Monday, May 05, 2008

Online video: Attention Deficit Spending

As all breathing humans who care seem to know, the major TV broadcasters are attempting to move their content online in a format hereafter and cleverly referred to as 'Online video'. Great names like Hulu and Joost mask the question these these brave entities undertake: how do you pursue monetization of video content in the land of free?

Well, like many newspapers have found out, it may turn out that they don't...at least not as much as they did when they controlled the means of production, the distribution channel and the supply of attention.

Mark Cuban has a post talking about a' la carte content and its implication on his blog. An interesting excerpt:


On the web, early evidence suggests that consumers will tune out – click away – if they are forced to watch more than 30 seconds or so of advertising up front, and maybe another 90 seconds of advertising over the next thirty minutes. Hulu.com, for example, which has already been lionized by many as the future of TV, serves two minutes of advertising for every 22 minutes of programming(i.e. the programming duration of a typical half hour show from television). Assuming identical CPMs for web video and TV, and after accounting for lost affiliate fees, a 30 minute program on the web with two minutes of advertising yields approximately 1/8th as much revenue per viewer. Are content producers prepared to reduce production costs...by 88%?


They better be. Content is commodity to everyone but the individual who finds it of some value. And in the online world, where an individual's interests can be identified and served individually, the method to monetization of content may be that, in fact, content providers pay consumers for their attention. Say what?

Let's ask a few questions and suggest answers:

Q: If content is available but you don't know about it, does it have value to you?
A: Potentially, but not actually.

Q: If you are aware of content but are unwilling to spend time with it, does it have value to you?
A: No.

Q: If you are aware of content, you are willing to spend time with it, and therefore it has some value to you, what is it worth?
A: What you are willing to spend...in money (pay per view) or attention (willingness to watch adverts).


So, as a content provider online my objectives are simple:

1. Be sure that I make you aware of content you care about.
2. Price my content at a level you are willing to pay (in the form of time-as NCB has done with its hulu.com ad supported content--or money--as NBC has done with it's $1.99 downloads fo commerical free programming for the Zune media player).
3. Match my investment in content to the market for it. (NBC has to sell alot of $1.99 episodes or get alot of advertisers willing to support 30 minutes of programming in exchage for 120 seconds of advertisements)

Simple enough. But how?

If I knew that in detail I'd be somewhere else...but you can reason that it would involve the following:

1. Consumer Search
2. Contextual Advertising
3. Social Networking/Community Content
4. All of the above
5. None of the above

As it stands, mass media franchises seem to be pursuing none of the above quite well...Google, Yahoo, and the other online networks seem already to be integrating All of the above.


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