Posts for 'Downloads'

Two conversations I had last week, with executives at two separate independent video content companies, one based on a pay model, and the other on an ad-supported model, struck the same theme: the "grass must be greener" for other's model.

These conversations were illustrative of others going on across the video landscape today. Everyone's grappling with which model offers more profitability, stability and growth. At least for now, ad-supported appears to have the "greener grass".

Paid sites are struggling with the fact that so much video has come online in the past couple of years that the bar to get users to open their wallets moves higher each day. The question becomes, "what sorts of video are consumers truly willing to pay for when so much is now available for free?" Of course, the more free stuff there is, the less compelled users feel to pay, even to get something good. Thus a major struggle ensues for pay sites to generate sufficient volume to become profitable.

The rising supply of video makes life equally tough, if not tougher, on the ad-supported sites. Breaking through the noise with quality content is no simple trick. Great content is table stakes. I think the real differentiators are great marketing and distribution which leads to significant awareness, traffic and revenues. So skills like knowing how to create a viral wave, strike partnerships with portals that have real teeth, and syndicating to many smaller players, are all paramount. And that's all before the skills required to sell ads and actually generate revenue.

The grass will remain greener for ad-supported for some time to come. When broadband to the TV becomes widely adopted, Hollywood is willing to cannibalize DVD revenues, formats are further standardized and consumers are better acclimated to broadband delivery, the pay model is going to take off. The ad-supported model is no layup, but with the right ingredients, success is currently attainable.

On Friday, AP carried the news that Google intends to stop offering paid downloads at Google Video and that it will discontinue support for any downloads made since its launch. Thus ends one of the most anachronistic initiatives I've observed in the broadband video industry.

I was at CES in January 2006 when Google co-founder Larry Page delivered a keynote in which he launched Google Video Store. The press release is here. My recollection of the event is still quite vivid. First, it was such a mob scene that just finding a place to watch the speech was an exercise unto itself. I ended up watching it in a courtesy tent packed cheek-to-jowl with hundreds of others.

As Larry introduced Google Video Store, I kept thinking to myself, "How is that a company with Google's IQ could have made such a startlingly bad product decision?"

Go back to that time for a moment, and imagine that you are Google. You are the foremost company in the world at monetizing content through advertising. You have the ability to meet with the CEO of every major media company in the world -- companies whose video is disproportionately supported by advertising. You have the opportunity to suggest trials, experiments and potentially longer-term deals to bring these companies' video online in an ad-supported manner. You can tantalize them with online riches beyond what they currently collect on-air. And you can be their trusted partner, with the Internet's leading technology, to help figure it all out.

(By the way, at the time, Google's official word was that their choice of the paid model was the only way they could get their hands on full length programs. Yet, just 3 months later, Disney/ABC announced online distribution of ad-supported full length programs. So this was clearly already in the works before January, 2006).

Instead of doing all of this though, you decide to launch using a commerce model, thus completely turning your back on all of the company's massive online advertising horsepower. In doing so, you choose to compete with Apple's iTunes, which has dominant market share and is seamlessly married to the wildly popular iPod. And in an act of arrogance and silliness, you decide to launch your own player, thus rendering all of the premium video incompatible with WMP, Flash, Real and other devices.

And yet, all of this is exactly what Google did. Somehow it managed to persuade premium content providers like Sony BMG, the NBA and Charlie Rose to partner. And it even managed to get Les Moonves, CBS's CEO to come on stage with Larry and make a fawning speech about how excited he was to be a part of all this action.

Now in August, 2007, 20 months later, Google Video Store is dead. Hallelujah. What a ridiculous distraction it has been. I have written over and over that I believe Google is one of the best-positioned companies to exploit broadband video. And yet, like Yahoo most prominently, I still view Google (outside of its YouTube acquisition) as all thumbs in this important new market.

For example - whatever happened to Google's deal with MTV to syndicate its content through the AdSense network? Did anything important come out of that, which might be used for other partners? What's going on with "click-to-play" video ads? And, any updates on Google for TV ads announced in April with EchoStar? Then there's the overhang of the Viacom lawsuit and the introduction of ‘fingerprinting' technology from Google to deter copyright violators. Recently it's looked like its introduction is imminent, and yet no firm timetables have been established.

I'm still expecting big things out of Google in the broadband video area, and I was encouraged to see Gabriel Stricker say in the AP piece that "The current change is a reaffirmation of our commitment to building out our ad-supported...models for video." I hope Google means it.

Last night I watched "Thank You For Smoking" (great movie by the way) courtesy of Amazon Unbox and TiVo. I took advantage of the companies' recent announcement which lets TiVo owners choose to have their Unbox videos delivered directly to their TiVos. The whole experience was seamless - linking my Amazon and TiVo accounts, selecting the movie in Unbox, downloading it, watching it, etc. My only complaint is that it was available for only 24 hours after starting it, which is obviously a studio issue, not an Amazon or TiVo issue. However, for the sheer "video-on-demand" spontaneity of finding a movie while already online, and then watching it shortly after, it's hard to beat this.