Sunday, January 27, 2008

NewTeeVee Live: Reinventing Television

On Wednesday, November 14, everyone who's anyone in the new-media world gathered at the Mission Bay Conference Center to talk about the future of online video. What will be the relationship between TV and online entertainment? What will the new business models look like, and where will the revenue come from? Will IPTV or broadband win? The coffee was strong, and so were the opinions (the venture capitalists were particularly snarky, go figure) — but there was one thing everyone could agree on:

No one really knows how it's all going to work.

And no one minded saying so. Mika Salmi, president of global digital media for MTV Networks, kicked things off by revealing that he was invited to speak about "the next big thing in new media," to which his answer was:

"I'm trying to figure it out."

He posited that there is no "next big thing," but rather "lots of little things" that evolve and converge — which nicely sums up the main problem on everyone's mind: advertisers don't believe those little things (and the fragmented audiences they attract) add up. They like having 11 million TV viewers sitting down to watch, all at the same time, all looking at one screen that doesn't also have e-mail and MySpace and competing for attention. They're not going to redirect their budgets to online media until someone can guarantee them comparable access to viewers. This is why there's no profit yet in online video; even YouTube is losing money. The big-brand advertisers won't bite.

"They just don't get it."

That was the second thing everyone agreed on, including those grouchy VCs: advertisers tend to think of new media as simply "TV on the internet." They try to repurpose their broad-appeal, 30-second TV ads and tack them on to 2-minute online videos — and then wonder why that nasty parody trashing their brand has got a million views, and suddenly no teenager alive will drink their soda.

What they don't understand is that new media isn't just TV on the internet; it's the entire ecosystem of discussion, sharing and participation that evolves around the original content. It's the same clip existing in one community as "World Cup Final Game" and in another as "Awesome Head-Butt" and in another as "Why the French Should Not Exist." It's being able to watch that video wherever I want to watch it — YouTube, my friend's blog, — and downloading it and mashing it up into a music video so the world can enjoy seeing Zinedine Zidane pop Celine Dion in the sternum. Oh yes, and doing all of this for free.

OK, so maybe the advertisers are right to doubt that anyone can effectively find and reach such fragmented (and apparently very spoiled) niche audiences. No one at the conference claimed to have that figured out, but everyone seemed to agree on a few basic realities that will shape the new models:

1. Superdistribution (or supersyndication). Also known as the "go where the eyeballs are" rule: spread your content as widely as you can, to reach as many people as possible. Make it easy for people to download and share it. Mika Salmi estimated that only half of online video consumption originates with search; the rest is discovery — people finding your video via their friends' recommendations and shared playlists on social networking sites. This means you lose half your potential audience if you only serve those who come to your home site. Let the viewers find and share your content the way they want to, because this creates. . .

2. Community. Dozens, hundreds, thousands of websites propagating your content, fostering discussion of your content, spreading buzz about your content. You began by spray-firing the internet with your video; word spread, and now that fragmented audience has something discrete to coalesce around. In the panel titled Is There Money in Long-Tail Video?, tech-geeks and VCs agreed that while measurement is still difficult, it is possible to use "content as a proxy for demographic" in order to "sell audience sensibility." But that approach demands that you understand and respect. . .

3. Experience. Users desire and expect a particular overall experience, and choose their venues accordingly. Viewer A wants her Daily Show clips on a humor site with lots of other funny stuff flashing prettily, tempting her with so many delights that she hardly knows what to click next! Viewer B wants the same content in the safe haven of a sober political blog with carefully vetted links and accessible but unobtrusive archives. Surveys have consistently shown that viewers are willing to accept ad content that doesn't disrupt their overall experience — so Viewer A and Viewer B need different ads delivered to them. And they need different ones depending on whether they're viewing the content at work or at home, when they're hungry or when they're sleepy. And what if Viewer A lets hubby log on for a while? He's watching the same content on the same site, but the ads won't mean anything to him. Worse, they all need new ads every time they use content.

Whatever is a humble advertiser to do?

The word at the conference was: Work with a "third-party" advertising company, like VideoEgg or Federated Media — two of many that are starting up, making it their job to locate that fragmented audience, track and facilitate its development into a community, and deliver innovative ad content that flows seamlessly with content and complements the overall user experience.

This, clearly, will require a great deal of investment and innovation at every level: technology, business models and management, content development. Especially content development. Already, popular producers on MySpace and YouTube are being scouted and commissioned (yes, paid!) to create content that can also function as advertising. Product integration is, thus far, the predominant form, but everyone is looking for new approaches to try. New counts for a lot right now — which is why BECA students ought to be making stuff as fast as they can and distributing it as widely as they can, developing their style, building an audience. The money is out there, wanting a good reason to attach itself to online video. The upshot of the Cash for Content? panel was this: invest in content creators not to make money off of the content itself, but because good content adds value to the ecosystem, which keeps community growing (and presumably, eventually becoming profitable).

BTW, all of this talk about profit and "added value" and "content as proxy for demographic" did gross me out a bit. What about good content (good writing) for its own sake? Isn't that the point of taking back our mass media from the creativity-squelching corporate conglomerates?

I got to talk with several online-show creators and writers, and they all said that while there is some danger of new media collapsing, as TV has, under profit-pressure into bland uniformity, right now uniqueness is the highest value. In their opinion, creators have never had so much value or power, or so much potential to keep those and still get paid. It won't be true forever; it might not even be true for very long — but for now, the chaos is on our side.

All of the panel discussions were vlogged and are available at NewTeeVee. Here's a brief recap of each one, and a link to the video:

Mika Salmi (MTV Networks) thinks that online video drives, rather than "cannibalizes", TV viewing, and that "two-screen experiences" and virtual worlds (MTV Networks has 10 already, including Nicktropolis — go get yourself a Nickself!) will dominate media consumption.

Ralph de la Vega (AT&T Mobility) noted that iPhone users report viewing twice as much online video as they did pre-purchase. He sees this as a time of great creative freedom for artists, but also a time when it is even harder to get noticed. He also strongly encouraged flexible licencing.

Crossover Hits: Web Video Meets TV was a lively panel featuring Lisa Donovan, whose character-sketch-comedy podcast LisaNova drew weekly audiences of 500,000 and landed her a cast role on MadTV; Gary Wang, founder of Tudou (China's equivalent of YouTube); and Ty Ahmad-Taylor, VP of Product Development, MTV Networks, who enjoyed a round of applause when he said that "the best antidote to piracy is to make your stuff available," and that not doing so "equals saying STEAL ME!"

Is There Money in Long-Tail Video? Subtitled "Advertising tries to wrap its mind around web video." The moderator of this panel asked five video advertising CEOs to introduce themselves via haiku. Matt Sanchez of VideoEgg offered this pearl of poetic wisdom: "User control. Consumers can skip preroll." This was one of the most informative and surprising panels.

Cash for Content? was supposed to be a discussion of the role of venture capitalists in new media, but devolved into a smackdown between two of the guys, who seemed to know and hate each other. A lot. One of them thought that too much money was being thrown at online video companies (this was news to most people in the room), a lot of "froth and frivolous deals" that don't return investment. In short, new media is no place for VCs. Did I mention that none of these guys smiled or laughed once during the whole panel?

Search and Discovery Face Off pitted Team Search (index size matters!) against Team Discovery (relax and watch what your friends are watching!) — both claiming to have solved the "200 channels and nothing to watch" problem. Both sides had some very compelling things to say about "related video" features and the power of community tagging.

Scaling Profitability in Online Video. You can tell just by the title that this was a Microsoft presentation, right? And if you couldn't, Dan'l Lewin's blue-oxford-shirt-with-tan-khakis uniform would have given it away. He turned things over to his disturbingly excited underling, who gave a well rehearsed demonstration of a product suite that enables Home Shopping Network (and now, consumers like you and me) to make fully interactive video. I have to admit that the product, Silverlight, looked way cool.

The Network Makeover focused on infrastructure: the need for investment in and upgrading of; the possible business models around; and viable devices associated with. The panel featured some choice "IPTV vs. broadband" moments, and the words "company-free" were spoken without serious injury.

Featured Conversation: Steve Chen (YouTube) was a rapid-fire Q/A touching on all the big issues: copyright (hooray for audio and video recognition technology); profits ("In a matter of 24-30 months, if YouTube has 20 minutes of people’s attention, there is monetizability there" — yes, he said "monetizability"); ubiquity ("YouTube’s going to be on Mars" — yes, he really said that, too).

The New Studios and Talent Face Off continued in the spirit of the Search vs. Discovery panel, but with dirtier jokes (it was facilitated by Kent Nichols, creator/writer/head assassin, Ask-a-Ninja). Dina Kaplan, founder of, and Herb Scannel of Next New Networks had intriguing predictions about competing VCPs (video content providers) "banding together" to convince advertisers there's more to new media than videos of cats flushing toilets. The panel encouraged creators to embrace the idea that every show is its own brand, using the Sarah Silverman/Rocketboom "brand match" as an example.

Quincy Smith, CBS Interactive — you just have to see this crazy-genius guy for yourself. He's awesome. I honestly can't even begin to summarize him; you really, really, really should watch the video.

New Media Platforms featured another spirited debate, this time between Gina Bianchini, founder of Ning, and Henrik Werderlin, founder of Joost. Says Ning: online communities are self-organizing and filter their own content, hence no need for "editorial content" (featured or "premium" videos). Says Joost: search is an outmoded and suppressive method of finding content; navigation and discovery must be made part of the experience and part of the fun, so editorial content adds value. Both sides (and the other panelists) agreed that social filtering is crucial. Joost got extra points for including "microboredom" as a driver of online video consumption. Microboredom! It's not in the dictionary; it's not even in Wikipedia!

In all, it was a terrific conference, both panel- and networking-wise; if it happens again next year, we should shut down the department for a day and all go together — heck, let's bring CSB with us. Maybe they'll have the stamina to stick around for the Web Video Celebrity Game Show grand finale (I, sadly, did not).