Marketing with video streaming.

2007-08-20T22:47:00.000-05:00

BUSINESS
MEDIA & ADVERTISING

Nothing to Watch on TV?
Streaming Video Appeals to Niche Audiences
By MICHEL MARRIOTT
Published: August 6, 2007

Johnny Depp, left, and Francesco Quinn in "Con Man."

Buffering ... buffering ... buffering.

Seeing these words blinking at the bottom of the postage-stamp-size screen during a download of jerky video defines the annoying experience of entertainment on a computer monitor.

However, the potential of new streaming video services — fast, full screen and in sharp resolution — is unleashing a torrent of movies and television shows, much of it aimed at narrowly defined audiences that can't find niche programming even on cable systems with 500 or more channels.

The Independent Film Channel is streaming 22 short films called "Trapped in the Closet" by the R&B recording artist R. Kelly.

The Jewish Television Network, a nonprofit television production and distribution company, is streaming music videos by Jewish performers, cooking shows and Israeli news programs. The network is also planning to stream religious services during the High Holy Days in September, the sort of broadcast that would be hard to find on mainstream television.

"There is extreme interest in streaming because it simplifies the process of getting video to the consumer," said Ross Rubin, the director of industry analysis for the NPD Group, a market analysis company.

Streaming video, unlike downloads, never resides on a viewer's computer. It usually cannot be replayed as a downloaded file can be, which is another reason that content creators like it.

The growing use and popularity of streaming among consumers are closely tied to the increasing popularity of broadband Internet connections in homes. The Pew Internet & American Life Project estimated that 47 percent of American households have broadband connections that make streaming possible because it transmits data faster.

"The greater adoption of broadband in the United States is really raising the ante for all kinds of content from premium Hollywood offerings to pet videos," said Mr. Rubin, who noted that NBC and ABC have begun streaming their prime-time programming to online viewers.

This year, the DVD rental company Netflix began to take advantage of click-and-view streaming of full-length films and television episodes with a subscription service. "Push a tab 'Watch Now' and more than 3,000 television episodes and movies come up in 30 seconds or less," said Steve Swasey, a Netflix spokesman. "There's no downloading."

Streaming high-quality video to computers and television screens is the "first step to getting what people want to see on any screen they want, from laptops to cellphones to wide-screen televisions," Mr. Swasey said. "Netflix's goal is to get movies delivered instantly to all those different screens."

Peter Yates for The New York Times
Barry Henthorn, co-founder of ReelTime, which is staking its future on streaming video.

Companies like ReelTime, Joost, Limelight Networks and Brightcove are staking their futures on streaming video.

"We're point, click and watch — instantly," said Barry Henthorn, the chief executive and co-founder of ReelTime. "We never stop and never buffer."

ReelTime, based in Seattle, digitally distributes thousands of movies and television shows to customers who either rent titles for 99 cents each or subscribe to the service for $4.99 a month to $19.99 for six months.

While ReelTime content can easily be watched on desktop and notebook computers, Mr. Henthorn urges customers to connect the computer to the television's larger screen for viewing because, he said, "the quality is that good."

Mr. Henthorn said ReelTime's streaming technology depends on a peer-to-peer network. Some of the content comes straight from ReelTime, but to speed the delivery other portions of it are pulled from subscribers' computers that have previously downloaded the content. The more users who download the ReelTime player and view its content, the faster and better content streams to and from all users.

"Right now all kinds of things are being shoved, rather inefficiently, over the Internet," Mr. Henthorn said. "Once people can watch full-screen video anytime anywhere, the tolerance for four-inch screens will go away."

Streaming has been a boon to media companies catering to a narrowly defined audience.

Short films featuring R. Kelly on the Independent Film Channel's Web site.

FEARnet, for example, has a passion for the horror genre. It began streaming video last Halloween as the "the first multiplatform horror network," with programming that can be viewed online, on demand and on mobile devices, said its president, Diane Robina. The service, free to registered users, whom they call "victims," makes its money from banner advertisements that appear on the Web site. The site uses advanced streaming technologies to deliver full-length horror films like "The Hunger," a 1983 tale of elegant vampires.

FEARnet, a joint venture of Comcast, Sony Pictures Entertainment and Lionsgate, also produces and streams original content. The site is showing a film called "Devil's Trade," about teenagers and a cursed tree in New Jersey. It was originally a six-episode series, shot digitally for the Internet.

The Jewish Television Network had produced programming like "The Jewish Americans," a six-hour documentary that is scheduled to air on Public Broadcasting Service stations in January. Jay Sanderson, the company's chief executive, said he had never considered online distribution of its programming because of the low quality of the video. That changed this year when he saw the improvement.

"We waited until we got to a point where the technology would not hurt our content," Mr. Sanderson said. He said much of his network's existing programming involves 30-minute pieces.

But for the Internet, he said he is cutting them into three- to five-minute segments. "We're going to do some really long programs in the fall," he said.

IP Video U.S. Statistics

2007-08-20T20:16:00.000-05:00

INTERNET/US VIDEO MARKET
Free Newsletter

AUGUST 13, 2007
Online Video: Seeing the Whole Picture

Video images are flooding across the Internet.

No longer an unknown quantity or merely a sidekick to television, the online video medium is fast becoming a formidable viewing factor.

eMarketer projects that the number of online video viewers in the US alone will rise from 114 million in 2006 to 183 million in 2011.

"Some of the major players in the industry are fearful that the widespread availability of video content on the Internet will threaten traditional TV and film distribution models," says Paul Verna, eMarketer Senior Analyst and author of the new report, Online Video: Making Content Pay. "Conversely, others see the potential to increase revenues through a variety of new business models, including ad-supported streaming, pay-to-own downloads, subscription services and online rentals."

Currently, eMarketer estimates that news is the leading type of video content viewed online, with a nearly 14% share of the total. Movie and TV trailers are a close second, at 12%, followed by music videos, at about 11%.

The lowest-ranked categories on this list are either niche genres, such as cartoons and business/financial reports, or content of longer duration, where picture quality is a consideration, such as full-length movies and TV shows.

"Many online video revenue models are emerging, but the growth of an ad-revenue model for online video will be critical to the health of the industry," Mr. Verna says.

By 2011, 165 million US Internet users will have seen online video advertisements, according to eMarketer projections. That number will total 90% of the online video viewership in the US. Comparatively, in 2006, 88 million people — or 77% of US online video viewers — experienced Internet video ads.

"There is currently a debate among advertisers, Web publishers and consumers over the length of online video ads," Mr. Verna says. "But so far no consensus has emerged on an online equivalent to the 30-second standard that has prevailed on TV for decades."

If the relationship between online video content and online video advertising is key to the growth of the Internet video industry, the interconnectedness between TV and the Internet will also play a leading role in how the market for online video evolves.

"Rather than a wholesale shift in viewership from TV to the new media channels, both mediums will actually grow in the next several years," Mr. Verna says. "Internet video will entrench itself in the content mainstream, right alongside TV, although not in such pervasive numbers."

According to eMarketer projections, by 2011 there will be 200 million broadband Internet users. Of them, 91% — or 183 million — will watch online videos.

"Eventually, a number of devices will converge in some form of the long-promised 'digital home,'" Mr. Verna says. "But even in the foreseeable future, consumers will use currently available technologies to enjoy all manner of video content, from Hollywood blockbusters to homespun videos."

To get the whole picture, please read the new eMarketer report, Online Video: Making Content Pay, today.

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Marketing with video streaming.

IP Video U.S. Statistics