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Tuesday, March 10, 2009

The Case for Streaming Video

In California, a trim ebullient 66 year old attorney spends an hour each day in his office watching Twilight Zone episodes from the early 1960's on Hulu.com (I wonder to whom he is billing that hour!). Three thousand miles away, in the mid-Atlantic, an erudite and lovely lady of a certain age never misses The Daily Show on Hulu.com or Grey's Anatomy on ABC.com. Her husband, a 59 year old crusty curmudgeon, is a private investor struggling through a winter of discontent. The old grouch rarely turns on his TV but he watches 30 Rock on his laptop thanks to Hulu.com and monitors his sinking finances via CNBC.com daily. What on earth is going on? Streaming video has changed their habits forever.

What is streaming video? Simply put, it is video that is watched in the digital space. It may be the latest episode of a mainstream TV series, a home made film on You Tube, a news or sport clip from CNN or ESPN, or a vintage movie that you watch for free on an illegal site based in China. Or, it could be Video on Demand that you pay for via your Comcast or Time Warner subscription. As it catches on, it will change our way of using media in general and in launching and supporting brands.

Almost exactly a year ago today, NBC Universal and News Corp. (Fox) announced an unusual joint venture with a strange Chinese name. They dubbed their new service Hulu.com and it grew steadily from day one. Hulu featured hundreds of episodes of old TV shows from decades ago as well recent episodes and clips from current shows on NBC, Fox, and a number of cable channels. They also had a motley mix of feature films. The service was free to consumers but ad supported. Viewers only saw roughly 1/4 of the advertising that a live viewer on TV would see. The model seemed just about right--viewers would put up with a bit of advertising when the service was free. Advertisers like it as you cannot zip or zap commercials as you can with a remote in your hand or a DVR. And, you watch what you want exactly when you want. Hulu distributes content to its own site but also syndicates it to many others. They have received a lot more attention in recent weeks after launching an ad campaign in Super Bowl XLIII featuring Alec Baldwin.

Time magazine, in its year end issue, rated Hulu.com the 4th best website of 2008. The editors sent shudders to the big MSO's when they said "when cable eventually dies, websites like Hulu will be responsible". They go on to describe the service as a corporate knockoff of YouTube that "has untethered TV from that box in your living room".

Why on earth would NBC Universal and Fox create Hulu.com? Doesn't it merely hasten the decline of their networks? Yes, to a certain degree it does. To me, both companies are being realistic. People are abandoning broadcast and now cable to watch video online. So, by creating Hulu, they have created an advertising supported service that still reaches many viewers to their key programs. And it catches some light viewers, and very importantly, some exceptionally light viewers. Today, Hulu.com outdelivers ABC.com and other leading players in the field. As of August, they sell local availabilities across any DMA in the U.S. They are pricey locally just as the CPM is higher for spot TV vs. network. However, you must see the commercials to get to content so real world delivery of the message may be nearly as efficient as TV. CBS has announced that it will soon release a Hulu clone with some of their programming. If you haven't tried Hulu, do so soon. It does not save as much time as a DVR does but it is close and is a very good experience.

But streaming video expands far beyond Hulu. This morning I was dying to see highlights of the epic Syracuse-UConn basketball game that went to six overtimes. I scrambled to ESPN.com and patiently watched a 15 second commercial prior to seeing the clip. Magazines, even highbrow books, offer it on their sites and when buying ad networks, bring the topic up with your sales rep. You will be surprised where your spot will be shown. And, the odds are good that you will introduce a substantial number of blue chip viewers who have either been underexposed to your commercial via broadcast/cable or not seen it at all. In an era when reach & frequency projections are suspect, authentic fresh reach, although small at present, is highly desirable.

Finally, some research, admittedly fragmentary, makes a case for making streaming video a part of your marketing mix. When advertisers have used streaming video and TV, they find that key brand metrics and message communication work just as well via streaming video as with conventional methods of delivery. And, again, streaming has the added plus of finding some of those hard to reach light TV viewers like many of us in the business.

Is video the future of digital advertising? I would say that it has to be. For years, critics blasted television content. It was considered "a vast wasteland." Yet viewing levels continued to inch up year after year. David Moore, CEO of 24/7 Real Media put it well last year when describing streaming video--"No other advertising vehicle combines the sight, sound and motion of television ads with the interactivity, targeting, and measurability of the Internet."

Face it! Americans, particularly younger Americans do not read enough. But they watch video anywhere, including their cell phone. Recent studies have shown that teenagers now go to YouTube in many cases before Wikipedia when they are researching a topic. The thought process is that maybe a video in some form is available on the subject.

Last month, America celebrated the 200th anniversary of the birth of Abraham Lincoln. Libraries highlighted dozens of Lincoln biographies on their shelves. C-Span and the History Channel gave him great coverage and commentators quoted him at length. Well, I dug up a quotation from Honest Abe that could be an exellent fit with today's situation regarding streaming video. Lincoln said "the best thing about the future is that it comes only one day at a time."

So, take a tip from our 16th president. You do not have to plunge into streaming video tomorrow. But, start to get ready. Maybe test several low cost venues later this year and certainly next. Once consumers of all ages get into it, there will be no turning back. Get to know this powerful new media force well before it becomes mainstream.

If you would like to contact Don Cole directly, you can reach him at doncolemedia@gmail.com

1 comment:

  1. This is a great article on the rapidly advancing world of Online video. Do you have any suggestions for methods to stream this online media back to the TV? I know this seems counter-intuitive as online video is unleashing the TV, but I also see it as a great way to receive even more content to the TV; ready whenever I want to watch it.