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Best Practices in Fair Use for Online Video
The Center for Social Media just released a white paper with guidelines for using copyrighted material in online video. Fair use is often misunderstood (and rightly so, it’s a complex law), so I’m pleased to have a set of clear guidelines to point people to.
This is an especially great resource for anyone doing remixes, mashups, or other pop-culture derivatives. I recommend the PDF version, as the formatting makes it much easier to digest.
The Long & Short of YouTube Video
YouTube’s decision to allow long-form videos on its platform got a lot of people talking, including some bloggers claiming that it was a change in their strategy. (In case you want to know what changing strategy is all about, I can recommend reading this excellent article from Harvard Business Review.) What I found funny about this brouhaha over the new strategy is that it’s a really an old strategy that’s been dusted off for legal content.
Many seem to have forgotten that YouTube used to allow long-form videos on its platform. Sure, most of it was not-so-legal, and consisted of the latest television shows and other copyrighted content. In early 2006, I wrote about being able to find everything from cricket matches to television shows on YouTube. They eventually pulled them down, but only to appease the content owners they wanted to sign up for the YouTube platform.
Of course we all know some of the largest content owners decided to back Hulu, hoping to make it the destination site for premium video content. Hulu’s fortunes are getting better, but YouTube has been no shrinking violet. The site has grown to 82 million unique viewers per month and is as dominant as its parent company Google is in the search business. YouTube is so big that it rivals Microsoft in the search business. What that means is that YouTube has a lot of eyeballs but has had a tough time monetizing the content on its constantly growing site. YouTube isn’t the only online video player having a tough time with monetization. Many people in the online video sales business say that even professional video on sites like Microsoft and Yahoo is proving hard to cash in on, with as much as 50 percent of the inventory going a-begging.
YouTube’s problems are more acute because many of the videos it hosts are really short, which makes the content less useful when it comes to embedding advertising into the videos on the site. So it makes perfect sense for the company to encourage long-form videos on its network. Given that none of the big networks are going to give them their content, YouTube is going after produced episodic content. The long-form video opens up more advertising opportunities for YouTube.
They indicated as much at a special event launching the YouTube Screening Room in Los Angeles today. NewTeeVee has a report. NewTeeVee notes that “YouTube’s been hitting the film festival circuit, talking with directors.”
The strategy is rather similar to the one used by Google’s to popularize AdSense. By partnering with smaller content developers, YouTube is betting that it can aggregate enough traffic to sell to Madison Avenue. At the same time, there is a good chance that some of these small players will grow to become large video players and partners of YouTube. They could easily become a hub for indie movies, smaller and niche television content, and even foreign content, making it tough for startups such as Filmaka and Jaman.
Internet’s Least-wanted Gig: Online Video CEO
Three online video startup CEOs stepped down last week. The departures were for different reasons, but when you hear about them in the span of a few hours, as I did on Friday, they glom together. Herb Scannell of Next New Networks said his company would be better served by someone more web-oriented; Mollie Spilman deferred to her co-founder to lead Tidal TV; and Bill Joll of On2 didn’t give a reason, though it’s worth noting that his company recently had to restate earnings due to “falsified” sales accounts (the three are pictured in that order). And they’re not the only ones: Founding CEOs Josh Felser of Sony-owned Grouper (now Crackle) and Tim Tuttle of AOL-owned Truveo are also members of the recently-departed online video start-up CEO club.
Meanwhile, investors are calling for disciplined spending by online video companies (huh? where were you when those checkbooks were opened? VCs spent $461 million on this space in 2007 alone) and video views were down slightly in April (though I don’t doubt that at least that metric will rise overall).
Running a video startup isn’t a cakewalk. Despite its rising impact on the media business in particular and the population in general, the sector has few exit trophies on its shelf (YouTube, Grouper, Maven Networks, thePlatform, Wallstrip, Jumpcut, Truveo, Atom Films…the list isn’t much longer than that). And once a company is bought, the slog for revenue is hardly over.
According to our sources, YouTube will make $70 million to $90 million this year; a friendlier estimate from Forbes is $200 million. And that’s as Google’s Eric Schmidt, CEO of a company that did $16 billion in revenue last year, says making money on YouTube will be “our highest priority this year.” Meanwhile, the few public online video companies are feeling the pressure even more acutely.
And while video portals and video search may no longer be as hyped as they were 18 months ago, the new kids on the block — niche and interactive web programming companies, for instance, like Scannell’s Next New Networks, EQAL, JibJab, and Revision3 (which, full disclosure, produces the GigaOM Show, but has also been on a tear lately, signing web stars Veronica Belmont, Zadi Diaz, and Gary Vaynerchuk) — don’t seem any closer to turning a profit. And creativity and efficiency are hardly best friends. It may well be that this first generation of new media content companies paves the way for the future of entertainment but gets crushed by business realities in the meantime.
Lately, the belief seems to be that the money is in content delivery software and infrastructure — with Brightcove, for instance, revamping to compete with the current darling, Move Networks — but as Om has written many times, the CDN business is not a good one. Living just on top of it may be precarious.
That’s not to say I don’t believe in online video — just that I can see why someone would have trouble holding onto their CEO berth in this space.
Liz Gannes is the editor of our sister blog, NewTeeVee. Follow Liz’s work on NewTeeVee and NewTeeVee Station. Subscriber to NewTeeVee RSS feed by clicking here.
Now Playing On YouTube: Hulu
Updated: We all know there’s no love lost between Hulu, the Hollywood-backed online video service, and Google-owned YouTube. The two companies have taken snipes at each other. For instance, at the NAB trade show, Hulu was trash-talking YouTube. Jason Kilar, the CEO of Hulu, said that you can’t make money by posting unauthorized and copyrighted videos — with a YouTube page behind him.
Hating your rival is part of the game, which is why it’s hard to ignore the irony of a Hulu Channel on YouTube. YES! What you just read is right. The LA Times discovered the channel and posted about it on their blog. Seems a little disingenuous! The reason for the Hulu-on-YouTube channel is pretty basic — YouTube has what Hulu hopes for: traffic and an audience. Hulu has content from its backers. It makes perfect sense for the two of them to start working together. Kilar should remember that you can’t make money by posting to a site that doesn’t have a lot of traffic.
NewTeeVee talked to Hulu and got a confirmation from them that indeed they are the ones who set up the channel for promotional purposes.
YouTube head of premium content partnerships Jordan Hoffner says: “It’s fantastic that Hulu is providing content to our global community and using our platform to grow and drive traffic to their business. Media companies large and small can set up channels or even partner with us to interact with the world’s largest and most active community. “
Former Bolt.com Owner Gets Into Games
Jay Gould, a former owner of pioneering social network and video-sharing site Bolt.com, has launched Gamers Media, an ad network for casual game sites. It is one of several other startups, such as NeoEdge and Mochi Media, which launched last year, seeking to monetize the hugely popular casual games market.
After the bankruptcy of Bolt.com last year, Gould said he was looking for his next opportunity. He’d noted an advertiser rush to gaming sites while at Bolt, and decided that should be his next endeavor. New York-based Gamers Media reaches 20 million uniques and has about 40 properties on which it can place ads, and it has signed a partnership with Adify to build out its publisher network. So far, Gamers Media is profitable, but Gould said he doesn’t disclose revenue.
He did say the CPMs on his site range from $10 to $20 for brand advertising, with tactics such as page takeovers and custom-built “advergames” netting a higher CPM. The site shares an average of 50 percent of its revenue with publishers that range from Big Fish Games to Lycos’ Gamesville property. I love that the company is making money, and is profitable, but the value of Gamers Media is only as good as its publishers. It needs to corner the market fast — or score some exclusive arrangements with big publishers — in order to compete.
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CPM Rates Drop, Will Pay Walls Rise Again?
I recently Googled the term “falling cpm,” and the top link was a story with the headline: “CPM Rates Drop as More Sites Seek Ads.” Expecting that the story had been published in the last few months, I was surprised to see that the publication date was in fact Feb. 7, 2000 — a month and three days before the Nasdaq posted its bubbly, dot-com high.
Now, I’m not going to rehash another rant about a second Internet bubble. But I do think it’s notable that, after eight years, during which time the online ad market has matured substantially (and the technology behind it has advanced dramatically), the underlying dynamics in the market are in broad outlines the same as they were an entire economic cycle ago. Advertisers are pushing more ad dollars online, but the number of sites to house them are growing even faster.
And so there is more and more discussion this month that CPM rates are falling. (There remain optimistic exceptions, however.) The relatively balmy climate of Web 2.0 means more sites are looking for ad revenue just as mainstream advertisers are contemplating cuts in their ad budgets. Michael Learmoth at Silicon Alley Insider recently interviewed Digitas exec Carl Fremont, who spelled it out:
“What is happening is there is a glut of impressions on the market. I believe what’s going to happen is there will be more inventory flooding the market as a growing number of publishers move away from the the subscriber model to an ad-supported model. You are going to see much more inventory on the market.”
This would be especially bad news for newspapers hoping to find more ad revenue by migrating from print to the Internet. In fact, considering we’re heading for rocky economic waters, it’s just not very good news in the near term for anyone hoping to make a profit by publishing content online.
Back in the early part of this decade, some of the more successful news and content sites charged readers for subscriptions. But most of them have since torn down their walls. The last holdouts to move to a free model — the Economist and the New York Times premium columns — did so just as ad rates overall were about to fall. In fact, that very migration to free has added to the glut now threatening publishers.
Which leads me to wonder whether we’re going to start to see online publishers try to erect some of those old walls again. Rupert Murdoch was expected to tear down the subscription wall at the Wall Street Journal, but he revealed something quite different at Davos today.
“We are going to greatly expand and improve the free part of the Wall Street Journal online, but there will still be a strong offering…The really special things will still be a subscription service, and, sorry to tell you, probably more expensive.”
Others will be tempted to follow Murdoch’s lead here. I’m not saying it’s a good thing — I doubt very much it will work as more than a stopgap fix. But the worse the overall economy gets, the more executives of companies making a buck from online ads will be pressured to do something — anything — to revive revenues.
That means a) cutting costs that are often already near the bone, b) getting very creative about finding new revenue streams or c) putting up pay walls. For some, paid subscriptions may be the easiest lever to pull.
The Problem with Podcasting Isn't Downloads
FOSS Codecs For Online Video: Usability Uptake and Development 1.2 - Transmission
The GigaOM Show #18: Putting The Cash in Casual Games
In this week’s episode of The GigaOM Show, we chat with Jim Greer, CEO and co-founder of Kongregate and Jameson Hsu, co-founder and CEO of Mochi Media about monetizing casual games. We discuss a wide range of topics, including the upcoming launch of Google’s game-related AdSense network. According to some estimates, casual gaming is the fast-growing segment that accounts for about 10% of the $30 billion global video game industry.
Download the show in quicktime, windows media or Xvid formats. There is an HD download available as well.
Related posts:
- Casual games worth $2.25 billion. But where are they going?
- How Casual Games can become money machines.
- Inside the YouTube of Games, Kongregate
