Posts for 'NBC'

Yesterday's post, "Broadcast Networks' Use of Broadband Video is Accelerating Demise of their Business Model" spurred some great comments on the site, and as usual, a flurry of private emails to me from folks who don't want to comment publicly (this is a recurring VideoNuze phenomenon I've mentioned before...).

Since there's substantial interest in this topic and I thought some of my comments from yesterday needed some clarification, I want to dig in a little further today.

First I want to address the numbers I outlined, especially the benchmark of $1 of ad revenue per viewer per episode that I asserted NBC derives from "Heroes" on-air. I've had some push back that this number is too high and that it more likely is 50-75 cents/viewer/episode. As I refined my assumptions further, I do think I was probably a bit too optimistic, particularly regarding the actual number of ad units NBC sells. I do think all of these numbers are somewhere in the ballpark, but what they actually are on a show-by-show basis is obviously only known only to NBC itself.

That all said, the gap between today's "analog dollars" and the revenue being derived from online distribution (the so-called "digital pennies") may still be pretty close to what I suggested yesterday. That's because I also had push back on my assumption that Hulu is generating an effective CPM of $60 (note, I had characterized that as "generous"). According to some folks, it's possible their eCPM could in fact be closer to $30 - or less. This is all private data, so again, it's really hard to pin this down.

One point I'd like to make again, so nobody's left with any misimpressions: I don't believe networks have been wrong in pursuing online distribution of their shows. I applaud their proactivity. Rather, my problem is that I think the way they've chose to monetize broadband delivery - with such a paucity of ads - is not only under-monetizing and undervaluing their product, but also creating a set of consumer expectations about the online medium that are going to be hard to reverse.

For Hulu to put the equivalent of 1 1/2 minutes of advertising against "Heroes," when NBC can command premium on-air rates for about 20 minutes of ads, strikes me as seriously out of whack. At the risk of sounding anti-consumer, I think Hulu is hurting its parent company's financial interests by over-emphasizing its user experience. The consequences of Hulu's "limited commercial interruptions" policy are really the thesis of yesterday's post: I believe the networks own use of broadband is accelerating the demise of their traditional ad model.

To be clear, I'm not suggesting Heroes on Hulu should carry 20 minutes of ads, but I do think it can carry more than 1 1/2 minutes. As important, its ad model needs to quickly evolve to include better targeting, more engagement, more creative units, etc, to break from a purely CPM-based paradigm. I know that many folks are hard at work on these items.

Net, net, these are incredibly complicated times for networks. As the Portfolio piece says, NBC's Zucker is "unsparingly harsh about the prospects for broadcast television..." And NBC's issues don't end with broadband; as commenters to yesterday's post noted, it's also being buffeted by the effects of DVRs, VOD and fragmentation driven by social networks, mobile and other shifting consumer behaviors.

I love Zucker's sense of honesty and urgency about the network business. I thought NBC's hardheaded approach to obtaining variable pricing from iTunes was terrific. And as many of you know, I think Hulu's site execution has been world-class. But Hulu, NBC, and the other networks must recognize that their current approach to ad-supported broadband delivery is undervaluing their own product and hastening the demise of their traditional P&L.

What do you think? Post a comment now!

Last weekend I finally got a chance to read "Zuckervision," the splashy cover page piece about NBCU's CEO and president Jeff Zucker in the September issue of Conde Nast's Portfolio magazine. It's a pretty candid expose of the challenges that Zucker faces turning around the flagship NBC brand. More broadly though, it describes the challenges that all network executives have in trying to profitably navigate the digital era.

Zucker says, "Predicting what the media world is gonna look like in eight years is incredibly daunting. I defy anybody to that." He's right, and I'm not going to take him up on his offer. What's more salient though is to focus on the here and now - on what networks are doing with ad-supported broadband distribution today. From this perspective I think it's fair to conclude that broadcast networks' current use of broadband is accelerating the demise of their business model.

That's right. For all of Zucker's and his compatriots' lament about "analog dollars being turned into digital pennies," as best I can tell, the networks themselves are actually the ones most responsible for turning this fear into a reality. I touched on this in a previous post, but here are the numbers explaining why.

When each of us, watches an episode of NBC's "Heroes," for example, on-air, NBC generates approximately $1.00 of advertising revenue (assuming NBC sells 75% of the 22 minutes of ads at a CPM of $30). That $1/viewer/episode figure obviously varies by program, but it's a good benchmark to use. (Note: per the following post, I think these assumptions are a little high, a more accurate range for NBC's revenue/viewer/episode is probably $.50 - $1.00.)

Now consider what happens when we watch "Heroes" on Hulu, NBC and Fox's well-respected aggregator. There are 5 ad breaks with just one 15 second ad in each break. There's also a 7 second "brand slate" at the beginning of each episode ("The following program is brought to you by....") and a display ad at the conclusion. Rounding up, let's say that totals three 30 second ads. Assuming Hulu sells all the ads at a generous $60 CPM (note that's 2x the on-air rate), the revenue/viewer/episode is 18 cents. That means that when you watch Heroes on Hulu, NBC is generating less than 20% of its customary revenue (hence the "digital pennies" fear).

Hulu's ad implementation is not unique - if you look at the other network sites, their ad models are roughly comparable. I don't know who came up with this ad approach, but I would contend that in their zeal to move prime time programs online, the networks have all gone too far in emphasizing a user-friendly experience over sound business discipline.

Of course, as consumers this new ad model is great. We get high-quality, free content at our fingertips, with minimal interruptions. For the vast majority of consumers, this value proposition beats buying and downloading an episode at iTunes any day (all the more so as popular shows like Heroes are bound to cost even more under NBC's new variable pricing relationship with Apple).

With the current model, NBC needs for Hulu to get more 5x its current CPM (which would be more than 10x NBC's current on-air CPM) just to stay even with its traditional ad model. That's a pipe dream. It doesn't matter how much interactivity or exclusivity Hulu can give an advertiser (and by the way Nissan already had full exclusivity in the Heroes episode I watched) no advertiser is going to pay 10x on-air rates. Simply put, Hulu's and others' minimal quantity of ads cannot be compensated for using higher prices.

Now that the genie is out of the bottle with the networks' online ad model, it's going to be awfully hard to make major modifications to it. As eyeballs inexorably shift from on-air to online, NBC and the other networks' top line ad revenues is going to get pinched. Also poised to bear the brunt is the whole Hollywood community accustomed to benefiting from on-air economics (Zucker's aggressive attempts to reduce expenses are also discussed in the Portfolio piece).

Bottom line: the way NBC and other networks have implemented broadband accelerates the vast change that is buffeting the broadcast business.

What do you think? Post a comment!

Welcome to September. Before looking ahead, here's a quick recap of 3 key topics from August:

1. Advertising model remains in flux

Broadband video advertising was a key story line in August, as it seems to be every month. The industry is rightly focused on the ad model's continued evolution as more and more players in the value chain are increasingly dependent on it. This month, in "Pre-Roll Video Advertising Gets a Boost from 3 Research Studies," I noted how recent research is showing that user acceptance and engagement with the omnipresent pre-roll format is already high and is improving. However, as many readers correctly noted, research from industry participants must be discounted, and some of the metrics cited are not necessarily the best ones to use. I expect we'll see plenty more research - on both sides of pre-roll's efficacy - yet to come.

Meanwhile, comScore added to the confusion around the ad model by first highly ranking YuMe, a large ad network, very high in its reach statistics, only to then reverse itself by downgrading YuMe, before regrouping entirely by introducing a whole new metric for measuring reach. In this post, "comScore Gets Its Act Together on Ad Network Traffic Reporting," I tried to unravel some of this mini-saga. Needless to say, without trustworthy and universally accepted traffic reporting, broadband video is going to have a tough slog ahead.

2. Broadband Olympics are triumphant, but accomplishments are overshadowed

And speaking of a tough slog, the first "Broadband Olympics" were a huge triumph for both NBC and all of its technology partners, yet their accomplishments were overshadowed by a post-mortem revenue estimate by eMarketer suggesting NBC actually made very little money for its efforts. This appeared to knock broadband video advertising back on its heels, yet again, as outsiders pondered whether broadband is being overhyped.

The Olympics became a hobbyhorse of mine in the last 2 weeks as I tried to clarify things in 2 posts, "Why NBCOlympics.com's Video Ad Revenues Don't Matter" part 1 and part 2. These posts triggered a pretty interesting debate about whether technology/operational achievements are noteworthy, if substantial revenues are absent. My answer remains a resounding yes. But having exhausted all my arguments in these prior posts, I'll leave it to you to dig in there if you'd like to learn more about why I feel this way.

3. Broadband's impact is wide-ranging

VideoNuze readers know that another favorite topic of mine is how widespread broadband's impact is poised to become, and in fact already is. A number of August's posts illustrated how broadband's influence is already being felt across a diverse landscape.

Here's a brief sampling: "Vogue.TV's Model.Live: A Magazine Bets Big on Broadband" (magazines), "Tanglewood and BSO Pioneer Broadband Use for Arts/Cultural Organizations," (arts/culture), "American Political Conventions are Next Up to Get Broadband Video Treatment," (politics), "Citysearch Offering Local Merchants Video Enhancement," (local advertising) and "1Cast: A Legit Redlasso Has Tall Mountain to Climb" (local news).

I expect this trend will only accelerate, as more and more industries begin to recognize broadband video's potential benefits.

That's it for August and for the busy summer of '08. Lots more action to coming this fall!

Two days ago, I posted "Why NBCOlympics.com's Video Ad Revenues Don't Matter." I'll take the risk today of "beating a dead dog" by writing again about this same topic, for a couple of reasons.

First, there were some great comments on the site and I received many emails both supporting and challenging my arguments. (As a sidenote, I've discovered an interesting dynamic with VideoNuze - though I've repeatedly tried to encourage readers to post comments so all readers are able to see, folks seem more comfortable just emailing me directly for a one-on-one dialogue. I'm not going to resist human nature here, but again, I would love even more if you share your reactions by posting a comment so the whole community benefits!)

Second, the real trigger for writing a follow-up part 2 today is an incident I experienced yesterday. I gave a presentation about broadband video to a group of investors. These were mainly people who are familiar with broadband video, but not necessarily steeped in it. Upon finishing up and opening the Q&A, an early question/comment was, "Hey Will you lay out great points about broadband, yet I just read somewhere earlier this week that even NBC's Olympic video, which should have been a big revenue opportunity if ever there was one, generated little money for NBC and looks like it was a total failure for them. Given that, why should people bother investing in this medium? It doesn't seem promising."

Ugh. Ugh. Ugh. This is exactly the perception that I sensed would be created out of the blogosphere's and mainstream media's coverage of eMarketer's NBCOlympics.com revenue estimate. And why it is so vital that people interested in broadband video not get distracted by this single data point. Instead, maintaining perspective about where the industry stands and what needs to be done to grow should be the real focus.

I totally get the point made by people in their comments and emails that video providers must show they can make real money in the broadband medium. Ultimately, that's paramount. In particular it's key that broadband not get tagged as the "digital pennies" medium, in contrast to the traditional "analog dollars" model.

But I'll continue to insist that the path to industry revenues and profits begins by demonstrating the technical/operational viability of the broadband medium, massive user adoption of it and differentiated engagement with it. To be sure, progress is being made on all fronts. Still, there is still a long road ahead to drive significant shifts in advertiser spending to broadband. If you're a media buyer today, you're very intrigued by broadband and are likely experimenting with it.

But you're looking for more proof points before making bigger spending commitments. Can broadband's architecture scale to handle massive traffic loads, or are the Chicken Littles right that the Internet will crash under video's massive weight? Can broadband video's quality compare with TV, and HD in particular? Given the broadband choice, will users in fact shift their consumption patterns? And if they do, how different will their awareness and engagement with ads be? Importantly, when is broadband video actually going to be widely and easily available on TVs, not just computers?

These are but a few of the questions repeatedly being asked. And many of these are what NBCOlympics.com has helped to answer. NBC could have done lots of things to squeeze more money out of its Olympics video (though my guess is that no matter what revenue they generated cynics would have still said, "Is that all?"). Instead they focused on user value/experience and pushed the broadband envelope considerably. Others are doing the same. More needs to be done, and I believe it will.

As the saying goes, "Rome wasn't built in a day." So too with this exciting new medium. Revenues will not gush immediately. Staying focused on the core building blocks is the key. In short, I'm bullish long-term, but highly realistic short-term.

What do you think? Please post a comment! Or send me an email if you really prefer!

There was much reporting yesterday of eMarketer's estimate that NBC generated revenue of $5.75 million from its broadband Olympics video. The firm's press release dismissively called the sum "a passable performance." Others, from the blogosphere to mainstream media piled on, characterizing NBC's video revenues as underwhelming, using terms such as "pittance," "piddling," and "unimpressive."

Let's hold on a second here. At the risk of sounding like an irrepressible NBC supporter, I'd like to offer the alternative viewpoint: NBCOlympics.com's video ad revenues actually don't matter.

Don't get me wrong, when it comes to high-stakes Olympics broadcasting - and a sagging economy to boot - every dime counts. Rather, my point is that by focusing on the broadband ad number (which at virtually any level would have been a mere rounding error on NBC's $1 billion+ of overall Olympic ad revenues) we are getting distracted from NBC's real and very valuable broadband accomplishments.

Consider this: there were more on-demand and live sports choices for Olympics viewers than ever, NBC and its technology partners conquered herculean operational challenges without any major snafus and the foundation was laid for broadband to play an increasingly important and integral role in all future iconic programming events.

Focusing just on the operational achievements for a moment, a conversation I had yesterday with Brick Eksten, President of Digital Rapids, the company that provided all of the video encoding and streaming technology for NBC's live streaming events was a reminder of all the complexities NBC and its partners took on. There were up over 100 live simultaneous feeds that needed to be ingested, encoded in multiple bit-rates and delivered in real time across the globe to the right distribution points. All of this had never been done before.

Unlike domestic implementations or those focusing mainly on on-demand delivery, live broadband delivery from China meant spec'ing out all the delivery systems in advance and then shipping all of the gear well in advance of the event itself. There were many unknown variables, beginning with the vast potential range of concurrent users. So long hours were invested by partners modeling different scenarios to meet targeted delivery quality goals. Compounding matters, Brick explained that due to space, manpower and time limitations, Digital Rapids and others were challenged to push their systems to do things not previously done.

Meanwhile, NBC faced a pioneer's balancing act, simultaneously trying to preserve the value for its on-air broadcast rights/supporting advertisers, while meeting consumers' expectations for broadband on-demand access to everything. NBC could have chosen to charge for broadband access (as CBS originally did with March Madness, and as MLB continues to do) or provide only highlights clips or nothing via broadband at all. Instead, it offered up - at no charge - 2,200 hours of live streaming and 3,000 hours of on-demand.

Some fans on the sidelines have groused this wasn't enough. Now some analysts are saying that NBC could have generated more ad revenue if it had opened the broadband spigot further. These comments miss the bigger point: NBC moved the broadband market dramatically forward with its Olympics coverage. Focusing on what NBC proved with the first "Broadband Olympics," rather than what attributable revenue it generated, is what's most important for all of us to remember.

What do you think? Post a comment now.

Last Friday, in "Get Ready for the Broadband Olympics," I posited that the '08 Beijing Games would be looked back upon as the first "Broadband Olympics." NBC has made a massive investment in delivering the portions of the Games both live and on-demand via NBCOlympics.com and other outlets. A week into the Games, the broadband coverage and user experience is exceeding my and others' expectations.

First the numbers, which are staggering. NBC has been pumping out news releases on a daily basis touting their Total Audience Measurement Index or "TAMi" rating, broadcast audience records and online usage. Focusing just online, through yesterday NBCOlympics.com has attracted 25 million unique visitors, driving 456 million page views and 22 million video streams which total 3.5 million hours of video consumed. These figures easily outpace the '04 Athens Games.

A major drawing card in the '08 Games is of course Michael Phelps's drive for 8 golds. And so far the peak dramatic event in the Phelps narrative was the 4x100 freestyle relay in which teammate Jason Lezak swam the split of his life. That thrilling video alone has been viewed over 2 million times, providing a textbook example of how unique Olympic moments are tailor-made for broadband on-demand coverage. (Note, while not a big swimming fan myself, I have to admit I've watched the last leg of that race a half dozen times. If you haven't seen it, it's an absolute must)

Meanwhile, the live streaming has been a fun element of NBCOlympics.com. I've found myself periodically perusing the little red "LIVE" flags on NBC's home page and tuning in briefly to sample sports I have no affiliation to, but are neat to dip into briefly (e.g. women's badminton or table tennis).

Overall, the user experience is excellent. Beyond the well thought-out navigation, a key part of the experience owes to Microsoft Silverlight which enables totally new broadband video capabilities. Picture-in-picture, 4 live concurrent streams, zero-buffer rewinding, and of course glorious video quality (even in large-screen mode) are all breakthroughs. So far I haven't seen or heard about any delivery or viewing glitches.

Through NBC's massive investment in broadband coverage, consumers are going to enjoy a completely different Olympic experience, obsoleting many of our traditional responses around missing key Olympic moments: "I just couldn't stay up so late to see that one" or "Hopefully they'll replay that one, I'd really like to see it, or "My kids wanted to see that one but it was during school."

It's hard to imagine a sporting event, or any other event for that matter, better suited to broadband coverage. The two key challenges of Olympic broadcast coverage have always been the limited shelf space that just one broadcast channel provides (leading to coverage of only the most popular sports, and even then mainly the final rounds) and the time zone differences, which have created an awkward scheduling mix for U.S. prime-time.

NBC, which has been touting its broadband Olympics coverage for months, has addressed these by offering a package of 2,200 hours of live streaming and 3,000 hours of on-demand highlights. The scale of NBC's broadband undertaking is unprecedented, and will easily create a new case study for future broadband event producers.

To get a little glimpse of how just the on-demand portion of coverage will work, yesterday I spoke with Anystream's CEO Fred Singer and COO Bill Holding. Anystream is a key media production and publishing partner of NBC's, essentially handling all of the work flows for the 10,000 video assets that will be available on-demand.

Fred and Bill gave me a sense of the massive complexity involved in ingesting video from the other side of the planet, processing it in a fraction of the customary time allowed, and then distributing it within minutes - according to an elaborate set of rights and business rules - to 16 partners in multiple formats. Often I speak of the complexity involved in the Syndicated Video Economy; there is no better example than the distribution of Olympics' video.

Lastly of course, there are all of us consumers. While unprecedented coverage is available at NBCOlympics.com and elsewhere, to actually enjoy it entails getting down the learning curve of what, where, when and how individual sports will be offered. In short, massive choice requires consumer involvement. Nevertheless, I expect we'll be hearing about some very impressive broadband stats from NBC over the next two weeks and thereafter.

Let the Games begin!

I continue to be surprised that more long-form premium content providers have not pursued initiatives to slice and dice their programs into a non-linear user presentation. This is what "The Daily Show" has done at its site, deconstructing every episode into searchable clips. I think it's a big opportunity to drive more fan engagement, new ad inventory and provide insight about new programming ideas.

While this idea is a natural for archived sports and news programming, I think the model applies to scripted programs as well. Here's an example:

As I've written before, my wife and I were huge fans of "The West Wing" during its seven-year run on NBC. While we now own the full DVD collection, periodically I'll talk to someone about the show and reminisce about a specific moment from years back. (In fact, TWW seems cosmically related to the current election cycle, given the show's last narrative around 2 candidates - one younger and one older - battling to succeed Bartlet.) This spurs many of those, "boy, I'd love to see that scene right now!" moments.

So wouldn't it be awesome if NBC or Warner Bros. (its producer), or whoever has the rights, were to create a site where all the episodes were archived and fully indexed for searching? This would go far beyond the show's current lame-o web site. I could type in "Bartlet speeches," "Josh meltdowns" or even "C.J.-Danny fights" and instantly see collections of relevant clips.

Before you accuse me of being geeky, stop and consider that we all have our favorite programs and love to relive memorable lines and moments. I'd argue that a really vibrant community could be built at these sites, attracting traditional advertisers eager to continue their audience relationships. Then of course there's the opportunity to embed clips into Facebook and MySpace pages, extending the community further. And think about what this ongoing loyalty would do to drive up the value of broadcast syndication rights.

The big challenge here is indexing the archive. The process must rely heavily on accurate metadata generation, but in a highly scalable, cost-effective manner. That's a mouthful of requirements, so clearly this isn't easy stuff. Various players are trying to crack this nut; two which I've previously written about are Gotuit (which is announcing a partnership with Move Networks today) and EveryZing, but there are others too. Recently I've had briefings with 2 companies that are investing in this area and will have news in the coming months.

Long-from premium providers are facing an onslaught of competition from short-form alternatives while also commonly experiencing a shortage of available inventory. Non-linear presentations of their content addresses both these issues, while delighting loyal fans. I see this as an emerging and sizable opportunity.

Am I missing something here? Post a comment now!

Baby Ruth hit a home run at Tuesday night's All-Star Game with its "Take Me Out to the Ballgame" user generated video contest. The contest was heavily promoted during the All-Star Game and ran in association with Major League Baseball.

In case you missed it, the challenge was to creatively sing the classic ballpark tune in 2 minutes or less. The contest received dozens of submissions, which were then narrowed to a list of finalists, judged by a committee of three. The judging criteria was weighted heavily toward originality, but also included creative use and/or incorporation of the Baby Ruth brand, ensuring that the candy maker got strong visibility in the videos. The winner got to perform during the 7th inning of the game. (I didn't see this part of the game, so I don't know if it happened. Note a peeve is that MLB/Baby Ruth should be offering video of the winner singing at Yankee Stadium, which would be an instant classic, but doesn't seem to be.)

Still, I'm a big fan of UGV contests like this especially when the brand, contest and tie-in event all harmonize, as was the case with this Baby Ruth contest. Though these contests require significant upfront coordination, the payoff is that they are a unique branding opportunity that can inexpensively break through today's ad clutter. Not to mention these contests are a real crowd-pleaser, playing on the same voyeuristic viewer impulses that programs like American Idol have tapped into brilliantly.

I've said repeatedly that the abundant volume of UGV available at YouTube and elsewhere provides evidence that there's a ton of amateur talent out there. Brands and others that figure out how to leverage it can generate excitement and deepen customer engagement. In addition - and with a little luck - these videos can also turn into viral sensations, driving a near infinite ROI for the underlying brand.

Other recent examples that combine UGV with high profile events include Dove's "Supreme Cream Oil Body Wash Ad Contest" (in conjunction with the Academy Awards) and MySpace/NBC's "Decision '08 Convention Contest" (in conjunction with this summer's political conventions). I expect more to come. If you see examples, please let me know!

What do you think? Post a comment now!

Yesterday came a further positive sign that user-generated video may be elevated from the domain of karaoke-singing cats, faux-skateboarding accidents and exploding soda bottles.

That positive sign was MySpace, NBC and MSNBC's announcement of a new citizen journalism initiative dubbed the "Decision '08 Convention Contest." In it, MySpace users are encouraged to submit short videos answering one of three questions, "Why do you vote?" "Why are you the best person for this job?" or "How will you stand out in the crowd and get the scoop no one else can?"

The submissions will first be judged by a panel of experts from MySpace and NBC, with five finalists revealed for the MySpace community to vote on. Two winners will be selected, one to attend the Democratic convention this summer, and the other to attend the Republican convention.

To learn more about the contest and the motivations behind it, yesterday I spoke to Liba Rubenstein, MySpace's Manager of Public Affairs, who is essentially the product manager for the IMPACT channel, MySpace's hub for civic and social engagement. Liba explained that MySpace has used this type of contest frequently, and to much success. MySpace community members love getting involved and expressing their creativity. The two level judging process is meant to balance the experts' high editorial standards with members' passion and enthusiasm. Liba added that in particular MySpace and NBC are gaining insights about how to fuse traditional media with web 2.0. (And in a classic "doing well by doing good" vein, maybe NBC will discover the next Tim Russert in the contest.)

I like the Decision '08 contest for a variety of reasons. First and most importantly, it allows UGV to be directed to an important social use: increasing citizens' involvement in the democratic process. In this way it continues on what YouTube's YouChoose '08 pioneered by allowing its users to upload video questions in the recent primary debates. It may sound somewhat idealistic, but I really like the notion of broadband video doing its part to strengthen the functioning of America's democracy - even more so as we approach July 4th in this election year.

Further, I think the convention contest provides an example for how others outside the political realm might consider harnessing the creativity and passion of their members to use UGV in a directed purpose. One example that comes right to mind is in the education field. For example, wouldn't it be cool if educators uploaded UGV of themselves in action, explaining and demonstrating their proven teaching methods? I got a glimpse of some of this happening already, while doing a project last summer for the George Lucas Educational Foundation. There's no shortage of other examples.

There has been much hand-wringing about whether UGV can ever be monetized through advertising, a debate that will no doubt rage on. Alternatively, I for one would like to see more energy put into purpose-driven UGV projects like the MySpace-NBC convention contest. While I enjoy the cats, skateboarders and soda bottles as much as the next guy, I continue to believe the UGV medium can ultimately be so much more.

What do you think? Post a comment now!

In the heat of the Democratic primary, the five major Sunday morning talk shows have recently taken on greater prominence. For political junkies like me, even after a week's worth of endless campaign coverage, it is great sport to watch the candidates and their surrogates put the best face on the week's events, while eagerly trying to tee up issues for the coming week's news cycle.

The Sunday shows are also perfect fodder for broadband video consumption. On-air they are neatly segmented by guests and topics, their archives offer a vivid research opportunity for both editorial and user-driven curation, and the audiences that tune in are upscale and appealing to advertisers.

With all this going for them, I decided to investigate the online presence of the five Sunday morning shows, ABC's "This Week with George Stephanopoulos," CBS's "Face the Nation with Bob Schieffer," FOX's "Fox News Sunday with Chris Wallace," NBC's "Meet the Press with Tim Russert" and CNN's "Late Edition with Wolf Blitzer."

Though all of the sites had their strengths, as a group I found them to be surprisingly average initiatives, especially in comparison to the superb efforts these same networks have mounted for their online entertainment programming. (Note that all I found for "Late Edition" was a brochure page)

"FTN" would have to rank at the top of my list, primarily because it segments the show by its guests and topics and displays them in the user-friendliest manner. This allows the user to quickly zero in on desired segments. "This Week" and "MTP" do some of this as well, though I found their presentation not as straightforward. What's missing from all are related clips across episodes curated in a meaningful way. Presentation is very episode-centric.

While all the sites rely heavily on pre-roll ads, "FTN" gets credit for using some frequency capping. "This Week," seems to ignore the best practices that ABC.com follows in presenting its shows with limited interruptions. Not only does it not frequency cap, it also ran the same 2 ads - one for Intel and one for Verizon Wireless - over and over. Needless to say this became tiresome after clicking to watch several segments.

Meanwhile, navigation and available content on these sites are all over the board. "MTP" offers a link to watch the whole program with limited interruptions, while "FNS" offers a text transcript of the most recent program, but not a video of the whole program. "This Week's" main text navigation has links to pure text stories, text stories with embedded video clips, and video clips alone, but no way to sort the list by media type. Search on each site also yields highly diverse results - some video, some not. One missed opportunity is that none offer any user editing features. Putting together your own highlights reel to be embedded on a blog or social networking site would likely be great fun for many hard-core viewers.

The Sunday talk shows offer dynamite content, highly leverageable for broadband consumption. Hopefully as the political season rolls on we'll see the networks recognize this and continue to invest in new features and improved usability.

What do you think? Post a comment and let us all know!

(Note: This is the first of a series of posts with companies participating in the 2008 Media Summit, a premier industry event which will be held next week in NYC. VideoNuze has partnered with Digital Hollywood, the Media Summit's producer, to provide select news and analysis coverage.)

Investors continue to show lots of optimism about the broadband video aggregator category. The latest data point is TidalTV, a new entrant that announced last week it has raised $15 million from NEA and Valhalla Partners. This comes on top of a crowd of well-funded startups: Joost ($45M+), Veoh ($40M+ to date), Building B ($17.5M), Vuze ($32M+), Hulu ($100M) and many others who are attacking this space in one way or another.

To better understand how TidalTV will distinguish itself from the pack, yesterday I had a lengthy briefing with CEO Mollie Spilman. She provided her first extensive remarks about TidalTV's game plan since last week's announcement. (Thanks to my old friend Tom MacIsaac, former CEO of Lightningcast, for facilitating the introduction. Tom recently launched Cove Street Partners and is as smart a player in the broadband video ad space as anyone around.)

The first thing to know about TidalTV is that it is pursuing mainstream users, not early adopters. This targeting pervades all its decision-making: site design is clean and approachable (Mollie said Apple is their role model), content is professional/well-branded only (no UGC), user experience incorporates a traditional linear programming sensibility combined with full on-demand access and advertising mimics traditional pods, while also integrating new broadband-only formats.

In short, TidalTV's making a bet that given how nascent broadband video adoption is among mainstream users, there is ample room to become the brand/destination of choice by providing an experience that feels more similar to traditional TV than to online. Though Mollie says that Apple is TidalTV's heaviest influence, I see clear parallels to AOL from the mid-late '90s. Recall that AOL's pervasive consumer-friendly UI, content and marketing (the Steve Case mantra) enabled it to crush all the dial-up ISPs which had more techie, complicated orientations. Watching AOL's rise made me a big believer that consumer-friendliness can indeed be a meaningful competitive differentiator if executed really well.

AOL is an interesting point of comparison because TidalTV's founder Scott Ferber was a co-founder of Advertising.com, which was sold to AOL in 2004, albeit after the Case era ended at AOL. Mollie was at Ad.com for 6 years as well. Other TidalTV executives come from Ad.com, Joost and Fox. The Ad.com lineage helps explain why TidalTV has chosen to invest significantly in optimizing its advertising capabilities rather than building a lot of its own publishing or delivery features (note TidalTV is all Flash-based streaming with no downloads and no P2P).

TidalTV has some interesting challenges ahead. First is content. It sounds like the company has made substantial progress in deals to obtain content from the "top 50 brands" which includes not only broadcast and cable network fare, but also print, online publishers and others who produce professional video. Yet Mollie concedes that "90% of TidalTV's content at launch could probably be found somewhere on-air or online," as content providers increasingly pursue widespread syndication. TidalTV's opportunity is to pull the content together in a neat, intuitive manner that mainstream users appreciate.

TidalTV will do so by using a "faux linear" presentation, which entails it becoming a "digital programmer," assembling its partners' shows into their own channelized formats (e.g. "The CSI Channel"), with traditional linear air times. For example, if you come to the site at 4pm, you'd see "what's on now" on multiple channels. At launch Mollie anticipates offering 10-15 channels, all on a revenue share basis with providers. This presentation approach is meant to appeal to mainstream users by providing a tangible link to a TV-oriented experience. If a user clicks to start watching, a linear "feed" will start playing, including ad breaks. However, TidalTV will also offer all programs on a full, on-demand basis as well.

But to illustrate how complicated the content acquisition terrain is for 3rd parties like TidalTV, consider Hulu, the NBC/FOX JV. It has insisted that prospective syndication partners take the Hulu player if they're to gain access to popular shows like "Heroes" and "24." Doing so could break TidalTV's user-friendly design. Mollie acknowledged this challenge, but felt confident that in examples like these, there should be adequate incentives to work out an arrangement. Then there's ABC, which to date has not pursued syndication aggressively. If it maintains its ABC.com centric approach, simply not making its programs available to 3rd parties, that leaves aggregators with obvious holes in their offerings. This would be especially challenging for a site like TidalTV, which appeals directly to mainstream users. Speaking generically, Mollie said that TidalTV's neutral "Switzerland" approach (i.e. no investments from media companies) should help in all of its content negotiations.

Driving traffic is another key issue. With other players in the market already, they've had a chance to build their traffic, though not necessarily in TidalTV's core target audience. For instance, Veoh alone says it's getting 20M+ unique visitors per month. To jumpstart traffic, Mollie said that TidalTV is prepared to fund an aggressive marketing plan, testing direct marketing, search, offline ads, outdoor, SEO, viral, PR and other tactics.

Microsoft grabbed the early PR spotlight at the Consumer Electronics Show (CES), now underway in Las Vegas, announcing a variety of deals across the broadband video spectrum. The deals, announced by Bill Gates in his traditional night 1 keynote, reinforce Microsoft's intentions to play multiple roles in what Gates calls the "first true Digital Decade."

Here's a look at Microsoft's deals and why they matter:

NBCU 2008 Olympics on MSN, using Silverlight

Microsoft and NBC, which has the broadcast rights to the '08 Summer Games from Beijing, announced that MSN would be the exclusive partner for NBCOlympics.com including thousands of hours of live video coverage, and that Silverlight, which is Microsoft's "Flash-killer", would be used. As I mentioned in my "6 Predictions for 2008", the '08 games are going to be the biggest broadband video event yet. The deal gains MSN lots of traffic and Silverlight lots of exposure and downloads, not to mention serious validation as a live streaming platform if it executes well.

ABC/Disney and MGM content on XBox LIVE

In a further move to bolster the premium-quality content available in XBox LIVE (the content offering that accompanies XBox 360), Microsoft announced that both ABC/Disney and MGM would now be providing both SD and HD content. These moves bring XBox LIVE's catalog closer to parity with iTunes, while keeping up the competition with Amazon Unbox and other stores. Separately, Microsoft said that XBox racked up 17.7 million units sold during the '07 holiday season.(correction, Microsoft press release misstated this number. Holiday sales were actually 4.3 million units, bringing cumulative units sold to date to 17.7 million, thx Karl)

XBox users have been remarkable active purchasers and downloaders using XBox LIVE, and previous briefings I've conducted with XBox executives suggest that the initiative has been particularly successful with HD. Since Xbox is purchased primarily as a gaming platform, it serves as a great Trojan horse opportunity for Microsoft to gain broadband access to the TV. Meanwhile, XBox LIVE has served as the deal unit for Zune's library as well, so these moves are important to watch as they benefit Microsoft's efforts to dislodge iPod from its perch as the leading digital media player. Only disappointment here is no ad-supported counterpart was announced for ABC programs, leaving AOL as ABC's only announced broadband syndication partner, as best I can tell.

BT and XBox 360 Integration

Microsoft leveraged Xbox 360 for another convergence play, announcing with BT that the company's "BT Vision" IPTV service would be available for XBox 360 owners as an integrated service offering. This means that no separate set-top box would be required for BT Vision subs. Though the box won't roll out until mid '08, this concept has compelling upside for both sides and could be a nice blueprint for future IPTV deals. It eliminates set-top capex for BT, while providing strong marketing benefits to both parties, helping drive broadband/TV convergence on the back of the popular XBox gaming console.

Showtime, TNT and CNN with new apps on Mediaroom, Samsung supporting Extender

Elsewhere, Microsoft announced that Showtime, TNT and CNN would be creating new apps for Microsoft's Mediaroom IPTV platform, which it says is now installed on 1M set-tops globally. And lastly, that Samsung will support Extender for Windows Media Center, which means that HD content can be sent over wired or wireless-N networks from PC to TV. Extender hasn't caught on yet, but Microsoft is continuing to push it as a bridge device. I've yet to test it, but have that on my list of to-do's.

Taken together, these announcements from Microsoft show the company's vast resources allow it to play a role in all aspects of the broadband era - software, devices, services, content, gaming, etc. Less pronounced in these deals was the company's recently added online advertising prowess, which will soon be applied to broadband video as well. Stay tuned for news on this front as '08 unfolds.

Driving home yesterday I caught a pretty interesting interview on NPR with Quarterlife's co-creator Marshall Herskovitz. It's only about 15 minutes, but the last 1/3 is quite insightful as Herskovitz expounds on the problems with today's Hollywood system and what he and partner Edward Zwick are doing with Quarterlife and NBC. You can listen to it here.

Last week a journalist interviewing me for a story asked: "Which industry or industries are potentially threatened the most by the rise of broadband video and on-demand usage?"

It's a tough question to answer because there are so many different variables at play. However, if pressed, my answer would have to be local broadcast TV stations. Taking aside the current WGA strike which exposes yet another industry vulnerability, local TV stations find themselves on the short end of just about every macro trend being driven by broadband and on-demand adoption. To thrive in the future, stations are going to have to radically reinvent their business models. It's by no means an impossible task, but it is going to require savvy and aggressive strategic moves.

Consider the perfect storm local stations are up against:

1. Broadcast networks (ABC, CBS, FOX, NBC) are avidly pursuing broadband distribution of their hit shows, creating competition to the traditional model of geographic programming exclusivity for local stations. Initiatives such as Hulu and CBS's Audience Network can be thought of as 'digital replicas" of the old analog affiliate model. Networks have gotten broadband religion; notwithstanding their finessed protestations, they're only going to be increasing their digital bets, leaving their affiliates with new competition for eyeballs at every turn.

2. On demand viewing is shattering prime time viewership and the all important "lead-in" to late news broadcasts. Between DVRs and VOD, more and more of the world is habituating itself to watching programs when they want to, not when they originally ran. So appointment viewing is out and along with it the concept of audience aggregation. Strip out prime time and the local station needs to build audience for its own shows and newscasts by itself.

3. Local news, weather and sports content are the mainstays of local newscasts, yet the availability of this kind of content is becoming pervasive and conveniently accessible. Remember when you had to stay up late to find out what the scores were? Doesn't that seem quaint now? These days every spec of information about these key categories is just a click away, further undermining local newscasts' value.

4. Advertisers have more options than ever and are gradually going to move spending to approaches that are both more ROI-centric (e.g. Google) and a better match for their customers' media behavior. Think about it - if you're a Honda, Scion or Volkswagen dealer targeting younger demos, is local TV really the best way to reach this audience? The range of options for local advertisers is already robust and is only going to become more so in the future.

All of this said, however, all is not lost by any stretch. With the right leadership, I happen to believe that local stations can find ways to manage their way through the chaotic days ahead. Tops on my list would be embracing broadband as a new programming platform to leverage their local expertise, blasting their content out through every possible distribution path, radically re-training their ad sales teams to be Internet-literate, cross platform-obsessed warriors and re-creating their brands' perceptions for the broadband and on-demand era.

Broadcast TV stations need to look no further than their cross-town rival newspapers to understand the gale-force competitive winds coming their way. Hopefully with these examples plainly visible, they'll prepare themselves appropriately.

This piece in today's Hollywood Reporter about a newly-released survey ("Broadband Won't Overtake TV, Execs Say") caught my eye because it continues a highly speculative, and largely irrelevant debate pervasive throughout the industry about future video consumption patterns.

Why's the debate highly speculative? Because truly, none of us has any idea how people will consume video in 2012. There are just too many variables and too many unknowns to make an accurate prediction. Here's a point of comparison: let's say 5 years ago, in 2002, you were asked what percentage of Americans would consume broadband video in a given month? How many (or few!) of us would have predicted a whopping 75%? (the correct answer according to comScore in July '07). Better yet, how many of us would have guessed that over 25% of this consumption would be at just one site (YouTube) - a site that didn't even exist in 2002? Given these examples, who's to predict what 2012 will bring?

And why's the debate largely irrelevant?

Read on by clicking here...

Why's the debate highly speculative? Because truly, none of us has any idea how people will consume video in 2012. There are just too many variables and too many unknowns to make an accurate prediction. Here's a point of comparison: let's say 5 years ago, in 2002, you were asked what percentage of Americans would consume broadband video in a given month? How many (or few!) of us would have predicted a whopping 75%? (the correct answer according to comScore in July '07). Better yet, how many of us would have guessed that over 25% of this consumption would be at just one site (YouTube) - a site that didn't even exist in 2002? Given these examples, who's to predict what 2012 will bring?

And why's the debate largely irrelevant? Because, in my opinion, it presupposes a continuation of the existing paradigm: an either/or choice of TV consumption OR broadband consumption. Yet these traditional lines of demarcation are already fading. Broadband programming is starting to migrate to networks, as in the recent case of Quarterlife's move from MySpace to NBC, while at the same time network TV programming is increasingly being consumed online. Meanwhile shorter form programming, not bound by traditional advertising pods is on the rise, further confusing industry definitions. Sites like Metacafe, blip.tv, Veoh and others are driving a whole new category of video that could eventually be a more popular format than 30 or 60 minute programs.

These days consumers themselves are driving this "broadband or TV" debate into irrelevance. They're busy accessing programming on demand - whether "broadband" or "TV" - through a host of devices and services whose popularity is only going to skyrocket in the future. These include TiVo, Xbox, Netflix, Amazon Unbox and many others. Yet traditional thinking is still pervasive. For example, just this week, the chairman of the FCC has attempted to enact new regulations governing how cable programming might be unbundled. Fortunately this initiative collapsed, but take heed, market forces will eventually cause cable operators to offer programming as consumers want it, not how tradition dictates.

I think Jim Denney, a TiVo product management VP whom I spoke with yesterday hit the nail on the head. Jim said TiVo's philosophy is to have their users "not worry about where any particular video's coming from, but rather just have all choices easily available." That strikes me as a winning business approach for the turbulent and converging 5 years that lie ahead. In my view, those companies which think about how to deliver value to consumers on their terms, rather than being guided by increasingly artificial distinctions, will be the ones to emerge as the winners in 2012.

Does TV programming beget broadband video programming or is it the other way around?

If you were expecting a simple answer, recent evidence suggests that none will be forthcoming. Step away from the relatively straightforward model of streamed or downloaded TV episodes, and the question of how original video content will be produced and distributed between broadband and TV is whole lot more complicated. Layer on the writers' strike and the world only fogs up further.

For those who see broadband as a pathway to TV, Quarterlife's deal announced last Friday with NBC to bring their new Quarterlife series to the network following its run on MySpace offers encouragement that Internet programming can move to the TV (bear in mind that Quarterlife was originally pitched as a TV series however).

Another example is TMZ.com, which has been successfully syndicated as TMZ TV this fall by Warner Bros. TMZ shows us that a brand that was created and built solely online can make the leap to TV. And just last week TV Week reported that Twentieth Television and Yahoo were close to a deal to create a new syndicated series based on popular broadband videos that they've collected.

On the flip side, there is plenty of evidence of opportunities for TV programs spinning off broadband programming, or existing TV producers with assets and skills pushing into broadband as a first outlet for their work.

Consider Sony's Minisode Network, with distribution on MySpace, Joost, AOL and Crackle. In an effort to squeeze more life out of its library of classics, in June Sony launched abbreviated versions, for broadband "snacking". This initiative is being closely watched as a model for how to repurpose existing assets to make them more palatable for attention-challenged online audiences.

And Endemol's recent deal with Bebo to produce "The Gap Year" series for exclusively for Bebo's audience shows that a successful TV producer is turning its sites on broadband as a first outlet.

All of these deals underscore broadband's disruptive nature - its ability to create new opportunities for incumbent players, and also for new entrants. My read is that most (though not all) broadband producers would love to make the leap to the TV. In the mean time, broadband offers a low-cost, interactive distribution path to experiment with more engaged audiences.