Posts for 'CW'

Daisy Whitney and I are pleased to present the 30th edition of the VideoNuze Report podcast, for September 4, 2009.

This week Daisy shares more detail from her most recent New Media Minute, concerning what broadcast networks are doing this Fall with online video extensions of their shows. For example, CW is launching an original series in conjunction with "Melrose Place." ABC is doing a 3rd season of an "Ugly Betty" web series and a tie-in for "Lost." CBS is launching its first web series, via TV.com, with Julie Alexandria, focused on recapping highlights from various shows. Daisy notes that these efforts are focused mainly on marquee shows and when advertisers are already on board.

In the 2nd part of the podcast we discuss my post from yesterday, "2009 is a Big Year for Sports and Broadband/Mobile Video." In that post I observed that many big-time sports, and the TV networks that have the rights to televise them have realized this year that broadband and mobile distribution are friend, not foe. As a result they've rolled out many different initiatives. We also touch on the various lessons other content providers can take away from what's happening with sports and broadband/mobile distribution.

Click here for previous podcasts

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Yesterday's article in the NY Times, "In the Age of TiVo and Web Video, What is Prime Time?" was the latest of many about the changing landscape of broadcast network TV. An underlying question that receives a lot of attention, yet little in the way of clear-cut conclusions: Does broadband video help or hurt broadcast TV networks?

The jumble of conflicting data and opinions on this topic (as well as the related topic of DVRs' impact on the networks) is causing plenty of speculation during this important upfront week of when billions of dollars of networks' ads are bought and sold.

Here's a synopsis of how I think proponents of each would defend their answer:

Broadband video helps: The world is changing - consumers are more empowered than ever and it's pointless to resist. Broadband is a great way to catch up on episodes missed, conveniently sample programs, engender interactivity, transform viewers into viral promoters, etc. More exposure will translate into more on-air viewership. Plus as broadband audience size builds ad revenue will as well. Network programming is and always will be the most watched, most valued source of video entertainment and with broadband opening up all kinds of new revenue opportunities, there's ample reason to be optimistic.

Broadband video hurts: Broadband kills networks' success formula, driving profitable on-air viewership to profitless broadband viewership. It's pie-in-the-sky thinking to believe that broadband revenues will ever catch up. Since only a limited amount of ads can be included in online broadcasts, even the higher CPMs received per ad deliver nowhere close to the revenue per episode per viewer as the on-air model does. All the interactivity and engagement in the world will never offset this shortfall. As more programs move online and viewers can eventually watch these right on their TVs, the shift from on-air to online consumption will only accelerate, causing permanent erosion to the traditional economic formula.

So which is it - are networks helped or hurt by broadband? I think the answer is short-term it helps, but long-term it hurts. In the short-term, there is evidence that broadband expands audiences. For example, The Office's premiere last fall 9.7 million people tuned in, but another 2.7 million watched online.

Expanding viewership is great, but what happens to networks' revenues if next fall 7.7 million watch on-air and 4.7 million online? And 3 years from now, 5.7 million on-air and 6.7 million online? You can count on viewers to gravitate to the optimal viewing experience, and if online further improves, expect more eyeballs to shift. Again, since there are fewer ads online, the only way for total network revenues to keep pace are to show more ads online (see ABC's plan on that front), dramatically raise CPMs and/or dramatically raise viewership. My guess is that even the most optimal mix of these three will not deliver enough to offset on-air's revenue decline.

Move Networks, which quietly closed on a recent $40.1 million second round, may expand it further pending diligence being conducted by one more investor. Move CEO John Edwards shared the information with me in a briefing. The company still hasn't officially announced the round or its participants. John did say they're mainly strategic investors and the official word should come in a couple of weeks. The funding comes on top of its $11.3 million first round announced in February '07.

John shared a few interesting statistics. Its customers have delivered Move-powered video to a cumulative 27 million users since March '07. Using its client, Move can track all manner of user behavior including time spent with the selected video. This yields another stat: for a single one hour episode delivered, approximately 60% watch longer than 30 minutes, with an average session length of 53 minutes.

Demonstrating that it can deliver higher-quality video and consistently longer viewing is at the heart of Move's value proposition, as it allows content providers to sell more ad inventory, driving top line revenue and ROI. Move also offers an ad module, allowing improved targeting and insertion of flexible cue points based on user behaviors plus a drag-and-drop syndication feature. The company also focuses on reducing customer expenses by optimizing delivery over multiple CDNs and augmenting this with a peer-sharing capability.

Move has a lot on its plate going into '08. John says they are running projects with all the major networks, are supporting all the live streaming for the Olympics plus lots of other live event broadcasts, rolling out integrations with set-top boxes and expanding internationally with new offices in Europe and Asia.