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A few takeaways from an Ars Technica story on NPD report that claims that peer-to-peer (P2P) video downloads are out pacing purchases from legitimate video download services by a rate of five to one.
- 8 percent of Internet-using households downloaded video content from P2P services, whereas 2 percent paid to download video content from legitimate providers.
- The study also indicates that nearly 60 percent of video files downloaded from P2P sites were adult-film content, while 20 percent was TV show content and 5 percent was mainstream movie content.
Some of the highlights from the solid analysis by Ars Technica:
- The big one has to be the ease of using a P2P network. Download a video from a P2P network, play it on your computer or burn a DVD. Simple. Why? No DRM on P2P networks.
- It’s hard to compete with free. Why would you pay for a DRM laden video with poor bit quality for $11.99 from an online service when you can get an HD quality, DRM free video from a P2P network?
- Selection is the pits with online video stores. But go to the P2P services and you can get pretty much anything you want. And, once again, it’s free.
- Set top box to the rescue? Video downloads may get their light of day in the mainstream when “on demand” goes to the next level. From Ars Technica:
Right now, the current leader in the video download market is Apple, which boasts nine out of every ten digital movies sold in the NPD study. I’m inclined to believe that the market for commercial video downloads will be pushed into the mainstream by set-top devices that provide integrated downloading services that go beyond current “on demand” services by carrying more selection and offering “download-to-own” videos. Such products insulate users from some of the frustrations of DRM while solving the problem of getting the content to a television screen. Apple’s upcoming iTV product is a good example of set-top box (STB) hardware with an integrated video download service. Microsoft’s increasingly popular Xbox Live Video service is also a great example. I’d like to see NPD perform a similar study in a year or two comparing adoption of set-top-based video downloads with computer-based video downloads so we can see how products like the Xbox 360 and the iTV impact the market.
From Digg to Technorati to StumbleUpon, social discovery sites around the web are seeking a way to suss out the hottest videos on the web at any given moment. Today two memetrackers, TailRank and Megite, added video to their offerings. Both sites track what the hottest videos online are, as measured by the number of bloggers who are linking to those videos.
Neither of these companies are SplashCast competitors, in fact I really want them to function better so I can use them in my work here at SplashCast.
Both sites do a good job of tracking text based memes in the blogosphere, but both exhibit some early shortcomings in their entry into video. I’ll be making a longer post comparing the features and capabilities of a long list of video aggregation sites, both human and automated, when we switch over to our new SplashCast blog this week. For now though, these two sites are in the news and deserve some commentary in and of themselves.
As Liz Gannes at NewTeeVee wrote this morning, online video discovery can be a challenge. There may be no shortage of videos available but the dominant methods of discovery today are probably the most watched and discussed pages on YouTube and the various sites’ featured videos. Those hardly seem sufficient; sheer numbers for example are easily gamed. SplashCast is working on a network of topic editors who will highlight the best media (video, photos, audio and text) in their areas of expertise. Even people in that kind of position, though, could be well served by some automated aggregation of hot videos.
In the spirit of cheering for everyone working to bring a solid offering to market that will fill these needs, here are my top concerns about the products launched today by TailRank and Megite.
Top 8 Problems So Far
No categorization. Both services currently offer only the top videos in bulk, not split up by category at all. That’s a challenge in and of itself, but would be a great differentiator. StumbleUpon probably does the best job of this so far, though it’s largely a black box for end users. There are enough videos coming online already that I want to be able to view only the most popular ones about certain topics. In the near term future there will be enough video online that general “most popular” will be irrelevant to many people. In fact, that’s probably the case right now.
The RSS feeds are non-functional. The TailRank RSS feed so far says it’s for the video page but delivers the front page of TailRank proper. The Megite Video RSS feed delivers nothing but headline links, no metadata or screen cap – much less a playable version of the popular videos. These sorts of sites are likely to prove most useful in syndication for many users, not as a destination site. People in viral video related industries, for example, would be best served by a high functioning RSS feed from video memetracking services.
Only some sites are being tracked. YouTube may be the logical dominant source of video, but many video bloggers in particular host their videos elsewhere. Irina Slutsky’s scandalous SNL send-up “Boobs in a Box” for example, has more links today (including from BoingBoing), than many of the videos in the video meme trackers. It’s hosted by Blip.tv.
Linking to videos, as opposed to embedding them, ought to be counted as well. That may be why Slutsky’s video isn’t included in the charts.
The number of indexed blogs are still low in both TailRank and Megite. If you look at Technorati videos or ViralVideoCharts, you’ll see that some of the same videos appear there but with far more links included in the results. This calls into question these new video aggregators’ connection to the parts of the blogosphere where videos are most discussed. That’s a whole new challenge they’ll need to take on.
Presentation will be a real challenge for single file players. Obvious intersection of interests in this comment, as SplashCast will be a solution for this problem when we launch our multi-file player next month – but it is a very real issue. TailRank does a nice job of resizing the players for each video so you can scan more information on a single page but Megite puts full sized players in its aggregation pages. I believe both solutions are awkward, though I like what TailRank is doing about it.
Errors are present in both sites at launch. Neither is a deal breaker, but here’s two technical problems I found right away. Megite finds that The Original iPod Ad is a hot video today but titles it “Mariah Carey: Hungry Hungry Hippo.” TailRank has the same video, with the same URL even, appear twice in its list of hot videos. I’m sure these are the sorts of things that both sites are working to prevent in the future.
Finally, what does it mean that many of the automated memetrackers, these two included, have very little overlap in their hot lists? TechCrunch reports that Megite places different weight on different blogs and TailRank may be as well. That algorithm could use some transparency so I can decide which I prefer. I’m also not sure that the major players in video selection are at all clear yet. Even in the text blogosphere, meme trackers that give more weight to some blogs than to others have come under heavy criticism for reinforcing existing power dynamics and being less than supportive of new voices. A good memetracker will account for this, but I can’t help but wonder how it’s being done in the video space.
All in all, these are two new services worth watching. Both are designed by committed developers well practiced in tracking memes. I hope that they will improve dramatically. I’d love to have some solid, categorized options for video meme tracking available by RSS.
Changes afoot at video company Revver; AdAge (via PaidContent) reports that co-founders Ian Clarke and Oliver Luckett are departing from the company. Remaining co-founder and CEO Steven Starr will be joined by executives Kevin Wells, David Armitage and Angela Gyetvan are joining the company.
Some observers believe it’s a VC initiated changing of the guard. The company issued a statement saying that the changes were “intended to advance the company’s infrastructure and bolster its marketing and advertising efforts in 2007.”
Revver sells its own still frame post roll ads. Selling video ads at all is difficult, making a company profitable with still frame post rolls seems like a strategy unlikely to prove sustainable. I think we can expect to see major changes not just to the roster of Revver advertisers over the next year, but probably to the fundamental revenue model as well.
Though the company has landed some high profile talent, including Ze Frank, Lonelygirl15, EepyBird and AskANinja – a number of other talented content producers have questioned the prospects for anyone but the biggest stars to be well compensated through the current system. I like the Revver vision and click on ads every time I get to the end of a Revver video, but I will be interested to see what the Revver experience is like 3 or 6 months from now.
Rumors are going around, starting at music industry blog HypeBot and discussed at SeekingAlpha today, that Amazon is working on a music store with DRM free MP3 tracks and variable pricing. This is a big story. On both levels such a move by a major player in the industry could put pressure on Apple to change the way it sells music in iTunes.
Consensus appears to be that if such an Amazon store does open, it will likely be filled mostly with music from independent labels and less-than-new releases from major labels. Yahoo! though has been experimenting in recent months with selling singles from relatively high profile artists without DRM.
My off-the-cuff thought is that iTunes would be more likely to include variable pricing per song than they would be to get rid of DRM. Lower priced music would be more competitive with free pirated content (still iTunes’ biggest competition as far as I can tell) but the company’s dominance in the MP3 player market makes their DRM remain highly viable.
One way or the other, it looks like Amazon may be making one of the boldest moves we’ve seen in some time. Many people have also asked what this would mean for eMusic, a service that sells MP3s without DRM for as little as 25 cents.
Broadcasting and Cable is reporting that Viacom has pulled out of the widely discussed talks between a number of major media companies to create what’s being called a would-be YouTube killer. Viacom had been working with NBC Universal, News Corp. and CBS on creating one giant online video site, the future of which now falls into question.
Many people have contended that large mainstream media companies could never create the kind of vibrant community that grew up around YouTube in its early days. It’s hard to imagine what a site run jointly by all of those media companies would look like. Several of their many properties are in direct competition, for example. Collaboration on such a scale, interfacing with user generated content, sounds like an unbelievably complicated task – even if it were judged legally acceptable. It reminds me of the music world’s hydra in gestation, MusicForAmerica, a contest site run by Epic Records, Universal Music Group, EMI and ClearChannel.
Everyone wants a piece of the user generated action. It’s incredible what a force YouTube grew to be so quickly. The potential it and related services hold for the future is clearly an even bigger threat to old style media.
ExpoTV is all about consumer recorded video product reviews. The company says that more than 20,000 reviews have been uploaded to date. Those reviews are then syndicated out to sites including AOL, Yahoo, Google, YouTube and in the best integration, Buy.com (example). The company also delivers those reviews, along with expert opinions and video advertisements through video on demand partnerships with cable providers around the country.
Last month the company began paying video uploaders one penny for each time their reviews are viewed. When that announcement was made the company said it had more than 12,000 product reviews – so it looks like the site nearly doubled in one month by rewarding users financially.
Upon hearing the news, I immediately thought of ShopWiki, a company that pays users to submit video reviews of products listed in it’s wiki style shopping guide. ShopWiki is also well backed. I can’t help but wonder whether building a catalog of video reviews to send elsewhere is a better plan than building that catalog only as added value to your existing site.
One way or the other, it’s an obvious niche in the consumer generated video market. Like UnBoxing videos, consumer reviews (the positive ones at least) provide the kind of marketing fodder that companies have sought desperately to outsource to authentic consumers for some time.
David Beisel of Masthead General Partners posted this afternoon about the investment, saying he sees ExpoTV as a uniquely powerful example of social commerce.
It’s been a week since LeWeb. Here’s my take on what the past several days have been like:
I have to give Loic LeMeur some credit. He took some chances. Yes, he sure pissed off a lot of people. But taking risks is inherently controversial. But it is never boring.
What were the upsides and downsides of Loic taking the risks that he did? Here are a few.
Risk upside: Having politicians talk to the attendees. Some bloggers complained that they felt used. Come on. How often do you get the chance to hear Shimon Peres talk about how bloggers represent the new intelligentsia? Was he pandering? Perhaps. But more so, his presence at LeWeb3 shows how far we have come as bloggers. He was there because bloggers are an important part of the public discourse. Seems more like reason to celebrate. Very cool.
Risk downside: Fitting in the politicians meant less time to hear from people I really wanted to see spend more time presenting. For instance, people like Hugh Macleod and Anina, who presented about love and fashion 2.0. They had a great sense of humor while providing all kinds of insights into the fashion world and how in the end, it all comes down to love. A love for what you do. That may sound a bit corny but Hugh sums it up well on his blog:
<blockquote>6. The best blogging campaigns are acts of love.
You cannot impose your own selfish values upon the blogosphere and still expect results.
What you can do, however, is give a damn. It’s a surprisingly effective strategy.
7. I will leave you with a thought from Six Apart’s Anil Dash, talking about the speech the Father of The Bride made at his wedding:
“What he told us is that, in the end, only love matters. Success and fame and wealth and even health all fade in time, and in the end all you have is love. And love is what matters. I hope everyone in the world gets the chance to discover that in the way that I have. I love you, Alaina.”
This market and communication transition we’re going through is not about technology, and it sure as hell isn’t about marketing. It’s about Love. Love enabled. Love re-asserting itself in the business between people.</blockquote>
Risk Upside: Organizing a start-up room in the final weeks before the conference. More than 50 companies presented. Many of the entrepreneurs presenting were from Europe, giving a glimpse of the innovation from a side of the world that we do not often see here in the US.
I have more to say about the start ups. But for now, I just want to congratulate Loic for coming through with a conference that had lots of risks and with it excitement for us all.
An interesting new survey of web users by Burst Media this month found that most people do not like advertisements placed in online video, few people pay particularly close attention to them and a significant portion of viewers leave a site all together when they see ads placed in videos. These aren’t surprising conclusions to come to. (via)
From the write up of the survey:
Among respondents, one out of two (52.7%) say they typically continue watching video content once they encounter an advertising unit; 40.4% say they typically stop watching.
Interestingly, one-quarter (27.9%) of respondents who stop watching video content once they encounter an advertisement also say they immediately leave the website…three quarters (77.5%) of respondents say advertisements in online video are intrusive..
What does this mean for video sharing companies and video content creators? It’s something that needs to be discussed widely.
It’s hard to say whether there will be an ongoing consumer backlash, almost all new media face struggles to become economically viable while early consumers yearn for content free of advertising. I don’t particularly like pre-roll ads myself, though I try to click on all the post-roll ads I see in videos I like just to support all the people involved.
Google AdSense is far and away the most profitable form of online advertising that’s emerged of late but that’s in large part because many people don’t recognize the text link ads as ads at all! Other media have found that the initial backlash fades when consumers begin to empathize with content creators and delivery services. At least that’s been the case where advertising has been kept low-key.
For now at least, advertisers are willing to pay far more for ads that run before videos than for those running after. If the practice of leaving a site all together upon seeing a video ad becomes common, though, pre-roll ads may not be the most valuable in the long term.
Post-roll ads are of questionable impact, though. Just yesterday, for example, Jay Dedman and Ryanne Hodson of FreeVlog and RyanIsHungry cited the unproved viability for all but the biggest stars of Revver’s post-roll ads with revenue sharing when they explained their decision to work with Podtech.
As we move towards launch here at SplashCast, we’re feeling a real need to explore revenue streams other than pre or post-roll video ads. Other than white-labeling software (a great approach), there are not a lot of alternatives that have been brought to market yet. We’ve got some interesting ideas we’re working on.
I think the questions brought up by this Burst Media survey are of general interest to anyone who uses the web. If pre-roll ads drive away viewers and post-roll ads are not worth very much – what models are likely to emerge with strength in the coming months?
From infrastructure providers to content creators, people need and deserve to be able to afford the time and energy it takes to make the thriving ecosystem of online media continue growing.