Revenue & Advertisement Models in Online Video - Marketplace Survey

The state of ads in online video is still in its infancy. The following forms are in use today:

1. Traditional banner ads. E.g. YouTube, Yahoo! video, Yahoo! music, etc.
   
2. Pre-roll, post-roll, and mid-roll ads: ads that are played before, after, and during the playback of online video. This is by far the most common use of ads in online video.
   
• There are different version of these "roll" ads ranging from the tradiational pre-roll (as in Yahoo! News, MSN Video) wherein the user cannot fast forward the ad prior to watching her video.
  
• The advertiser inserting post roll ads based on the video context. E.g. Revver - insert Verizon ad after Prince music video featuring Verizon phones.
  
3. Revenue sharing. Sites such as VuMe allow the user (i.e person who uploads the video) to share a percentage of revenue based on video's popularity. VuMe inserts ads in the video.
   
4. Sponsorship and made for web content. These are made for web channels, i.e. Webisodes. E.g. Somagirls.tv (gossip channel) which runs on GoFish and other sites, Kohl's has sponsored Somagirls channel as it targets the 18-25 W demo. Yahoo! video channels such as "Sundance" channel is sponsored by Lexus.
   
   
5. Contextual ads: Companies such as Scanscout and Adap.tv use technology to recognize words spoken in the audio tracks of clips. It then lets advertisers choose to have their ads appear at the moment in the videos when specific words are spoken. Another example is YuMe networks: similar to Scanscout, except the tagging of frames is done in India. These ads can appear during playback of the video.
   

We need to differentiate between UGC and non-UGC content. The former is more amenable to advertisement such as contextual ad, pre/post roll. Ads for UGC is best served by banner ads.

What's all the hype about?

So, I decided to give a swirl at the latest video offerings from Veoh, Joost, and Babelgum.

Veoh sources videos from both syndicated sources and other web sites (e.g. YouTube, Yahoo! video, etc). Joost and Babelgum carry syndicated content only . Here are my initial comments:

• It's still beta software! I'd a ton of trouble getting any content successfully from Joost. Babelgum doesn't work in Vista.
• Voeh is by far the best in terms of streaming video. Also, Veoh has built in some good social networking features.
  
• Joost seems to be bringing TV to the PC. Well, is that what we are looking for? Getting the same ol' TV channels on our PC. I'm all for UGC content and social networking features.

Joost
















Veoh

Internet Video - a survey

One area of great interest to me is internet video and various avenues to monetize it. I researched a couple of sites to get some very interesting data points on usage of internet video, here goes:

Internet video playback fall into three key categories - progressive download, streaming video, and P2P. Most of the video playback is in the first category - progressive download. Streaming video is used mainly to display live events. P2P is relatively new and is being pushed by companies such as Joost, Babelgum, Microsoft LiveStation.

Statistics on internet video usage
(from ComScore Data Jan 2007 & Accustream reports)

• Total online video streams - 7.2 Billion streams / month. This includes user generated content (UGC) and entertainment & media sites.
• Non-UGC content streaming was 24.92 billion streams in 2006. This constitutes around 1/3 of total streamed in a year. That is a 39% growth over the previous year.
  
• Music video constitute around 35% of all entertainment & media streaming (non-UGC streams) in 2006.
  
• News video constitute around 23% of all streams in 2006
  
• Total audience size - 122 Million (70% of US internet households)
• Average stream time - 2.6 minutes
• Average viewing - 2 videos / day
• Monthly viewing - 151 min / month
• Daypart viewing schedule - highest from 5pm - 8pm on weekdays - 60% relatively higher than other day parts; 7pm - 11 pm on weekends - 30% relatively higher
  
• YouTube - 65% market share. Yahoo! Video - 5%