory. Orchestrate multichannel delivery to establish best ecosystem.” Example: American Idol spreads internationally and into mobile and the internet and merchandise and concerts. Being a former business school academic, he draws a two-by-two martric: Amateurs acting like amateurs (e.g., Numa Numa guy), professionals acting like amateurs (e.g., LonelyGirl15), amateurs acting like professionals (ZeFrank, AskaNinja), professionals acting like professionals (e.g., OK Go, Beppe Grillo, and, surprise, me at PrezVid).
He has five strategies, “x factors” for online video (from Andrew Heyward).
* Extend content you have and bring it to online media.
* Expand video activities to make new and experimental forms of content.
* Expose (let the outside in; e.g., NY Times wedding videos, Le Monde user videos).
* Explode (let the inside out; syndication, in other words).
* Exhale (you don’t know what will work so relax).
There’s a lot of meat in this. I might grill some of what he fries, looking at things from a different perspective (ours v. theirs), but I think he brings together important observations, conclusions, and recommendations.
Discuss.
* * *
Next is a panel with Betsy Morgan of CBSNews.com, George Kliavkoff of NBCU, Alberg Cheng of Disney-ABC, and Tony Ageh of BBC internet with Larry Kramer moderating.
Betsy says that they are sold out in video advertising and that’s why they are syndicating their content to get more inventory. Kliavkoff, who extolled the virtues of marketing by putting clips on YouTube (yea), says that CPMs are high for online video but there is a shortage of quality inventory. He argues against the dreaded “user-generated content” usage saying that Spielberg is a user, too. He says the lesson of YouTube is that it doesn’t matter whether it’s amateur or professional; quality wins (I agree in spirit but in specific, it’s hard to judge the quality of a flaming fart and so quality is what you have to seek and find).
Betsy tells the story of her sister-in-law, who got Direct TV and made an either-or decision: TV or internet. She chose internet and she’s now watching her TV via the internet, including paying for shows via iTunes etc. See yesterday’s post about the end of the remote control clickers.
George says that an SEO company trying out for a gig with NBCU made measurements on the sly, looking at blog talk about shows from five weeks before they launched and then compared the ratings five weeks later. No surprise (to us): We the people formelry known as the audience (now known as the programmers) predicted that Heroes was a hit and that other shows would not be hits.
I asked the group to give advice to the makers of new TV at the Video on the Net conference I’ll be attending in a week and a half. Betsy said they are seeing “microjournalists” who are expert and credible and they’d like a relationship (promotional and commercial) with them but also need a trust system to help determine who is good (a system used by the public, not the network). George advised focus (serve a topic and stay on topic) and scale (get distributed). Larry advised aggregation, putting together shows/sites in networks large enough to be worth advertisers’ effort.
The embargo just came off a BBC announcement that they’re putting video on YouTube to reach more audience, worldwide. “YouTube is a key gateway through which to engage new audiences in the UK and abroad,” BBC Director-General Mark Thompson said in the release. “It’s essential that the BBC embraces new ways of reaching wider audiences with non-exclusive partnerships such as these.” Smart, those Brits.
The BBC will put up clips of new shows and promotional stuff about such stalwarts as Doctor Who. BBC Worldwide — which, as a for-profit division will take advertising — will show clips from Top Gear, Spooks, shows with David Attenborough, and more. And BBC Global News will provide 30 news clips a day, also ad-supported (and available only to us ferners). From the release: “Users will be able to comment on clips, rate them, recommend them to friends and post their own video responses to communicate with the BBC and other viewers.”
If I had the Oscars or Viacom — both of whom pulled their clips off YouTube — here’s what I’d do to deal with — no, to exploit and profit from — the inevitable trend toward your audience promoting and distributing your content:
The first goal is to get the audience to pick and recommend your best stuff. That’s free promotion.
The second goal is to make money from advertising, either on the clips themselves or on the pages and videos people come to because they saw the clips.
So I’d work with YouTube et al on new Motionbox-like functionality (which I hear Bright Cove has, too) to enable viewers to pick out segments in the middle of video. And then I’d let them to post those segments on any of the sharing services that enable me to attach ads and make money. So say the Oscars are up at Oscars.com and you can watch them there — and earn the Academy and the network more ad revenue with every click. Say that you can snip and post any two minutes up on YouTube with a click of a mouse. If the clip is already there, it takes you there and registers that you’ve recommended the same thing as someone before you and lets you comment to join in the conversation around the clip (”Can you believe Ellen’s pantsuit?”); having just one version of the clip will lead to better conversation and community. The clip carries my advertising. The video services let me keep my revenue and they report stats to me on viewership. They also promote the clips: “Watch the most popular Oscar moments!” And when people discover those clips on YouTube, etc., they’re pushed back to Oscars.com to see the show — starting with where the clip left off. And I make money showing them advertising there.
What’s not to love? I get free promotion — from my customers! I get free hosting from the service. I get incremental ad revenue both on the clips and on my show. If I have obscure cable shows at odd hours with small audiences (cough! Viacom), I get new audience discovering me. I get branding.
See, that’s the way to exploit and enjoy what’s happening in video anyway. That’s the way to go with teh flow and find new cash flow. Sitting and whining and taking your marbles and going home doesn’t earn you new money and doesn’t endear you to your customers and doesn’t save you marketing money. It just makes you look like an old dolt. And remember: In the post-scarcity media economy, there’s always something else to watch.
That’s what I would do.
: MORE: Here’s what Mark Cuban would do: He’d flood YouTube with tiny clips to harass the viewers there. That’s one helluva way to treat your fans. Does he also serve warm beer at basketball games? Dave Winer suggests:
What if, instead, Viacom told YouTube that they could host clips from their shows, but reserved the hi-rez versions for themselves, and maybe they could have negotiated a link from the YouTube low-rez scan to the one served on their site. Anything would be better than the fractured world that’s being re-created now. Wouldn’t it be better for everyone if users knew they just had to go to YouTube to find what they’re looking for, knowing that it would lead them to a purchasing experience if they want one.
It seems the entertainment industry doesn’t recognize the power of its users. They’re accustomed to dealing with artists and other companies, esp really large ones, but they haven’t learned how to negotiate with the users, and that’s who they have to deal with, if they want a future.
Let’s repeat that: “The entertainment industry doesn’t recognize the power of its users.” Amen, brother.
Instead of being glad that people (the same people who pay for their over the top lifestyles by watching movies) wanted to see some of the clips, The Academy of Motion Pictures, Arts and Sciences today asked YouTube to remove the clips.
Don’t they realize that these clips are like milk left on the counter top for too long, and will go sour soon? Don’t they realize that in this era when people are short on time, the three-hour overproduced crap that passes off as the Oscars broadcast is not needed?
Why blame the people for putting short clips on YouTube, and why take them down now? The question is why didn’t either the Academy or ABC offer the clips themselves – thus losing out on potential advertising dollars? Why not work with YouTube and give people what they want?
Some new posts of note over at my PrezVid vlog/blog:
* My interview with Loic Le Meur, adviser and vlogger for conservative French presidential candidate Nicolas Sarkozy, about the amazing video action happening in the campaign over there. For all the attention American candidates are getting in our YouTube election, the video scene in France’s election is far ahead, moreso on Sarkozy’s site than on that of his liberal opponent, Segolene Royal (you supply the accents, please).
* John Edwards tells WNYC’s Brian Lehrer that this is, indeed, the YouTube election … and he’s not bothered by all the hair jokes.
Don Hewitt is ready for his second act: an online-only show filled with the commentary of the YouTube generation. Very impressive.
“I know that this is an age group that does not watch television,” Hewitt said. “They are not interested. I figure that’s because they are bent over a computer all the time. I figure, maybe the way to reach them is the Internet.” . . .
And although the technical requirements for submission are low-budget—even cell phone camera footage is OK, so long as the sound is clean—the storytelling vision is pure Hewitt.
“If you’re interviewing others, make sure they are interesting,” reads the email. “Strong characters can save a weak story. Weak characters can sink the strongest of stories. Cast your story with people whose personas make you pay attention. . . . people who are forceful, animated, quirky, whatever . . . you’ll know it when you see it.”
Well, one way to look at the networks playing hardball and leaving YouTube is that there’s that much attention left for the rest of us who are making small TV.
David Neeleman, CEO of JetBlue, takes to YouTube to apologize and promise better skies ahead. It’s quite unpolished but that’s part of the appeal. The guy has circles around his eyes; he’s stressed; he’s trying, and that’s what comes across. He’s using YouTube to speak directly to his customers and putting himself at their/our mercy.
Viacom just signed a deal with Joost to air lots of its shows and movies and the Wall Street Journal tries to draw a contrast between that and the company’s demand that YouTube pull its clips offline. But they’re completely different deals. Joost is the new cable MSO, airing full shows at full size. YouTube is the viral promotional and marketing engine of today — the, pardon me, buzzmachine of TV. Audience recommending clips via YouTube is what will drive viewers to Joost. Note that, apart from possibly supplying bandwidth, cable is cut out of this. See my post below. Good riddance.
Speaker Nancy Pelosi’s blog — note how that rolls off the keyboard — has been putting up video of representatives floor speeches against the war. That’s fascinating enough but get how they are posting the video: via YouTube. Here is Pelosi’s own YouTube user page.
C-SPAN has been the place to get source information on video: watch and judge for yourself. Now YouTube can take over that role and not just for limited official events but for source video anywhere. [crossposted at PrezVid]
Here’s my latest Guardian column (nonregistration page here). It’s about Viacom pulling its clips off YouTube but what it’s really about is the end of control as a media business strategy:
The days of doing business by telling customers what they cannot do are nearing an end. If your customers want to watch your shows, listen to your songs, read your news, or play your games, can you still get away with telling them they cannot unless they come to you and use your devices, pay your fees, and follow your rules? That could work in a scarcity economy in which you owned all the stuff and the means to get it. But no more. Business isn’t about control any more.
The wise company today will go with the flow of the public’s desires and try to figure out how to make money by helping them do what they want to do. That may sound obvious, but it’s not how media work. In the age of consumption, control was what media were about. In the age of creation, they should be about enabling.
Take Viacom. The American media giant - owner of MTV, Comedy Central, iFilm, Paramount, and much more - followed the old rules this month when it demanded that YouTube take down 100,000 clips that viewers had put up there. Mind you, Viacom was quite within its rights, for it controls the copyright to that content. And as a content creator myself, I’m no foe of copyright. It’s also clear that this is a negotiating move on Viacom’s part.
Still, it wasn’t a smart move. And here’s why: the evening before Viacom’s announcement, my teenage son and webmaster brought his laptop to the dinner table - yes, that is what life is like in the home of bloggers - and showed me a YouTube clip of his hero, Bill Gates, being interviewed by my hero, comic Jon Stewart, on Comedy Central’s faux news, The Daily Show. My son had never watched Stewart. Nor does he ever channel-surf the TV. The only - only - way he is going to discover a new show is via the internet, and the best way for him to do that is via YouTube. Yet the next day, that clip disappeared from YouTube and thus Viacom cut itself off from its future audience.
Comedy Central has put clips on its own site and even allows them to be embedded, like YouTube players, on blogs. Fine. But the first problem with that is that the network is speaking to the audience it already has. To attract a new audience - to make up for the free YouTube promotion it has now cut off - Viacom will have to invest marketing money. Control can be expensive. The second problem is that the network, not the audience, is picking the good stuff now. If your audience wants to praise and recommend and pass around your best stuff, why wouldn’t you let them, encourage them, enable them?
At the recent McGraw Hill Media Summit in New York, online mogul and conference keynote star Barry Diller said that “the issue is availability”. The music industry, he said, “stuck its head in the dumb sand for way too long”, but that won’t happen to the video industry because “everybody’s going to make everything available”. The question is where and how. Diller said that producers won’t want to find themselves at the mercy of a single powerful distributor, as they were in the early days of cable TV in the US. Fair enough, but they don’t have to. Their videos can be on their sites and on YouTube; they should be everywhere. Diller argued that Viacom will make money from its clips with advertising, subscription fees and micropayments (the last long-promised and prayed-for but still not materialising). I say he left out the other business model: free promotion of their core business, their network shows.
Rather than cutting off new distributors and promoters, I say that producers should be finding the ways to take full advantage of the opportunities they present. How can you build new audience for free and grow larger than you ever could when you were limited by your own distribution and marketing? How can you enable that growing audience to recommend and share your best stuff? How can you find yourself in a larger conversation - not just in comments on your site, but in the response videos people make on YouTube and elsewhere? How can you use this new medium to find new talent and new ways to make content for less? And, yes, how can you make advertising revenue on the clips that are on YouTube and then on the countless blogs that embed its videos? If, in its negotiation with YouTube, Viacom manages to crack that nut - getting revenue plus promotion plus branding plus content while helping the audience do what it wants to do - then that would be wise, indeed. We’ll see. My advice is simple: find the flow. Then go with it.
Presidential candidates should take a lesson from Al Franken and his YouTube video announcing his run for the Senate. (Well, that radio thing didn’t work out so well so it’s time to get a job.) The video is a bit long but it has the right tone as Franken talks about his and his wife’s poor families and how the government helped them get their starts in life; it is a fine illustration of his liberal progressive outlook. Franken is not cracking jokes; he’s not talking to a big audience on a big camera; he’s talking to one person: whoever clicks below.
