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Trends in rich media consumption and delivery

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Here’s an interesting Q and A session with a panel of experts in the rich media industry — mostly online video – that took place last Tuesday at the Pacific Crest Technology Leadership Forum in Vail, Colorado. The members of the panel:

  • Ron Bloom, CEO, MEVIO
  • Mike Hudack, CEO, Blip.tv
  • Steve Liddell, CEO, Panther Express
  • Joy Marcus, General Manager, DailyMotion U.S.
  • Perry Wu, CEO, BitGravity

Here are the questions, followed by a brief synopsis of the answers, followed by the complete answers in MP3 format.

Q: How has the behavior of the consumer changed over the past year?

  • Joy Marcus – We’re seeing a lot of people moving from high-level, squeaky clean Hollywood stuff to more gritty “Pro-tail” stuff, which is semi-professional, long-tail content.
  • Ron Bloom – Consumers are tired of watching TV. They’ll make their own 30 minutes of entertainment. The real goal is to displace television viewing with a type of viewing that’ll attract brand advertisers. The audience is okay with advertising, they just want a little more freedom of choice. Audience doesn’t know the difference between professionally produced content and garage content – they just know what they like.
  • Mike Hudack – People are starting to use YouTube as a search repository. Other services are better for entire shows to be delivered similar to how a DVR works. We’re seeing more and more people embracing episodic content.

Audio (7:24): http://old.crunchgear.com/audio/richmedia01.mp3

Q: What are your thoughts on time spent online, traffic, and consumption?

  • Perry Wu – We haven’t seen a slowdown in the media space. We’re just putting more and more media on the Internet. Traffic continues to grow on an exponential curve. There’s a seasonality to our business but there’s still a lot more content than there was a year ago, so we see a lot more traffic.

Audio (3:24): http://old.crunchgear.com/audio/richmedia02.mp3 

Q: Broadband has been a big driver. What else can we look forward to as far as driving traffic is concerned?

  • Steve Liddell – Live events are growing exponentially. Live is way more important than anyone thought it was going to be. Applications built around live events make it really compelling to watch things online – chat features, gaming, etc.

Audio (1:38): http://old.crunchgear.com/audio/richmedia03.mp3

Q: What kind of metrics matter to you?

  • Ron Bloom – You have to understand who your customer is. Our customer is the audience, our partner is the owner of the content, and the beneficiary of that relationship is the advertiser. We’re not driven by viral content, stolen content, or pornography, we’re driven by creating an entertainment environment that engages the audience.
  • Mike Hudack –  One of the most important metrics you can watch is the amount of a particular video that somebody watches. It needs to resonate with someone right away. The average time before someone clicks away is eight seconds.
  • Joy Marcus – We’re known for a very high quality video player. We’re also now offering HD, which has been a big focus for us. Quality of content is important but so is the quality of the experience.
  • Mike Hudack – There’s also a challenge about where your content is distributed. What if an ad for Holiday Inn is shown on a blog that trashes the travel industry?

Audio (11:07): http://old.crunchgear.com/audio/richmedia04.mp3

Q: In terms of user generated content, will we ever be able to monetize it or will it just be a traffic driver?

  • Ron Bloom – Google did two interesting things. One, they made search into a pastime. Two, they made advertising for everyone except brands. What’s missing is that there’s no safe haven for brands. The audience is getting tired of user generated content. A new group of companies and service providers is emerging. Can you build a large enough audience to rival television so that you can give brand advertising the audience you have with television along with the efficiencies of the internet?
  • Mike Hudack – One of the problems that YouTube has and viral video has in general with user generated content is that you can monetize it, but do they have the right to monetize that content?
  • Joy Marcus – We have to distinguish between display advertising and in-video advertising. We have no problem monetizing display ads on our player page. When you’re talking about putting a video ad inside a video, where does that video go?  And what happens when a video ad gets placed inside a video we don’t know much about?
  • Perry Wu – One of the things that’s largely ignored in the market is paid-for content, particularly live content. That kind of content is perishable, so people are willing to pay for it. Companies are afraid to charge for stuff on the internet. Not saying that everything should be for-pay content, but there are hundreds of events happening on a weekly basis that people will pay for.
  • Steve Liddell – While everybody’s talking about advertising, very few people are talking about DRM. You’re going to see a renaissance in paid content and DRM.
  • Ron Bloom – By this time next year, brands won’t need to worry about user generated content. There will be large enough audiences for brands to safely advertise. People will move away from TV.

Audio (12:46): http://old.crunchgear.com/audio/richmedia05.mp3

Q: How important is it to make sure that your content is accessible on set-top hardware devices so that the people who resist consuming online content at their desks will be able to consume it in their living rooms?

  • Mike Hudack – The numbers are extraordinarily small right now and the opportunity to traffic third-party verified advertising dynamically in these environments is basically non-existent. We approach it right now as “We want to put a stake in the ground” and it’s a marketing tool to be able to tell a content creator that they’ll be on TV. The challenge is that only a small number of these outlets can handle any type of scale when it comes to content choice. There’s literally limited hard drive capacity at the head. Out of our 33,000 shows, we have to pick about ten to send to Verizon (FiOS), so the experience isn’t the same.
  • Perry Wu – There’s a big economic barrier to overcome. The set-top boxes are subsidized by the MSO’s (multi system operators). The number of TiVo boxes is puny compared to the number of cable boxes. The cable box, plus the cost of deployment, has to be under $300. So they have limited processors and limited hard drive space, especially with online video pushing higher quality and DRM.

Audio (4:30): http://old.crunchgear.com/audio/richmedia06.mp3

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