The online video market represents both a threat and an opportunity. Video viewership has shifted to "video snacking" on short clips instead of full episodes. While traditional media struggles with high production costs and unclear paths to profitability, video aggregators that distribute content across sites have seen rapid growth. Only companies like AOL that have embraced off-site distribution and acquired content platforms have managed to grow their online video audiences faster than the market as a whole. To succeed, media companies must lower production costs, distribute content beyond their own sites, and partner with technologies that enhance distribution.
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Online Video: Threat or Opportunity (2012 NAB Show)
1. O n lin e V id e o M a r k e t :
T h r e a t , O p p o r t u n it y , o r B o t h ?
A p r i l 2 0 12
Andrew Taylor
VP of Business Development
ataylor@grab-media.com
(773) 450-9461 1
2. • Video viewership has changed fundamentally
• The economics of the business have shifted
• There’s hope (for those who want it)
2
3. Company Investors
• Offices: NY, VA • SoftBank Capital
• 296MM Monthly Streams* • SCP Partners
• 24MM Monthly UVs* • Longworth Venture Partners
• Court Square Ventures
Media Companies that create content and
need reach, brand safety, and increased
revenue (with brand and rights control)
Publishers that need high quality content,
software to create world-class experiences, and
new revenue streams
Advertisers that are looking for a brand-safe
way to reach valuable demographics across
distributed outlets
* December 2011 comScore VideoMetrix 3
4. April 10, 2002 April 10, 2012
Viewing
22.6MM 2.8MM 3.1MM
Audience
Cost per $10K?
$7MM $4-6MM
episode $20K?
Primary
Distribution
4
5. T h e n atu re o f vi d e o co n su m p ti o n h as sh i fte d
to w ard s “vi d e o sn ack i n g”
Proportion of Content Type – Watched in the Past 24 Hours
80%
70%
60%
50%
40%
30%
20%
10%
0%
Full Length Movies Full Length TV Shows Short Clips
T h e a v e r a g e v id e o v ie w e d o n
the w e b w a s
5 m in u t e s lo n g
Source: Yahoo & Interpret study as reported on TechCrunch, by Erick Schonfeld, 6/29/2011 5
9. Distributed media far outpaced growth by destination sites over the last 12
months. It even grew faster than Hulu, Facebook, and Vevo
2011 Growth in Aggregate Video Views by Property Type*
146% 153%
82%
49% 54%
37%
28%
13% 17%
Aggregation General Video Content Total Internet YouTube Exchanges Video Ad Syndicators
Web Specific Creation Networks
Properties
Major Media Distributed Media
Example
Properties
* January to December 2011. Property types based on Video LUMAscape accessed
2/14/2012. Aol re-classified as Content Network based on preponderance of 5Min streams. 9
10. • Video viewership has changed fundamentally
• The economics of the business have shifted
• There’s hope (for those who want it)
10
11. O n li n e vi d e o ad d o llars are n ’t flo w i n g to trad i ti o n al m e d i a…
th e y’re flo w i n g to th o se th at aggre gate au d i e n ce acro ss si te s
comScore Video Metrix Top 20 Properties*
1. Hulu 11. CBS Interactive
2. ADAP.TV 12. Viacom Digital
3. Tremor Video 13. SpotXchange Video Ad Market
4. BrightRoll Video Network 14. ESPN
5. Specific Media 15. TubeMogul Video Ad Platform
6. Videology 16. Adotube
7. AOL, Inc. 17. Google Sites (YouTube)
8. Undertone 18. Grab Media
9. Auditude, Inc. 19. Yahoo! Sites
10. Microsoft Sites 20. ABC Television
Aggregation Traditional Media Digital Media
* Ad views; December 2011 11
12. It costs $2-5MM for major media to produce a web series…most
often with unclear pathway towards profitability
Costs = $2MM
Brand Building?
Revenue = $0.4MM
$300
$10
$96
Own Site
Costs Revenues (Net)
Source for Partner’s on-site data: comScore Video Metrix 12
13. Syndication companies partner with publishers & media companies to
increase video views up to 20x over on-property volume
Monthly Video Views
11.0
Total Views (MM's)
7.0
On Own Via On Own Via
Site Syndication Site Syndication
0.5 0.4
Womens Lifestyle Focus News Focus
22x greater views 11x greater views
Source for Partner’s on-site data: comScore Video Metrix 13
15. By lowering production costs and relying on third parties for
audience, content producers can find profitability
Costs = $2MM
Costs = $1MM Revenue = $1MM
$600
Syndication
$300
$10
$96
Own Site
Costs Revenues (Net)
Source for Partner’s on-site data: comScore Video Metrix 15
17. But won’t mobile video save the day?
“ M o b i l e v i d e o …( r e p r e s e n t s ) 13 %
o f o u r d a ily v ie w s . ”
- S u z ie R e id e r , h e a d o f A d
S a le s , Yo u T u b e + G o o g le
D is p la y
17
18. And social?
0 . 6 % o f v id e o s o n
F a c e b o o k a r e m o n e t iz e d *
*comScore Video Metrix – February 2012 18
19. • Video viewership has changed fundamentally
• The economics of the business have shifted
• There’s hope (for those who want it)
19
20. Only one major media company* grew their video views faster
than the internet as a whole in 2011: AOL
2011 Growth in Monthly Video Views
8 Different Large Media Companies
103%
49%
38%
21% 22%
14%
Major Media Major Media
-11% Major Media Major Media Major Media Major Media Internet as a AOL
#1 #2 #3 #4 #5 #6 whole
-30%
*Includes only those with at least 25MM monthly streams 20
21. So what did AOL do?
Addressed high content Embraced offsite
production costs distribution
Acquired Acquired
January 2010 October 2010
21
22. And keep an eye out for the newest player in the space
has acquired
22
23. So what are the lessons to be learned
• Lower your production costs
– Not all content has to be broadcast quality
• Embrace off-site distribution
– Produce content that extends beyond your site
– Seek technology platforms that enhance
distribution beyond your site
– Demand ad serving + reporting that integrate
easily with third parties
– Provide incentives + training for your sales teams
23
24. O n lin e V id e o M a r k e t :
T h r e a t , O p p o r t u n it y , o r B o t h ?
A p r i l 2 0 12
Andrew Taylor
VP of Business Development
ataylor@grab-media.com
(773) 450-9461 24
Editor's Notes
Asked here to talk about the impact of online video to major media. I’m here to tell you three things: Online video is a major threat—nearing crisis proportions—for major media Most major media currently in the video business will be caught flat-footed as the world shifts around them in the next five years There is, however, a roadmap for success
Of the top 100 properties on YouTube today, one two are what most would reasonably call major media: #51 Vevo and #79 The Ellen Show Recognizable brands
Asked here to talk about the impact of online video to major media. I’m here to tell you three things: Online video is a major threat—nearing crisis proportions—for major media Most major media currently in the video business will be caught flat-footed as the world shifts around them in the next five years There is, however, a roadmap for success