New Report & Fun Facts About Video Consumption in 2012

Ooyala, a company we respect in the online video world, just released its "Global Video Index -- 2012 Year in Review" that lays out certain interesting findings and conclusions based on metrics captured by video customer usage.  Here are some of the ones I find most intriguing:

-- FINDING:  Conversion rates for branded videos jumped 91% from the start of Q4 2012 to their peak in mid-December 2012; CONCLUSION: "there's a huge opportunity for retailers, e-tailers and consumer brands to connect with online audiences between Black Friday and Christmas Day."

-- FINDING: "Measured together, the share of all hours spent watching streaming video on tablets and mobile phones increased 100% in 2012."

-- FINDING: "On desktops, viewers watched live video 18 times longer than VOD content in Q4."  CONCLUSION:  Live video is more engaging!

-- FINDING:  About 33% of total tablet video viewing was with premium long-form video content (running more than 60 minutes); and the percentage of time spent watching long-form video (over 10 minutes) on tablets increased 37% from Q1 to Q4 2012.  CONCLUSION:  Multi-screen viewing of long-form premium video is growing significantly.

Media Companies -- Resist the Temptation to Grant Exclusivity!

Right now, it's a land-grab -- nay, all out war -- in the wonderful world of video.  The OTT guys v. themselves v. the pay TV guys v. themselves.  Netflix v. Amazon v. Hulu v. Apple v. Google v. HBO, just to name a few.

Case in point.  Two recent content licensing deals, both of which are EXCLUSIVE.

Netflix inked a mega-deal with Disney for exclusive rights to Disney classic animation films, as well as new Disney films (both live and animated), Pixar films, Marvel films and more.  That means that Netflix -- not Amazon or Hulu or other OTTs -- will have exclusive rights to distribute films online and mobile during their pay-TV "window" (i.e., 6-9 months after their theatrical release).  That also means no HBO Go during that window.

Not to be outdone, HBO struck right back and inked its own mega-deal with Universal Studios for exclusive rights to Universal Pictures and Focus Features' films during this same pay TV window, securing all relevant rights (including online and mobile) at least during that pay TV window (unclear when those rights open up again thereafter).

How did these exclusive deals get "done"?  After all, exclusivity is something no content provider wants to give up.  Rule #1 in dealmaking in content licensing deals is to keep all other options open when you strike a deal with one.  You want there to be a feeding frenzy for your content.  Create it once -- but exploit it as many times as you can.

Well, these mega-deals were done the old-fashioned way.  Netflix and HBO, in each respective case, ponied up big.  Hugely big.  Hundreds of Millions of dollars annually (and billions overall) big.  That's how big.  How can a media executive refuse such dineiro?  They see it.  Mouths water.  They must grab it.

Or, must they?  Should they?

Sure, it is easy to take the immediate cash -- especially when they come in boatloads.  It is harder, however, to be reflective.

But, reflect on this.

We are still in the early innings of multi-screen video distribution.  Yes, we already see voracious demand.  But, make no mistake, what we see today is only a small fraction of what we will see 2 years from now -- 5 years from now -- 10 years from now (which is the life of some of these mega-deals, including the HBO/Universal deal).  Even in a few years, the world of video (and video consumption) will be radically different.  We can't even really imagine it -- and, that's the case even for insiders in the multi-screen world who drive these forces of change (and many studio executives still don't appreciate these forces).

My central point is this -- the massive bucks of today inevitably will be seen as mere tidbits 5-10 years from now (remember, these are the lifespans of most mega-content licensing deals).  That means that studio execs today are likely making deals that sound great today, but will be dogs a few years from now (when the content licensees -- like Netflix and HBO -- will be smiling at being the tortoise and not the hare).

Why grant exclusivity when we have no idea what the digital media landscape will be like in 2, 3, let alone 5-10 years?  Why not step back from your Pavlovian response and instead milk the power of your content by demanding top dollar from the burgeoning number of video distributors in the multi-screen eco-system?  If your content is compelling -- which, it is in both cases above -- then I have little doubt that NON-exclusive licenses are the "right" answer.  Sure, each individual deal yields less -- and likely significantly less.

But, add them up across multiple licensees/distributors, and now you really got something -- especially if you keep the terms of those deals much shorter to really preserve all of your options.  Again, right now, no one knows what the world of video consumption will be like in just a few years.  If you lock yourself in for 5-10 years, you likely will kick yourself for leaving mega-bucks on the table at that time.

Maybe many studio execs just don't care -- and figure they won't be there at that time to scratch their heads and wonder why they struck those deals in the first place, when the REAL mega-bucks are in play.

My "two cents" ....

My Latest HuffPost -- 8 Ways to Maximize Live Sports & Music Revenues

Just published again in The Huffington Post -- about a topic near and dear to me -- live music and sports.  Here it is -- "8 Ways to Maximize Live Sports & Music Revenues."

I attend a lot of live events.  I know what matters to me as a fan.  And, I am fortunate to have been both the offline/physical/live event and online/virtual worlds in my career -- and, perhaps accordingly, have a unique perspective.

Enjoy -- let me know what you think -- spread the word.

And, check out the non-profit I reference in the article -- The Giving Tree Movement (which is a non-profit started by my wife, Luisa).

What's Yahoo! To Do? Here's What -- Disrupt Video!

Yahoo!'s Marissa Mayer has been on the job as CEO for about 6 months now.  Still too early for a verdict.  But, just yesterday, Yahoo! redesigned its site to mixed reviews.  On the more pessimistic side, leading tech blog Gigaom calls "Yahoo!'s latest attempt to reinvent the portal [as being] too little and too late."

So, what's Yahoo! to do?

"Disrupt [the] legacy media distribution and consumption" model "via online video," that's what -- in a "must read" analysis titled "Video and Yahoo" by Mucker Blog.  Mucker Blog is the mouthpiece for SoCal start-up focused accelerator MuckerLab.

Mucker's analysis is well-reasoned, thought-provoking, insightful -- and whatever other "you know what I mean" words you can think of.  Definitely worth the time for anyone interested at all in the media business and online video (and the disruption to both happening right before our eyes).

Here are some nuggets from that analysis:

-- "Yahoo is a new media distribution and monetization company -- and its main asset is its audience of 150M monthly unique visitors and its 1000+ strong sales force for selling premium advertising."  "Put it another way, Yahoo is a new media network ... [and] is really closer to ABC, NBC, and even Comcast than it is closer to Google."

-- "Yahoo needs to re-invent yahoo.com as a major destination with video as one of its main forms of content."

-- "Yahoo should partner with companies like Maker and Machinima or -- ideally -- acquire one or both to gain scale and full economics right away."

-- "Yahoo should attempt to license premium TV content for over-the-top linear TV applications."  And, "Yahoo could become Hollywood's best friend and beat all the other online companies to the punch" in doing so.

-- "In the end, the right portfolio of online content combined with traditional TV content PLUS a native user experience for cross device consumption will be a game changer and sets the stage for Yahoo to take over the living room."

Q.E.D. and res ipsa loquitur.

Well said and well reasoned, MuckerLab and Mucker Blog!

First Coachella, Next Bottle Rock in Napa

I am an ardent music fan, as regular readers of my blog know.  And, I love the live festival experience -- and attend major music festivals frequently.  Here is my review of the inaugural SS Coachella, on which I sailed in December with my wife Luisa.

Just recently, I purchased my tickets for my 4th near-consecutive Coachella in April.  And, just last week, I learned about a major music festival called "Bottle Rock" in Napa on May 9-12th.  The line-up is incredible for this 4-day festival (here it is).  As soon as some friends invited me, they had me at "hello"-- and, my wife and I will be there.

Likely a new annual tradition, together with Coachella, SS Coachella, Outside Lands and myriad "regular" music concerts on a monthly basis (like the MUSE show in January in San Diego -- which opened with this song).

25% of Netflix "House of Cards" Viewers Binged -- Watched All 13 Episodes

Netflix's first major foray into original programming -- "House of Cards" -- is a critic's darling.

It also appears to be a big Neflix user hit.

Apart from the show itself, the big story, of course, is Netflix's decision to make all 13 episodes available at the same time -- rather than release them over time (which is the industry standard).  Kirk Punches just recently wrote a guest post on this subject on my blog.

Remarkably, Daily Variety reports that a full quarter (25%) of all users who viewed the first episode of "House of Cards" fully "binged" and watched all 13 episodes.

Think about that.  Quite incredible.  Just think of the stamina alone!

Perhaps not so surprising after all, though.  How many times have you picked up a book and couldn't put it down?  If it's good -- really good -- that's what happens.

Well, that is happening here with "House of Cards."  And, you can bet that Amazon, Google and others -- including HBO -- are taking notice.

MUSE Video -- First Song of U.S. Tour, San Diego

A couple weeks back, my family and I saw (more like, "experienced") MUSE, as the band kicked off its U.S. tour in San Diego.  Here is how the band opened its first show:

GUEST POST -- Kirk Punches on "Binge Viewing", Netflix Style

This guest post is from Kirk Punches, VP Biz Dev & Strategy of online video leader Sorenson Media.  I work closely with Kirk -- and he has a great mind (and excellent insights).  Kirk blogs at "Technology Trends for a Multi-Screen World."

An interesting perspective from Andrew Wallenstein over at Variety in his article, "Analysis: Why Netflix must rethink binge viewing."  He argues that Netflix is making a mistake in releasing all 13 episodes of "House of Cards", the company's original scripted series that debuted this past Friday. His argument centers around the fact that releasing all episodes at once minimizes the opportunity to generate revenue because new subscribers may join, watch all of the episodes, and then cancel their membership. Because those same subscribers watch all at once, they won't become invested in the series and build buzz which in turn, won't drive additional subscribers.

While I appreciate Andrew's detailed analysis - I disagree with his argument. Sure, I might sit and watch all episodes in one sitting and cancel my membership but if the goal is to add new subscribers and add-value for existing subscribers (like me) then I think Netflix will succeed. The world has changed and most of us are busy - we like binge viewing (for the reasons Andrew lists) but it drives engagement, discussion, buzz, and additional viewing. That "thirst" for viewing episode after episode creates interest in other similar types of shows and movies. Instead of canceling a membership, subscribers will likely explore new series to watch - salivating to re-experience the satisfaction of episode after episode. Trust me, I know from first-hand experience how addicting this can be. A habit is formed and this becomes the norm, not the exception. The experience of watching multiple episodes also generates a deeper understanding of the plot and characters of a show- you become more invested. You want to get others involved. I've found myself easily getting 3 episodes deep into show, bleary-eyed and pausing on the big screen and continuing by tablet or even phone while traveling -Netflix makes this very, very easy and I believe releasing all episodes at once will be a success in driving revenue and subscriber growth.