No, not Ben and I. The bigger “us.” The collective “us.” The ecosystem “us.” The online video landscape, from the creators to the technologists to the advertisers and everywhere in between, is as fragmented as the audiences we are after. And this is not a good thing. In fact, to steal from a children’s book, it is a Terrible, Horrible, No Good, Very Bad thing.
I had the pleasure of moderating a panel on choosing the right platform for content syndication at yesterday’s DigiDay Video Upfront (in LA tomorrow!). As Scot McLernon of video ad network YuMe, said, “Weâ€™re creating the storm before the calm.” He continued, “Thereâ€™s too many partners involved in a simple process. We need to simplify distribution.” Scot is an online advertising veteran, and knows what it takes to build an ad supported business. In talking with a number of other video insiders, it is painfully clear that anyone not “down in the weeds,” can easily be overwhelmed by the chaos that is the online video landscape.
But lets not stop there. I kicked off the panel by asking the room of 557 (Thanks, Digiday) online video executives, “How many of you watched the Streamy Awards last night?” Although the lights on the stage were blinding me, I was able to manage to count the number of hands that went up. ZERO. Say what you will about the Streamy Awards (and I will shortly), but could you imagine a room full of advertising execs not watching the Emmy Awards? The Streamy Awards are hardly on the same level, but my point is the same nonetheless. For a ballroom full of people who claim to be experts in whatever aspect of online video they work in, it is an outright embarrassment that nobody even checked out the event. If just one person had watched, that would have been .18% of the audience, or roughly the equivalent of the average click-through rate that we see for display advertising. And we do a lot of bitching about how bad that number is, do we not?
Slightly more hands – about a dozen or so – were raised when I asked about Boxee. Again, in a room full of online video executives, how are only a dozen people familiar with one of the most hyped companies in online video? Is everyone so busy making apps for the iPad that they aren’t interested in building an app for Boxee?
I took umbrage with one thing that Yume’s McLernon added. “We need to focus on increasing the reach of TV with an interactive component.” For a room full of people trying to explain why online video is different – or better – than TV, McLernon’s point needs to be taken in the advertiser focused context in which it was said. However, extending the reach of television content online for the benefit of advertisers shouldn’t – and can’t – be the main focus of our medium if we want to see webisodic content that isn’t branded entertainment survive. Or should it?
The problem only compounds when you explore the pricing and revenue models. We compare the CPMs of online video advertising to that of television, despite the fact that the experience isn’t the same (Full 42″ screen, lean back, long form Hulu vs ‘TV’ is for another day). And no matter if an advertiser chooses a Cost-Per-Click, Cost-Per-Engagement, Cost-Per-Completion, everything still backs into the CPM model. Is $7 a good price for a complete video view to an advertiser? Is $.40 the right value of an engagement? The people who are buying this inventory can barely make heads or tails of it. At another industry event last month, a digital strategist asked me about GRPs for in-banner advertising. Wow, have we lost sight of the big picture.
Fortunately for all of those in the room who didn’t watch the Streamy Awards, they were spared what seems to be an unmitigated disaster. I’ll spare you my own recap of the gory details, and instead point you to Ben’s review below, NewTeeVee‘s review as well as Web Series Today‘s. Tried as I might, I couldn’t take the pain after about 45 minutes. Suffice it to say, the organizers – who I have the utmost respect for – essentially issued a public apology for missing the mark.
A more interesting Streamy Awards observation came from the live commenting / tweeting during the event. Technical issues, streakers, and incessant stream of dick jokes aside, the chat room was screaming for “YouTubers.” Why anyone would tune into an awards show waiting to see a one-hit viral wonder is beyond me, but the non-stop clamour for YouTubers and consistency of the “I don’t know who the F*7ck these people are,” only points to even more fragmentation within the non-TV-based fragment of web video. Diane deCordova of NextNewNetworks understands this perfectly, as she explained during our lengthy conversation about defining the segments of the online video industry during the Digiday cocktail reception. (Very nice to have met you, Diane!)
And lastly, for this post at least, how will these content creators get paid? Where can a pure (read: not branded entertainment) content producer create and develop compelling programming without selling it first? Just look at some basic math when we compare to TV programming. The Bannen Way, which won four Streamy Awards last night, including Best Drama, has a self-reported 13 million views. At a hypothetical $10 CPM, which would be a pretty good rate for unproven webisodic content, the show would have generated a total of $130,000 in ad revenue, give or take. How could that possibly cover production expenses or paying talent that included Mark Gantt (“Ocean’s Eleven”); Vanessa Marcil (“Lipstick Jungle,” “Las Vegas”); Gabriel Tigerman (“Supernatural”); Michael Ironside (“Terminator Salvation,” “Total Recall,” “Smallville”); Academy-Award(R) nominee Robert Forster (“Jackie Brown,” “Heroes”); and special guest star, Academy-Award(R) nominee Michael Lerner (“Entourage,” “Elf,” “Barton Fink”).
Fortunately, Sony’s Crackle foot the bill, and gave it a pretty significant production budget (under $1mil), putting it into a league well above the majority of web content producers.
According to Mashable:
In the meantime, The Bannen Way has already been made into a full feature. Sony is working on selling a 93-minute version in foreign markets, while an 84-minute rendition is already set to air on TV.
Does that make the Web ‘just’ a place to develop TV programming? Where does that leave a medium that doesn’t want to be a AAA farm team? Certainly there are a lot of benefits to seeing what works online before committing millions of dollars for a TV pilot, but there must be more potential for the medium than pet projects and “labors of love.”
Despite my idealized version of the future of web video, maybe McLernon is right. Maybe web video’s success – at least monetarily – will come from being a digital extension of television with an interactive component.