Live video company Ustream has been quietly transforming itself, according to co-founder and CEO Brad Hunstable, who said the company has switched from being an ad-supported media business to a technology provider that makes money from software-as-a-service subscription fees.
Today Ustream is introducing a new service to its SaaS customers — advertising. Hunstable said that as companies start using Ustream as a way to bring their content online, they also need a way to promote that content to the right audience, rather than just sticking a video on their website and hoping for the best.
“Brands and marketers are starting to act like media companies, but they’re not being able to drive targeted viewership for [their content],” Hunstable said.
Ustream’s new LiveAd units allow companies to package their video content into standard display ads. In the examples that Hunstable showed me, the ad is playing video as soon as it loads, but the sound doesn’t start unless you actually mouse over the unit.
Hunstable said companies can use the ads to direct viewers to their site, or they could create a complete viewing experience in the ad itself. They can also add other features to the ad — for example, if they’re promoting video from a conference, they can also include options for viewing tweets from the conference or opening the conference agenda, as you can see in this Cisco ad that ran on TechCrunch.
Ustream works with advertising partners to give those ads reach and to target them at the audience that the customer is living for, Hunstable added. And while the company’s emphasis is on live content, LiveAd campaigns can also be used to find new viewers for those videos after they’re no longer live.
Early LiveAd users include Sony, Salesforce, HBO, radio station hot97, and Cisco. Ustream said their campaigns have resulted in a 10x improvement in viewership and engagement, on average. The average view time has been 12 minutes, the average interaction rates for the ads has been 15 percent, and actual clickthroughs on ads have been “as high as” 1 percent.
As for the broader change in Ustream’s model, Hunstable said it has resulted in “the best year we’ve ever had by far” — the subscription business has higher profit margins, he said, and Ustream’s paid subscribers have doubled in the past year. (The shift did result in a restructuring and small reduction in Ustream’s workforce earlier this year.)