My Prediction is Validated About Business Model Of Video – Give Users What They Want

Taking credit for big trends is all the rage these days of blogging. So here is my self promotion post on the future of online video and future of online advertising. 🙂

Today the news in the NY Times tells us about the future of online video and advertising. It comes as a shock to many people including Mike Arrington, Mathew Ingram, and others. With headlines from Wired like Hulu Celebrates First Anniversity, Gain Popularity By Serving Fewer Ads.

As predicted by me years ago and blogged here at Furrier.org – “Content is the Ad”

Hulu’s success is due to the a great user experience verses forcing the maximizing of moneitization. That is why Hulu is not littered with Ads. Why? Because the content is the ad. SNL’s franchise on TV is their product and their online distribution (widgets) is their ad. NBC TV broadcast was the product and their online coverage was their advertising. Why do the big content people do this? This is going to sound too simple – they know what the users want. And their product (main content franchise) gets a reward for it – more viewers. Badda bing. Simple.

One more time – CPM ads don’t work in social network or online in targeted user groups – said again for the zillionth time

How do you monetize: the plans for this new content model online will be different. Expect to see new contextual and behavior tools that serve users – a utility of some sort. For now it’s all about cross-promotion.

Successful online strategies have been successful if they do three things: 1) easy to use, 2) reduce steps, and 3) save time

Anything online that distracts users will lose – online experiences must be value-add. Advertising can be value-add and I expect new advertising solutions to be of value.

Olympic Numbers – Massive Live Broadcast on the Internet ?? Who’s the biggest in Live Concurrency?

To date I’ve been trying to find the record for most concurrent viewers of a “Live” event.  NewTeeVee has a breakdown and detailed article on Internet usage on the Olympics 2008 in China.

From NewTeeVee:

NBCOlympics.com served a total of 75.5 million streams during the games despite all the uproar about Silverlight, tape delays and a bad UI. The site clocked a total of 9.9 million hours of online video coverage. That’s impressive, even if NBC’s online video advertising revenue wasn’t, but there are plenty of other success stories all around the globe.

The BBC also had some major success with its web-based offering, serving almost 40 million streams until late last week, according to the BBC Internet blog. It had almost 200,000 concurrent viewers watching a total of 6.5 million hours of Olympic coverage – and those figures don’t even include the competitions held the final weekend, nor the closing ceremony. The BBC hasn’t published any numbers for its iPlayer yet either, but anecdotal evidence suggests that the video platform saw its traffic triple during the games. The broadcaster only served 2.5 million streams during the games in Athens four years ago.

Other European countries saw large numbers of online viewers as well. The European Broadcasting Union (EBU) estimates that a total of 18 million viewers tuned into streams from the games, and its member networks served a total of 180 million streams online. The BBC is a member of the EBU, which means that the Brits caused almost a fourth of all of Europe’s Olympic video streams.

China’s state television network CCTV saw even bigger numbers online. The network told the New York Times that more than 100 million people accessed Olympic video streams on its web site.

But CCTV’s site wasn’t the only way to watch the Olympics in China. The network also sub-licensed the online rights to P2P TV platforms like PPLive. The company told us that a total of 5.5 million viewers used its client to watch the opening ceremony, with 1.6 million concurrent users tuning in during the ceremony itself

NBC’s OnLine Stalking Horse – It’s All About Broadcast Not Web – A Diss on Social Media or Wait An Application of Social Media

Update: The NYTimes’ Brian Stelter has a great story on the success of NBC (he asserts the same point that I wrote over the weekend). Brian writes “NBC treated the Olympics like a research laboratory, and it says it is gleaning information about how people preferred to consume content from its combination of television, online and mobile offerings. (Critics charge that because the network did not stream the most popular sporting events live, its findings are skewed.) Regardless, the network is using the Olympics to assert that TV is the preferred medium of consumers, with the vast majority of viewing — 93 percent — done via television.” – It’s basically a great success and shows that the long tail distribution applies to this great example from NBC of converged media- As the saying goes “It’s all good”.

— my orginal post

NBC’s web site strategy for the Olympics was brilliant from a business perspective. Pump the hell out of it via promotion (like a crack dealer handing out samples) then do the “take away”. Everyone was so jacked to get online coverage – sure they did – Live Ping Pong and Fencing. The big show’s was the TV coverage.

What’s so smart about this move? NBC just followed the money. They have “scale” on the broadcast signal and advertising on TV. The Internet at best is just a social media promotional tool. Why ADVERTISING DOESN’T WORK on the Internet. Better said broadcast advertising techniques don’t work on the web. It’s a simple numbers game. NBC just could never scale up the broadcast online to get the kind of return that they can command on the TV side. An example EMarketer calculated its ad-revenue estimates based on the number of video streams that NBC said it generated during the first seven days of the Games. EMarketer estimated that NBC charged on average $50 per thousand ad impressions. This is a joke on return on the video ads.

So I say NBC was smart. On the user side they just didn’t get the coverage that they wanted, but hell NBC paid for the rights. NBC wins and users loose.

The Wall Street Journal article by Emily Steele frames NBC’s online effort as a failure. No way Emily they did fine. There is no there there online for NBC. The end game was the TV broadcast and TV advertising. The web was a promotional and fringe service.

I’m bullish on online video but the market for broadcasting online is in absolute turmoil.

Henry Blogett has a good take on his blog SAI. Of course I’m biased because he agrees with me. In fact I’m hard pressed to find someone to disagree with me on this post (except the web 2.0 echo chamber).