Brad Greenspan says that by 2009: his proposed WSJVideo site - an open, video-focused, ad-supported site would generate 10 billion video views for the year. Using a $30 CPM rate, the venture will generate $243 million in revenue and $135.5 million in operating profits.
Greenspan is Intermix’s founder, he currently runs a bunch of websites with a heavy emphasis on video. We’re about to partner with one of Mr. Greenspan’s video sites and add them to our syndication network which includes YouTube, Joost, and many more. I sure do hope that Greenspan’s video sites see those kind of rates, too, cause then we’ll generate a decent return on our partnership.
Anyway, I really do wish Greenspan well, he’s got balls, courage and ambition in his quest to wrest Dow Jones away from Rupert Murdoch (check out MetaMojo.com’s video results for Murdoch, by the way) and News Corp.
My real point here is the following:
1- it’s a good thing those numbers are for 2009, because in 2007 and 2008, I doubt any of that is realistic.
2- everyone right now is in a very generous mode regarding video because they either a) don’t own rights to it or b) don’t make money off of it, so no one really minds giving it away.
a) We at WatchMojo.com will be allowing embeddable clips very soon as we inch closer to relaunching next week. I think YouTube showed that the embed function is a no-brainer to scale. Point well taken.
But as I’ve said before, YouTube was all for giving it away because they didn’t own it. It’s a simple decision then. I don’t mind sharing the crack pipe either if neither the crack nor the pipe is mine.
b) Today CBS announced that it was partnering up with 400 or so sites to syndicate its content. Sure, they own the content, but then Quincy Smith pointed to an example of a Sopranos clip which was in fact, a commercial for the real thing. In this case, long term, the revenue potential for said clip is minimal, so naturally they want to extend the reach of that kind of content.
My prediction is that over time as money starts to trickle into video inventory, you will see the opposite happen: either embeds will come with pre-roll ads which will discourage people from reposting elsewhere… or many content producers will refuse to allow for embedding to capture both pre-roll and contextual advertising.
Of course, eventually, someone will come up with the genius idea to allow a publisher to embed ads from another producer and add ads on top.
Guess what, someone already has: Center Networks’ Allen Stern and a couple of developers came up with Revlayer, a product that will definitely do a lot to both:
a) discourage publishers to enable embedding options and
b) become the video’s answer to Gator in the eyes of content owners. It took some time, but Gator fought hard to shed its image.
Until this came along, I was willing to allow for people to embed WatchMojo.com’s content without inserting a pre-roll… the instant I see a third-party publisher insert an ad, I’ll either remove the clip from being embeddable OR insert an ad, creating a mish-mash that will hurt the user experience. That’s me; and old media company will yank the embed feature altogether.
I chalk this up to Google envy, everyone wants to become a middleman in the new burgeoning video space, but very few want to create content, rather, they want to build empires off content creators and owners’ back.
I started off this post questioning the validity and likelihood of Brad Greenspan’s projections for WSJ’s hitherto-non-existent video site in 2009, there was a reason. Even Google has thus far failed to show any revenues despite owning Google and having Ad Sense. We partner with YouTube as a distribution partner, one day I expect them to be a big money maker, but not now, not yet.
People have no choice but to love to learn Google. But all new companies who suffer from Google envy lose out because of it. That’s right, it is extremely hard for any third party intermediary to gain a foothold in any ad market because content owners and publishers with audiences fear creating another Google. So here’s an advice, if you are going to make an attempt, try taking a less dubious route.
I’ll add this:
- 99% of publishers won’t want to trust any third party and will want to be in control of advertising directly, so they’ll pass on Revlayer. And even the publishers that might want to look to a third party won’t trust something that makes Gator looks honest and ethical. Frankly, most sites will not legally feel safe to run with this, if any of the contracts I see are an indication.
- 99% of the smaller blogs that will run this will make a solid $0.31, trust me. So they’ll use this, turn off content producers, get impatient with the lack of revenue… and everyone involved will lose.
Revlayer has a shot at carving out a niche, but not this way. This is a brazen way that will only piss off everyone involved in the value chain.
This morning I asked “is innovation a right, privilege or an obligation?” In a nutshell: is it fair to technology to pillar and plunder rightsholders assets because they could?
I sometimes hope that media companies put more content online, but everytime they tippy toe online comes along a technology company that shows a total disregard for their intellectual property.
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