Essay: Ad Startups Turn Away from User-Generated Video
We keep on writing about startup after startup getting into the online video space, but we’ve noticed a somewhat disturbing trend: they all say they’re looking to monetize professional content.
Professionally made video has a lot of things going for it — assurance of copyright ownership, good indexing and metadata, and, of course, advertiser and usually viewer interest. But what about the loads of sites paying to host their users’ uploads and looking for a way to earn a dime? Surely there’s a market opportunity there.
Kiptronic, an ad insertion startup that announced Tuesday it was extending its audio platform to video, is rolling out with CondéNet as its marquee customer. Why not the bevy of small-time podcasters the company originally set out to serve? “The problems of monetization on the long tail, it’s difficult for us to convince brand advertisers,” Kiptronic CEO Jonathan Cobb told us earlier this week. “The best short-term solution for us is to bundle that content with higher-end stuff.”
Companies that serve both brand and performance advertising, like BrightRoll, tell us all the action is on the brand side, where advertisers seek placement on top-tier websites rather than matching against relevant user-generated content. (Disclosure: BrightRoll is funded by True Ventures, as is GigaOmniMedia.)
When we interviewed Digitalsmiths, one of many companies trying to peek inside videos to match them to relevant advertising, for an article about its $6 million funding round this week, we asked CEO Ben Weinberger the same question. “User-generated content is what a lot of people are viewing as the holy grail of video search,” he said. “Our focus is not there right now.” This with his two venture capitalists on the conference call. Again, Weinberger cited the “sensitivity of advertisers” as a limiting factor.
Clearly Google is getting into this market, what with the need to pay back its multi-billion-dollar YouTube investment. But I’m surprised players like Adap.tv (which in trials in gimme verticals like travel) YuMe Networks (which has also told us it is focusing on professional content) and Broadband Enterprises (which is even producing its own video shows to sell ads against) aren’t being more aggressive. The only company in the space I can recall not dissing the opportunity to monetize user-generated content is ScanScout.
C’mon, people, where’s the ambition?
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Interesting. Mainstream (i.e. “professional” content) is bleeding viewers, at least in terms of ratings and thatpeople are moving online to watch video. Are they moving online to watch the same shows they used to watch on TV? I’d like to see some statistics (neutral stats, not something funded by MSM) on if that is the case, or are they switching over to watch more UGC? I would guess it is a mix.
In the end, advertisers will go where the viewers go.
Australian video search engine and socialisation tool Vquence will allow monetising of all content, user generated or professional. The public beta with authoring tool should launch in a couple of days…
Maybe it’s time to start defining terms?
“Professional” means you are looking to earn a buck.
So, “User Gens” looking to earn money from ad revenue are folks looking to turn “professional,” right? “User Gens” who just do this for fun and games are by definition “amateurs,” not interested in earning money from their hobby…
Advertisers like “professional” (maybe not mainstream, but, high production value and RELIABLE DELIVERY) because they base their media buys around Campaigns and need to know that their ad will have something to be glued onto; so, “amateur content,” that may be uploaded, or may not, depending on whether someone shoots, edits and uploads, or, instead, decides to hang at Starbucks and pick up Baristas is not a comfortable place for Advertisers to work.
Why not let User Gen/amateur content just be ad-free? Advertisers will never be able to coordinate media buys with popular User Gen content, so why build the infrastructure?
But, how about if someone builds an ad-driven (which may NOT mean Pre Rolls alone) network that can achieve what “old networks” achieved — the mechanisms to fund content production? That would be the tipping point for internet TV…
I also think it goes back to advertising against copyrighted material. UGC is still a huge sinkhole for unlicensed content.
Also, Vlogs / Internet TV are starting to get some traction in terms of advertising – like Ask A Ninja! :) – because there is a regular show with a regular audience (i.e. predictability).
We’ve actually been defining three categories:
1) Viral/One-offs – this is the typical user uploading their home video (UGC).
2) Vlogs – otherwise known as “Internet TV” where the video is episodic in nature (this area still requires a lot of definition, as there are many different types of vlogs).
3) TV on the Web
“Mainstream” has been dipping their toes into Vlogs lately with “minisodes” and “webisodes”, which are really just vlogs with a different name. The convergence of vlogs and TV on the Web is happening, much like the convergence of mainstream news and blogs has happened over the past few years.
I agree with you guys about the more granular distinctions between what consitutes professional or non-professional content. However, we are talking about a world where advertising deals are generally transacted with hosting sites, and little-to-no indie video producers host their own video. What I am hearing from the ad startups, on the other hand, is that they want to provide their services to sites like NBC.com — where the binary distinction between pro and UGC is clearly ingrained.
@marc: I agree totally. But defining the terms is difficult as self-publishing collapses clear boundaries. I’ve been leaning towards ‘prosumer’ since first reading the term linked to video cameras years ago.
There is certainly a large group of people in the world who dabble in video productions professionally, and are tempted by the idea of making money, yet have their feet firmly planted in the consumer market.
And then there are Vlogs and ‘Internet TV’ — not just the talking head, cult-of-personality kind of vlogs, but purposeful, well produced, smartly edited media. By amateurs. Or, prosumers. Or professionals. Which is it?
Take this seriously: Blip’d knows the formula to monetize user video. Investors?
Big ad dollars will go to big sites which are easy for media planners to place their buys on. Or the ad networks. But advertisers are experimenting with branded content that doesn’t run as pre-roll or on TV. Just as user generated content on video share sites. Think Never Hide Films for Ray-Ban and their success with “Guy catches with glasses with face.”
This is because most user-generated content has the reputation of being low quality in both production and content value.
However, as more “prosumers” begin creating content that is as good as anything you see on TV in terms of production quality, the pendulum will swing back and the line between “professional” content and that created by independent folks will blur to the point of being unrecognizable.
Tim Bourquin, Founder
Podcast and New Media Expo
http://www.NewMediaExpo.com