Microsoft’s Winning Bet On Video

microsoft

We’ve all been hearing lately about startups failing to deliver a profitable distribution model for content creators. Now – thank you Ad Lab – we’re seeing smarter technologies emerging to tackle the apparently tricky online video distribution dilemma.

Contextual Ads for Video. Through speech recognition, this technology enables ads to be dynamically served based on the content discussed in the video.

I’m really impressed by the way that Microsoft is handling online video. First, this really smart and simple advertising solution will most probably have more effect than a clickable branded banner.

Plus Microsoft is developing its Smart Trailers technology, a great feature that analyzes a movie file and spits a trailer out. While Google complains that it’s losing money on Myspace with their text ads – whereas Ford is satisfied enough with the even lamer Myspace video show Roommates to sponsor the second season – Microsoft has bet on video as the next best thing on the Web and this strategy is starting to show amazingly coherent results.

With or without Yahoo!, Microsoft is definitely shaking the ladder on top of which Google is starting to slip gently back down.

Revver Broke – Change Video Formats To Change Revenue Models

revver

Revver is looking for generous souls to help them get out of a supposedly $1 million debt. The company had declared a few months ago they had reached $1 million in revenue shared with video creators. We now know they didn’t have the money that they re-distributed.

Once again we are the spectators of an online video company that is failing to provide video creators with a solid and lucrative distribution model. The incentive of a 50-50 deal was quite attractive though. Lonelygirl15 switched to Revver, the DietCoke-Mentos video was distributed on Revver…

If videos are not profitable on the Internet just yet for independent content creators, it is for the simple reason that film formats haven’t experienced a profound change. Hollywood is paying millions to find solutions, but lack to reconsider their own film production models. This situation will remain the same as long as a movie is represented by a single file. Downloading a streaming movie online is really easy thanks to wares like Zamzar. As long as video distribution platforms are not looking at other ideas like video atomization, we can’t expect big changes from the online video distribution industry.

Introduction To Video Atomization

video formats

In the actual trends of online video, startups focus on many different and crucial dimensions of the video business:

  • Visible Measures focus on providing a robust analytics platform for video distribution businesses.
  • Seesmic focuses on bringing videos to our online social interactions.
  • Blinkx is a leader in video search.
  • Youtube is the emperor of user-generated video.
  • Revver has pioneered in bringing ad dollars to content creators.
  • Hulu is trying to figure out a profitable business model for distributing big budget movies online.
  • Kyte empowers content creators’ channels.
  • Veeker bridges your mobile videos to your online networks.
  • And so on…

I see something missing there. None of those companies focus on changing the format of the video to create new consumption styles. If you seriously consider the way we consume media today, it is mainly through small screens. We prefer streaming videos to save space on our hard-disks. We have portable media players to watch a clip while we wait for the bus or when in line at the post office.

Podcasts never reached the heights expected for the simple reason that behind a micro-media format, the content was the same. People were recording boring 10-minute clips that had only 30 seconds of interesting content. Take Robert Scoble’s Podtech show. The guy gets to meet all the cool crowd of the Silicon Valley. However, sorry to say that, but the video quality sucks! It’s boring, slow, unexciting, with a shaky hand filming, an unorganized content… Scoble is popular so 2.0 entrepreneurs like to be in his show. However, I was doing the same kind of low-quality video until recently, and let me tell you that my interviewees were not really excited with the results.

My point is that Scoble’s videos could really hit the jackpot if Podtech realizes that videos need to be remodeled before being put online. Furthermore, instead of putting the whole file raw in their database, maybe they could splice it into mini-files, making the video’s content more directly accessible to the viewers.

Cisco beating Hulu’s experience

cisco video ads

After Hulu CTO Eric Feng stopped by NewTeeVee HQ, Liz Gannes posted an article to share their discussion.

The most important message is that Hulu is getting ready to launch in about two months. Exciting news! Hulu has gotten some really good publicity online since launch, but there is still something that I can’t quite put my finger on: Why so many short clips?

Hulu short clips

In his discussion with Liz Gannes, Eric Feng said:

Users are spending more than half an hour on the service at a time, and they appear to be more interested in full-length shows than clips.

I figure they’ve put so many clips out there to test out users’ behavior.

Anyhow, I finally watched an entire episode on the platform to see how advertisers were fitting in. Well let me tell you, some of them have created video clips way more interactive than what Hulu is offering.

Cisco has a hip and surprising advertising video clip (inserted twice in each show, a la traditional tv ad). If you click on the ads, you land here:

cisco video ads

Basically, a longer version of the advertising clip plays again, and an invitation to discover more of what is happening in the scenario of the ad appears when the play head hits a ! mark (highlighted here in red).

In this ad, Cisco is creating a unique video experience, where viewers are invited to discover more of the story that is being brought to them, and are not limited to a static page product demo.

Like the SF Chronicle would say: sf chronicle clap