ventuno's posterous

State of Online Video in India

Its apparent from the table above that one of the main issues with the state of online video in India is that Indians don’t consume as much content as their counterparts in the US.  The reason usually attributed to this is that the internet penetration is very low. India has 100 million internet connections and is the 3^rd largest internet population in the world next to China and US! However, out of this 100 million, 40 million come from mobile and within the 60 million online, actives are only 30 million. The main reasons for lower consumption of videos are also because

•        Availability of quality video content
•    Few sites in India provide video content

 

The reasons for lack of quality content online, both short and long form, is due to fact that there are limited monetization avenues and distribution/syndication mechanisms for video content are very limited today in India.   

Although there are many video ad networks, their ability to give good inventory fills and yields are suspect.  The main reasons for the same are

·         They are trying to get ad budgets allocated from digital spends as opposed to TV spends
·         Because of the above mentioned reason they end up selling video ad inventory like a display ad inventory
·         They are limited to getting ads to one geography today i.e., if it’s an Indian ad network you would get ads only for India.

This monetization limitation makes content development, specific to this medium, very challenging for publishers and independent content creators.  Also for the traditional content owner have not found the right set of service providers who would make their content ready for mobile and internet consumption and distribute them across the web and mobile access points.  There are content networks like TAN, Rajshri, & Star TV out there in the market; however, they are limited in providing content only from their library which makes their reach very limited.

The solution for this problem is mainly a content network that can aggregate content across categories from multiple quality content owners from the traditional world and push it to publishers with content/audience matching and monetization.  This clearly creates not only large scale audience across categories but also creates reach and targeting for advertisers like they are used to in the TV world.

 

 

Online Video Competency

To say "Video is the future of Online Media” would be a huge understatement.  As we speak, many traditional media companies are looking at video enabling their online properties, while new media companies are creating revolutionary business models around video content.  However, video enabling a website is easier said than done!  There are three key components that should be considered while doing this:

1. Setting up the required video platform & infrastructure
2. Getting relevant video content that would interest the website’s audience, thus, enhancing the current offering
3.  Increasing the monetization of the website while adding video content

Each of these components can be available within the company and/or outsourced.

 

Video Platform & Infrastructure

Infrastructure is the software component that helps you upload, organize, manage, publish, distribute, monetize and analyze your video assets online.  You could either build this infrastructure on your own or get it from an online video platform company.  Unless the video competency within your organization is high and video is core to your business strategy, building and maintaining it on your own is an expensive proposition.  When sourcing a video platform, the main considerations are to understand the capabilities in terms of content management, publishing and distribution, ad monetization and support available for the platform.  One should also understand the bandwidth and platform costs.  This coupled with content costs helps to calculate the ROI on your video strategy. 

Video Content

Video content, unlike other content types is not easy to create.  Producing video content is both expensive and requires a lot of expertise.  An alternative is to procure content from available sources, though this is not necessarily easy.  Alternative sources of content would typically come from

• Traditional content creators
• Content aggregators
• Content networks

Sourcing from traditional content creators for online use is tricky as they are used to a set way of thinking and are not always open to the new media revenue models.  Traditional content pricing typically involves an upfront fixed fee with geographical limitations.  Going to aggregators usually carries fixed fees and in some cases minimum guaranties and/or revenue share.  In case of a revenue share model too, most times a minimum guarantee amount is expected.  Then there are large content networks where you will not only get content but also a payout when ads are run.  However, you will have no control over the in-stream ad monetization and you will have to depend on that content networks’ capability to fill and monetize the same. 

Monetization

Monetization is typically from subscriptions, pay-per-view, sponsorships and ads. If you have compelling premium content that is copyrighted or licensed by you then subscription and or pay-per-view models could be an option.  But getting scale on the back of subscriptions is not easy; however, if executed correctly, you could make a tidy margin.  Monetization through advertising is popular amongst existing websites that have video capability.  This requires a website to have a robust video ad server, a direct sales team and a large enough ad inventory, else getting ads directly from advertisers and agencies is close to impossible.  Also, geographical split of content views creates a complexity that would require you to offload your remnant inventory to video ad networks.  Lack of standard adoption makes integration with multiple video ad networks a complex task.  Having done all this, you have to make sure that your analytics and reporting are detailed enough to optimize and maximize revenue generation and profit margins.  

If executed correctly, online video will help you reap benefits both in terms of top and bottom line.  The key to success is to clearly identify where in the video competency matrix you fall and choose the right video solution partner to guide you through the process.

 

Dec 2007 - Ventuno's Origin

Evolving Online Video

 

Every media distribution technology was built upon its predecessor. Television did not simply appear - it evolved from the radio. TV’s evolution is marked by a series of milestones; and several inventors, scientists, artists, financiers, corporations and even nations contributed to its progress. Most radio operators considered TV as an investment in future technology and did not see profits till the late 40s worked on two business models, namely subscriptions and advertisements.

Online video, like TV, is an outcome of a series of milestones rather than a single event. Traditional media companies embraced the internet, both in the web 1.0 and 2.0 era, and have worked with both subscription and advertisement models. They have had little success with the subscription model making it clear that what worked in one medium will not necessarily work in another.

In the TV world, the consumer is bored of the normal linear scheduled television programming because you can’t interact with it, view it when and where you want, and easily distribute it. The content producers’ revenue potential is limited in the absence of on-demand services, limited artistic freedom, and lack of global reach. The marketer cannot target and measure his campaigns, and hence hopes their ads work and have little control over the effectiveness of their marketing spend. Online video overcomes all these obstacles, paving a new way to consume, create, and distribute, video content.

In India, the success of online video depends on PC and broadband penetration. We add roughly 5.5 million PCs per year and our total broadband connections is 2.5 million against a target of 9 million by the year 2007! In spite of the low penetration, Alexa.com lists youtube.com as the 6th most trafficked site in India making it clear that even at these penetration levels online video consumption is healthy. Reducing the cost of PCs and broadband connections and government’s speedy release of spectrum to enable rollout of 3G and WiMAX services and use of power lines will accelerate the broadband growth.

Success also depends on more players creating and publishing online videos. Traditional media companies are sitting on a huge inventory of quality video content. This is not available online because of costs involved for conversion to online format, effective monetization avenues, and complexity of building and maintaining a video infrastructure. Internet companies are not skilled enough to create quality video content and video sourcing avenues, too, were not only limited, but also is very expensive to them. Right approach to bridging this gap would exponentially increase online video content in a very short span of time.

Indian online ad market is 400 crores today and this is expected to touch 4000 crores by 2012. What percentage of this is going to be from video ads or ads leveraging videos depends on the video ad inventory available and effective means to target and measure these ads. Once this is in place there is little that needs to be done, as the benefits of video ads far out weigh text/banner ads, to move existing and new advertisers to leverage video ad inventory.

The recent spurt of ad networks in India, elicited comments like “India doesn’t need another ad network, but more publishers”. This is truer in the case of video as there is not only a lack of content, but also a lesser number of publishers. For this reason ad networks will fail as they are prone to just add video ads to their existing offerings. A better approach is to create an eco-system where content producers, content publishers, advertisers and platform owners come together to create value for all stakeholders.