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WatchMojo NewsletterI probably did hundreds of SWOT analysis when I was in business school, but never did one for WatchMojo.com.
With online video aggregator Joost shutting down today, and YouTube co-founder Steve Chen leaving Google, I thought the following SWOT analysis I created for a potential hire would be interesting to online video industry followers.
The following SWOT focuses on professional video content. Enjoy, comments and questions welcome.
SWOT -
Quincy Jones gets it:
“Print and all that stuff is over, we gotta remember that,” Jones said. “The Chicago Tribune, The Seattle Post Intelligencer. The Miami Herald. They’re over the same way as the record business. We have got to get into this century.”
The Ten Commandments are recognized as the moral foundation in Judaism, Christianity and Islam. They also serve as the basis for many judicial systems around the world. Today however, I will be focusing on a specific commandment, namely number VIII on the infamous stone tablets Moses schlepped down Mount Sinai: Thou Shalt Not Steal.
A few weeks ago I stumbled onto a blog developed by two former ad execs, Jon Noel & Adam Kubik. Now, this isn’t your typical Perezite Hilton, celebrity gossip site… StealOurIdeas.com is creativity with a sense of humor, media relevance and political flare.
I had a chance to ask Jon & Adam a question, here’s what they had to say:
WM.com:
“So guys, what if someone wanted to steal one of your ideas and use it in a campaign?”
Jon & Adam:
“…we’d of course hope they’d either give us credit or compensate us, but it’s up to them. There are a lot of reasons we’re doing the site and money & fame aren’t too high on the list. It’s similar to why does a graffiti artist leaves his mark on a wall if no one knows who he is. We needed a creative outlet that we weren’t getting from the ad world so we started this site in response to some of the problems with the industry. We’re having fun with it, and people seem to enjoy it as well; so we’re going to keep it up as long as we can.”
Not only do they freely allow advertisers and agencies to steal the ideas posted on their blog, but they even allow people to submit creative briefs, which they will develop into a custom idea just for you. Briefs can be emailed to Stealourideas@gmail.com.
So if one day you find yourself with a mental block lasting longer than Moses and his posse’s trek through the desert, send Jon & Adam a quick note and you should expect to receive the creative equivalent of manna…
Joost will now offer a white-label version of its software and lay off some folks, including CEO Mike Volpi.
We signed a distribution deal with Joost before they launched, we were very proud to be a part of their roster (read more in my post at the time called: Joost what does WatchMojo.com Have in Common with Viacom, CNN, Turner, Sony, CBS, Warner Music Group and the NHL?)
We were equally proud to sign a deal with hulu, who also put our premium content alongside super premium content from traditional media companies.
The difference, however, is that Joost has left a trail of bizarre decisions and mismanagement. I never said anything, because they were a partner, but today’s news shows that bad decisions have an eventual cost, especially in a very competitive and cluttered marketplace.
For more on that, read:
- Online Video Distribution: The Race for #3 is On…(November 23, 2007)
- Online Video Aggregators: The Fight to Avoid Obsolescence is On (April 6th 2009)
The problem is that Joost was dead on arrival, let alone November 2007 (not 2008, 2007 folks!) when I wrote that first article. By the second article (April 2009), I was wondering why Joost was still burning through VC funds?
The problems really ran across the board:
- the only thing Joost had going for itself was the sleek player, but that initially required a download, making it dead on arrival.
- a bigger problem was that its founders had success disrupting traditional industries, not enabling them.
- the biggest problem, was that Joost’s mid-level people did not really seem to get content either. We had short form 1-3 minute clips that they asked us to re-edit into long form content. You know, the kind that online audiences are running away from TV.
- advertising: they secured big name advertisers (due to their pedigree, perhaps) but failed to have any volume… because they failed to have any traction.
- too much money: read News Corp.’s Rupert Murdoch’s bio, in it, he keeps talking about not having enough capital (yes, that Rupert Murdoch), ditto MySpace. Over time, more money doesn’t prove to do anything but create more problems.
All to say, this reinforces the main theme: financiers don’t know anything about the video industry online, which remains a media and not technology space.
If you can’t say anything nice about someone, don’t say anything at all. Adhering to that adage, I’ve basically kept my mouth shut (for the most part) about Seesmic. Today, with founder Loic LeMeur basically throwing in the towel, I will simply say I never understood it: video comments seemed very backwards from Day 1; a bit like starting a print media company in the day of the Internet. I understood - even less so - why investors poured in $12M, to be perfectly candid.
But, if I say any of this, it’s because I want to say how admirable it is for Le Meur to be candid and courageous to admit why his company is shifting gears and focusing on something else that he initially envisioned.
Mojo Supreme launched a search product (MetaMojo.com), database marketing products (StreetMojo.com), a blog network (this blog being one of them), video content (WatchMojo.com) and frankly, the only thing I can honestly say we focus on now really is the WatchMojo.com (we have built a library of 5,000 videos and served 60,000,000 videos in over 3 years of operations, and are arguably the only company getting licensing fees for its content - oh, we never raised a penny in financing from VCs).
We still run the blog network, but its purpose is to reinforce, support and compliment the video content.
I stopped putting any energy in the search products (when MSFT and its $10B R&D budget get their ass kicked by Google, how would we fare?).
While I won’t make any friends, this is one more nail in the coffin of VCs-as-video-startup-investors. Can we get a candid confirmation from financiers that they don’t know what the hell they were investing instead of the bravado and swagger? Yeah, I’m not holding my breath. This is one more reason why Le Meur deserves some props.
Of course, I don’t have VCs to answer to so I can take my time to see results: Le Meur was candid today in saying that while he believes in the long term prospects of video comments, the timing is off by at least two years… and as an entrepreneur of a VC-funded startup, he needs to show growth to keep Seesmic going as a company.
I respect that, mainly, I respect him for being so honest about things, check out the video below:
It depends, but here is some good insight.
From PE Hub:
How much do you typically give a startup over the life of an investment?
Our median is $4.4 million.
How much do you give a company at the outset?
A median round is $1.5 million. Our median check is $1.25 million and our target, for that amount, is 22 to 25 percent ownership of the company.
We have three products. The first we call our “real deal product,” which is one where we write you a check for $1.25 million for 25 percent of your company. We have the “seed deal product,” which is a check for $500,000 for 20 percent of your company. And we have our “super seed product,” which is $250,000, for 10 percent of your company. There, the entrepreneur has an idea but he’s not really sure if it’ll turn into something. We’ll still write him that check, though, because you know what? That’s one-tenth of one percent of our fund, and because our LPs want us to take risks. It also means that if a company sells for $10 million or $20 million, that still makes us a lot of money.
That sounds a little rigid. What if I don’t want to give you 10 percent of my company for $250,000?
The numbers are averages, we’re definitely flexible. We recently invested $75,000 in a startup that we can’t disclose; we invested $150,000 in a $350,000 round for GoodReads [a social network site for book readers]. What we’re more focused on is having our first check last an entrepreneur for a year or two and ultimately, owning 22 to 25 percent of the company.
Read more.
Wining and dining Nigerian diplomats? $10,000.
Paying off Nigerian government for the Black Gold? $2,500,000,000 (that’s $2.5 billion)
Calling the joint venture NIGAZ? Priceless.
Seriously, you can’t make this shit up. Hat tip to my brother Hooman for letting me know (hey, if my name is Ashkan, did you think my brother would be named Jack?).
For the CEO of the world’s largest technology company to realize that content - not technology - drives advertising says a lot.
all of us sit here as advertisers, we have to ask: Who will be creating the content that people spend time on and what is their motivation and will they even have advertising on their Web sites?
Read more and see Microsoft’s Steve Ballmer’s presentation here.
Social networking is more popular than ever, but it continues to trail online video as the most popular activity online:
Over 70% of US web users watch video clips on the internet, making online video the leading social media platform, ahead of blogging and social networking, according to the Global Web Index.
This is consistent with the fact that consuming content has long been the dominant activity online, at 47%.
The problem, of course, is that in both online video and social media, the business model is trailing the consumer behavior, something that is in fact applicable to all of digital media (people spend 10-25% of their time online, but advertising budgets don’t reflect this yet, with less than 10% of total advertising expenditures going to digital).
The problem with social media and online video is quite different, though:
- in social media, marketers have rejected the notion that they will embrace social networking sites, UGC and the like. eMarketer has consistently scaled back projections for social media advertising, and services like Facebook and Twitter have began to look for non-ad based revenue sources.
- in online video, when it comes to professional (be it super premium or premium) content, marketers are desperate to spend more money, but the problem lies with the fact that the world’s “market maker” for online video, YouTube, has hitherto rejected calls to run pre-rolls.
This might be changing.
Last month, Media Week UK reported that YouTube is testing pre-rolls with some select partners:
Content partners include Channel 4, BBC Worldwide, National Geographic, ITN and Discovery Networks.
In the UK, Warner Brothers, Match.com, Activision, Renault and Nissan will be the first advertisers to show pre-roll ads over the next few weeks.
Channel 4 is the first partner to show these pre-roll ads against content, starting today (21 May). The campaign, brokered by PHD, will promote the new Warner Brothers comedy, The Hangover.
Suveer Kothari, head of YouTube in the UK, said: “Since we launched YouTube, we have been trying to balance the demands of users looking for free, entertaining, professional content on the web, premium content owners looking for ways to monetise their content, and advertisers looking for more premium content for them to showcase their tv creative against. We believe this test will help us balance these demands.”
The recommended length of each pre-roll ad will be 15 seconds, although there will be an upper limit of 30 seconds. The test partners will be able to sell pre-rolls through YouTube. They will be sold on a CPM basis.
I think this is a step in the right direction, despite what the purists will say. Don’t get me wrong, I don’t want to be a hypocrit, as a user, I tune out of pre-rolls. But that being said, if YouTube - who commands 50%-75% market share - keeps snubbing pre-rolls (the main format advertisers want), then they keep stalling the growth of online video.
I am not even saying that one should be selling pre-rolls on YouTube, but that when you tell a marketer that you cannot sell any pre-roll ads, they tend to lose interest.
After all, despite what a lot of philosophers want to believe, pre-rolls is the main format of online video because it is the one users want least. Do you really think when TV was founded, viewers begged for the 30-second TV spot? Of course not.
If and when YouTube embraces pre-rolls (it can be with a very high frequency capping, such as 1 per 24 hours per user on selected content) then you will see revenue soar for both the site, its parent Google and the online video segment in general.
Disclaimer: WatchMojo.com is a content provider to YouTube, we generate 40% of our total streams on YouTube.
