Monday, August 31, 2009

The Summer of Online Video

Online video reached another all-time high in July according to comScore with a total of 21.4 billion videos viewed during the month. I know what you're saying, another post in the echo chamber about the explosion of online video... and you're right, because that's what I talk about here on this blog and I think it's more than a year-over-year trend that we're seeing but a sea change. When 158 million U.S. Internet users -- or 80% of the nation's online population -- watched online video in the month July, I think it's fair to say that this is, "The Summer of Online Video".

comScore noted that TV viewers turned to the Internet for fresh content with shows on summer hiatus and Hulu reached all-time high with 457 million video views. While the average online video viewer watches short-form content, we're starting to see a shift to long-form content viewing as more choices become available. With the lackluster pick of summer blockbusters it's no wonder people are staying out of the movie theaters and going online for their entertainment.

Some of the views can also be attributed to unusual media events that became phenomena as comScore tracked in the June numbers:
"including the memorial service for Michael Jackson and the civil unrest in Iran. Such major events have been important for online video viewing in the past, with many users checking out news videos during the workday."
Other notable findings from July 2009 included:
  • The top video ad networks in terms of their actual delivered reach were: Tremor Video Network (20.1 percent viewer penetration), Brightroll Video Network (17.4 percent), and (14.4 percent).
  • 81.0 percent of the total U.S. Internet audience viewed online video.
  • The average online video viewer watched 500 minutes of video, or 8.3 hours.
  • 120.3 million viewers watched 8.9 billion videos on (74.1 videos per viewer).
  • 48.2 million viewers watched 518.6 million videos on (10.8 videos per viewer).
  • The average Hulu viewer watched 12.0 videos, totaling 1 hour and 13 minutes of videos per viewer.
  • The duration of the average online video was 3.7 minutes.
In a related report the Nielsen Company's July 2009 VideoCensus noted a 42% year-over-year growth in viewing time of unique users averaging about 3.5 hours with total video streams climbing 31.4% to 11.2 billion, and a 14.2% increase in unique viewers to 136 million.

Different companies, different numbers -- we see it all the time. But how are they actually tracking the views?

According to Nielsen,
"Online video viewing is tracked according to video player, which can be used on site or embedded elsewhere on the Web. For example, if a “Saturday Night Live” clip from is embedded on a personal blog, that video would be attributed to NBC because of the NBC video player. A unique viewer is anyone who viewed a full episode, part of an episode or a program clip during the month. A stream is a program segment. VideoCensus measurement does not include video advertising."
Also, as noted by the many posts on ReelSEO, video usage is up for marketers and based on new findings from Equation Research Christopher Rick stated that online video tops all but Facebook in social media marketing usage.

While many analysts say these recent estimates are still only 1% to 3% of the total video viewing experience, with traditional broadcast TV viewing still on top, it's clear we're in a very transformational time as we shift to a more social and video-centric society. We're able to maintain our presence online through mobile and Wi-Fi connections, broadcast live or upload videos, lifestreams and status updates from our mobile devices. An entire online video ecosystem has emerged over the last few years and I wouldn't be surprised to see "Video" on the cover of Time magazine as the "Person of the Year" ;-)

Updated: New 60's inspired image

Sunday, August 30, 2009

Coming Soon to Klessblog, CEO Conversations

It's been a busy summer which kept me running and offline frequently and probably the busiest I've been at my corporate day job in years. But I'm happy to report it's been quite an adventure. I've had the opportunity to meet many new people along the way, make new friends and interview CEOs, Co-founders, marketing directors, product managers and thought leaders who help shape the future of online video and social media. As I approach the two year mark of Larry Kless' Weblog, with close to 400 blog posts and counting, I want to acknowledge and thank everyone who took the time to reach out to me, contribute news and information, arrange conference calls, send me emails and press releases and most importantly help educate me on the value they bring to the online video space so that I can share those conversations with the readers of this blog.

I mentioned a few months ago,
"What I love about writing this blog is that I get to meet new people and learn all about their companies, the products and services they offer and their technology innovations that help shape the online video industry."
But with the daily demands of my professional and personal life it's been a challenge to publish many of the interviews I've conducted over the last few months in a timely manner. I find myself echoing the same words from that previous post to say, I have a number of blog posts I'm working on I wanted to take a moment to let you all know what's upcoming on this blog.

Coming in September: CEO Conversations
While this isn't a new feature, I'll be giving it some focus with a title much like Pete Wylie and Tim Street have done on their blogs when they interview online video leaders. Here's some of the people who I've had the pleasure of speaking with whom I will profile in the coming weeks.
Not to mention
Additional interviews and conversations I've had with other online video leaders and companies, that have yet to be published:
  • - talks about the upgraded OneSource 2.0 ad management platform
  • - CEO Sean Doherty discusses his RSS video site which launched last September '08
  • The Feedroom - Matt DeLoca, SVP of Sales discusses the rapid adoption they are seeing at the corporate level for online video advertising and communications and updates The Feedroom's web site and business focus
  • WonderHowTo - a conversation with CEO Stephen Chao about his how-to video site
There's a whole lot more that I'll be publishing on this blog. With the Online Video Platform Summit and Streaming Media West now just a few months away you can bet that I'll be promoting those events as well. I also want thank Eric Schumacher-Rasmussen, Dan Rayburn and Joel Unickow at and my good friend Mark Robertson, Founder of ReelSEO who have been great supporters and have given me the opportunity to extend my reach beyond this blog.

Thursday, August 27, 2009

There's Still Time to Nominate Your Favorite Online Video Platform, Product or Service in the 2009 Streaming Media Readers' Choice Awards

The deadline is fast approaching to vote for your favorite product or service in this year's Streaming Media's Readers' Choice Awards, the only awards program in our industry that lets end users decide what online video products and services they find the most valuable. Last year, more than 3,800 readers voted in the Streaming Media Readers' Choice Awards and with the growing online video market this year's awards program will be bigger and better, with even more categories. 

The nomination process is simple. Just go to and complete and submit the nomination form before August 31, 2009. Streaming Media's editorial team will evaluate all submissions to make sure they fit their categories, and final nominees are announced on September 7th when online voting opens. The top 3 finalists in each category will be announced in November, and the winners receive their Award at Streaming Media West in San Jose, November 17-18. 

The editorial staff of Streaming Media will evaluate all submissions to make sure they're proper fits for the categories, and the final nominees will be announced on September 7th. Winners of the awards will receive at at a special reception/party at this year's Streaming Media West show in San Jose, November 18th, which attendees of Streaming Media West and the Online Video Platform Summit are welcome to join. Don't miss the best Readers' Choice Awards rocking party following the award ceremony sponsored by Kaltura, with open bar and entertainment by video remixing legends Eclectic Method which you can see in the video below. 

video platform
video management
video solutions
free video player

Nominations can be made in the following categories:
  • Best Streaming Innovation 2009 - The first of two industry-wide categories, designed to acknowledge the product, technology, or service that most changed the streaming landscape in the past year.
  • Best Online Video Startup Company 2009 - Content 
  • Best Online Video Startup Company 2009 - Technology
  • Another industry-wide category, designed to highlight the new companies that made the biggest splash and is poised for long-term success -- one company focused on content and another focused on technology.
  • Encoding Software (Under $1,000) 
  • Encoding Software (Over $1,000)- It doesn't seem fair to pit enterprise-grade encoding solutions against single-workstation software, so in this year's awards we're breaking down encoding software into these two categories.
  • Enterprise Video Platform - Solutions that offer complete control over creating, publishing, managing, and distributing content within the Enterprise environment.
  • Hardware Encoder (HD)
  • Hardware Encoder (SD) - As with encoding software, it made sense to split this category into two this year, for hardware devices that capture and encode content in HD/SD and in SD only.
  • Live Video Streaming Platform - Platforms that allow users to easily stream live video over the web from a wide range of devices from mobile phones and webcams up through DV cameras.
  • Global CDN - Content delivery networks with truly global reach
  • Online Video Platform (Free)
  • Online Video Platform (Premium) - White-label or branded video publishing platforms, again separated into two subcategories: the free, consumer and prosumer-level platforms and the premium platforms used by SMB, enterprise, and entertainment organizations.
  • Portable Live Encoding Appliance - Hardware devices designed specifically for capturing, encoding, and outputting live video from the field and on-the-go.
  • Regional (North American) Delivery Network - Content Delivery Networks with a footprint that's confined to the U.S and Canada
  • Reporting and Analytics Solution - Solutions for delivering video viewership and/or network status reporting and analytics, whether standalone or as part of a larger offering
  • Search and Indexing Platform - Solutions that utilize metadata, speech/facial recognition, or other methods to help users easily find the video they're looking for
  • Server Hardware/Software - Solutions for delivering audio and video files to listeners and viewers, regardless of delivery protocol
  • Streaming Music Solution - Internet radio and other music streaming services
  • Transcoding SaaS - Cloud-based transcoding services
  • Video Advertising Network - Companies that help brands execute video campaigns via online publishers
  • Video Advertising Management Platform - Platforms that perform ad insertion and offer pre-built placement options and success tracking
  • Webcasting/Presentation Solution - Services or products that capture video and audio, combine with slides and images, and deliver to online viewers in an interactive environment, live and/or on demand.

Sunday, August 23, 2009

Web Video Pick of the Week, "Do You Wanna Date My Avatar"

You got to love it when a web series makes their own music video to not only promote their upcoming season but also to have some fun. The cast from the wildly popular independent web sitcom The Guild, created by web video heroine Felicia Day about about a group of online gamer, don their armor and bring sexy back with this web video gem that asks, Do You Wanna Date My Avatar? With a pulsing dance beat and seductive moves that are straight out of Britney or Beyonce video, Felicia and crew hit a home run with the geekiverse. Who wouldn't  wanted to hang with her in her MMO (Massively multiplayer online game)

With over 2.1 million views on YouTube with over 12,000 comments in less than a week it's prime example of viral marketing done right to promote Season 3 of The Guild that premieres exclusively on MSN Video, Xbox Live, and Zune on August 25th. The video was directed by Jed Whedon who also composed the music with lyrics by Felicia Day who was producer along with Christian Agypt. 

On her blog Felicia says,
"I don’t have time to do a proper blog post about it, but our video “Do You Wanna Date My Avatar” is going CRAZY around the internet! #1 Music Video on iTunes, #1 mp3 on Amazon?! Really? It’s you guys supporting us that’s doing it! When I get a chance I will write some thoughts about this whole crazy experience, but for now, enjoy!!"

The Guild was inspired by Felicia's love of World of Warcraft which she had been addicted to for two years. She dreamed up the idea and wrote the sitcom pilot that follows the lives of the Guild players both online and offline and pitched it to a web video audience rather than TV studio wonks. The rest is history which was actually made in the short span of two years through her collaboration with Jane Selle Morgan, Kim Evey, Sandeep Parikh, Jeff Lewis and many others she knew in the business. It launched in the late summer of 2007, and for the first season was financed solely by Paypal donations from loyal fans

The Guild went on to become a web video sensation and locked up exclusive distribution of Season 2 on Microsoft's triple platform and a sponsorship deal with Sprint. Earlier this year it received numerous honors at the 1st Annual Streamy Awards garnering  Best Comedy Web Series, Best Ensemble Cast in a Web Series, Best Female Actor in a Comedy Web Series (Felicia Day). 

Friday, August 21, 2009

Check Out My Post on ReelSEO, "Video and Social Marketing Reach a Groundswell"

This post is part of the coverage of the Search Engine Strategies San Jose Conference & Expo in San Jose. It appears in full on Reel SEO - The Online Video Marketing Guide.

One of the highlights of the day-long track on Social Media & Video Strategies held in conjunction with in San Jose, was a presentation by industry leader Nate Elliott, Principal Analyst, Forrester Research on the Groundswell, a book based on analysis by Forrester Research on how they look at social marketing. All too often marketers launch a Facebook, Twitter or YouTube account without a social media strategy which according to Forrester is a backwards approach.

We had an opportunity to speak with Nate following his presentation and he described several practical, data-based strategies that companies can use to build their social strategy. According to Nate you need to look at consumer engagement and ask what they want. Social media has changed the way consumers participate in group action and if companies don’t heed the Groundswell they could be dealing with a public relations disaster, like the viral video hit, United Breaks Guitars.

He said:
“We actually encourage marketers to use the POST method. Focus first on the People they are trying to reach, second on their Objectives and finally look at what Strategies they want to pursue and what Technologies are most appropriate for achieving those strategies.”

Forrester’s Social Technographics:

Forrester’s Social Technographics® is a tool that classifies social media consumers into six overlapping levels of participation according to how they use technology. Based on their 2008 survey data Forrester was able to see how participation varies among different groups of consumers, globally. They’ve made available a consumer tool and a B2B tool that lets you rate the social technographics profile of your customers. (more)

Monday, August 17, 2009

Introducing Streaming Media TV

Today, launched their new portal for original video content, Streaming Media TV, featuring the first episodes of two new shows: Bandwidth Bastards, a weekly collection of commentary and news analysis from Nico McLane and A.M. Arno, and Jan Ozer's Peer Review, which will analyze how top video sites are doing in production categories such as background, lighting and exposure, audio, editing, and encoding. Since it was founded in 1998, Streaming Media has been dedicated to providing education and information to industry professionals and corporations in the utilization of digital media technology through its three core business areas:, exhibitions and conferences, and research and publications. For over 10 years, has become the premier online destination for professionals seeking industry news, information, articles, directories and services. The site features thousands of original articles, hundreds of hours of audio/video content (comprised mainly of conference archives and audio podcasts), breaking news, research reports, industry directory, and case studies that showcase the latest real-world streaming media implementations.

But over the years many have wondered -- with all this wealth of information about online video and streaming -- where's the original video programing? Well, the answer to that is Streaming Media TV.

I spoke with Streaming Media Publisher Joel Unickow about the launch of Streaming Media TV and he has this to say:
"We've actually been publishing videos on the site for over 10 years now, but the most recent sessions from our shows like SMEast and SMWest are found on the Audio/Video Archive section of the site, since they are most timely and relevant to today. Our writers have been expressing great interest in running their own webisode shows on our site for some time, and they are doing a great job with their content, both in print and now in video. Eric, our editor, has been the real spearhead for the initiative. We see StreamingMediaTV as way of adding a new dimension of coverage, of the space itself.

We've been barked at for a while to get this going, I mean, let's face it, this is, so expect to see more video coverage including how-to tutorials, reviews, interviews and opinion video. We hope that our viewers will send in their comments and suggestions so we can provide the best programming that suits their needs - we are listening."

Sunday, August 16, 2009

Search Engine Strategies San Jose 2009, and ClickZ’s Video and Social Media Strategies

One of the highlights of my week was spending the day with my good friend Mark Robertson, Founder and Publisher of ReelSEO, at the Search Engine Strategies San Jose Conference & Expo in San Jose on Tuesday, August 11th. ReelSEO was a media sponsor and I was part of Mark's ReelSEO press team and helped cover the events of that day.

Search Engine Strategies San Jose 2009 took place from August 10-14 and covered topics from local search to universal search to social media, SEM techniques designed for both beginners and veterans to search. Mark spoke on the SES panel session, "The Next Wave for Online Video," which focused on optimizing online video for search and other strategies. The session was moderated by Andrew Goodman, SES Advisory Board & Principal, Page Zero Media and other panelists included Gregory Markel, Founder/President, Infuse Creative, LLC, Erin Bouchier, Business Lead, Google / YouTube Advertising and David Burch, Director of Marketing, TubeMogul. Mike Sachoff of WebProNews has a nice write up on the session, Tips of Online Video Optimization, in which he summarized the message conveyed by all the panelists to consider all angles. This includes keywords and tags and all the elements surrounding the video and apply the same strategy for ranking high on Google to YouTube which is now the second largest search engine in terms of search queries, according to data presented by Mark.

A few of the highlights we caught were the keynote by Clay Shirky, Author, Here Comes Everybody which explores how organizations and industries are being upended by open networks, collaboration, and user appropriation of content production and dissemination. Shirky is an adjunct professor at New York University in the graduate interactive telecommunications program, where he teaches courses on the interrelationships of social and technological networks, particularly how they shape culture and vice versa.

In this video he recorded with Byron Gordon of SEO-PR, Shirky provides a great afterword to an excellent keynote which he discussed the change in user behavior as a result of the internet. Bringing up HSBC's penalty free checking account fiasco, in which targeted college students, and when the students went on summer vacation, reneged on the deal. Students angered by the unfulfilled promise, used Facebook to protest the changes, as a result of which HSBC reinstated the deal. Shirky also touches upon the Josh Groban non-profit group using social media to further their cause, and the importance of citizen journalism in a Web 2.0 world, improving Journalism even if major newspapers shrink. He dazzled the crowd when he revealed he was wearing The Mountain Men's Three Wolf Moon Short Sleeve Tee, the viral hit and best-seller on

Other highlights included sessions from the day-long track held in conjunction with SES on Social Media & Video Strategies, which was put on by the teams at ClickZ, YouTube & Google. Industry leader Nate Elliott, Principal Analyst, Forrester Research set the stage with a presentation on Groundswell, based on analysis by Forrester Research Social Media & Video. A few other sessions we caught were What Works: Best Practices / Case Studies for Online Video, which was moderated by Dan Greene, Head of TV Ads, Online Sales & Operations, Google and featured Greg Jarboe, President & Co-Founder, SEO-PR, Chris Sams, Internet Marketing Specialist, ZAGG Inc, Lisa Abourezk, VP, Marketing, ooVoo and Shattuck Groome, Co-owner and Managing Director, Gotham Direct who shared best practices for incorporating video and social media into their marketing efforts.

One of the not-to-miss presentations of the day was by
Michael Fischer, Senior Vice President of Marketing at Coldwell Banker, who presented Coldwell Banker's successful viral marketing campaigns. He showed how their YouTube Channel energized their network by showcasing what video can do for them through geo-targeting and local search.

Look for
more coverage on these sessions along with several on camera interviews that Mark and I conducted that day with Nate Elliott of Forrester, David Burch of TubeMogul and Kristin Kovner of YouTube which will be featured here and on ReelSEO in the coming weeks.

Related ReelSEO posts:

Saturday, August 15, 2009

Not So fast Google, On2 Shareholders Protest "Attempted Theft" of Company

In a follow up to the story that On2 Technologies Inc., the video compression software company that is being acquired by Google for a $106.5 million stock deal, the On2 board and CEO is under fire from shareholders who "are livid about the attempted theft of the company at $0.60 per share" and believe that On2 is worth more than 60 cents a share.

"While many of us in the industry have been trying to figure out what exactly Google will do with On2 after the acquisition, we may be getting ahead of ourselves. Some On2 investors have filed separate lawsuits in New York and Delaware looking to block the acquisition, claiming that On2's board essentially agreed not to shop the company around and look for a higher price. Many of On2's investors are already banding together to stop the deal and have launched a website at to make their opinions heard."
This play by the shareholders is their call to action to get fair value for their company shares. Many feel it's worth 10 times the offer by Google. Their web site points out On2 actually made money this quarter also traded at $.65 several weeks ago. In fact, On2 traded for as much as $3.99 in 2007 when it was rumored that Adobe might acquire it and long before the VP8 product was developed.

According to VOTE4On2,
"On2 management has consistently stated over recent quarters that income was ramping up and expenses were falling into line. Indeed, 2nd quarter results confirmed that and there is every indication and belief that 3rd and 4th quarter results will be even better as income from recently signed license agreements in China and elsewhere kick in. This company is about to rocket.

On2 is on the cusp of exponential growth in the most explosive sector of the video universe. Their VP8 product is the game changer in video transmission and is just now being introduced. On2’s codecs have recently become the de facto standard in China, the largest market on the planet. Additionally, On2 codecs are ubiquitous in Flash, Java and elsewhere. On2 has 10 US patents with 14 pending, Hantro has 8 patents with 12 pending - and On2 owns VP8, a superior technology to H.264! On2 codecs are also now showing up in mobile video on the web and smart phones - the real future of video. There is a lot more to this company that isn't immediately apparent"
The web site also collects both company news including On2's most recent earning calls and other news, commentary, and blog coverage. Shareholders spoke out on the earnings call with many questioning why the company was being sold when it's making a profit. Interim CEO of On2, Matt Frost stated that they were unable to comment on the specifics of the merger since the deal has been filed with the SEC and they are constrained under securities reqgualtions. He mainly apologized to the many shareholders for not being able to answer their questions and asked for their patience. Several shareholders said that they'd see him court.

Dan Rayburn suggested that the shareholders are not going to take this lightly,
"If there is one thing I have learned about many On2 shareholders in the past it's that they are very opinionated, do a good job of talking to one another and sharing info, are very aggressive in trying to get their message across and always seem to be up for a fight."

Tuesday, August 11, 2009

Ooyala Gets a New Boss, Jay Fulcher Appointed As CEO

While it's no secret that Ooyala, the Silicon Valley-based online video platform provider, has been searching for the best and brightest talent for its fast growing company -- today they have announced the appointment of Jay Fulcher as President & Chief Executive Officer. Fulcher will join Ooyala and become a member of the Board of Directors, immediately. Former CEO and Co-Founder Bismarck Lepe, who has led the company since its inception in early 2007, has been appointed President of Product Strategy, reporting to Fulcher, and will focus primarily on developing and delivering new products for both the publishing platform and monetization industry.

Last month Techcrunch reported that Ooyala was in the process of an executive search which was not motivated by their investor, Sierra Ventures, but by Bismarck Lepe himself as he didn't necessarily think he was the guy to take the company to the next level. Since he and fellow Co-founders Sean Knapp and brother Belsasar Lepe retain control of the company it's important to make sure that they're doing what's best for shareholders and not managing the company with our egos.

Lepe explained,
"I've been searching for the right guy that's going to help us scale our business for about 6 months now, and after talking to about 25 people who were all very excited about joining and taking the helm as the CEO of the company, we found Jay and invite him and welcome him to the Ooyala family. Jay brings the necessary experience, track record and passion to lead our company. We are extremely pleased to have attracted a CEO of Jay’s caliber to Ooyala. He will have an immediate impact on our aggressive plans for growth.”

Jay Fulcher is a long-time enterprise software industry executive who has held a variety of senior executive roles. Most recently, Fulcher served as President & CEO of Agile Software, where he led the sale of Agile to Oracle in late 2007. Prior to Agile, Fulcher spent five years at PeopleSoft, where he led the transformation of PeopleSoft’s $1+ billion global services organization after being President of its $400 million Products Division. Prior to PeopleSoft, Fulcher held senior executive positions at Red Pepper Software and SAP. He was attracted to Ooyala for its focus on developing "game-changing technology" as he put it and the impact IP-based video will have on the future.

Fulcher said,
“IP-based video is now a powerful reality and with that comes opportunities to better target advertising and deliver the content consumers want on their terms. Ooyala has been able to grow faster than any other Online Video Platform company because of its focus on technology, customer success and personalization. I am excited by the prospect of taking that early success and leveraging it to build a large, innovative and profitable business."

Fulcher is inheriting a very talented, young team that can benefit from experienced leadership given how fierce the competition is in the saturated online video platform space. This change of leadership is part of the evolution of small companies that become very long lasting fixtures in the Valley much like what Larry Page and Sergey Brin did when they brought in Eric Schmidt to lead Google.

In my two-part interview with Bismarck Lepe last month, he described that Ooyala's business was growing at a rapid pace and he estimated that the current market for online video platforms is roughly of 300,000 customers who are people who are willing to pay for an online video platform. Ooyala's partner portfolio includes over 500 enterprise and media companies including Warner Brothers, Wenner Media, Fremantle, Armani, Sybase and Electronic Arts.

Lepe says that we've hit a turning point in online video where companies are pushing more professional content online and there are also additional advertising and monetization options to actually create value for content creators. Ooyala has seen CPMs grow from $2 to well over $10 which helps subsidize higher quality content. With the all the reports that online video viewership continues to rise Ooyala is getting ready for the next big wave.


Thursday, August 6, 2009

Google To Acquire On2 Technologies for $106.5M, How Disruptive Is It Really?

The big news yesterday was that Google announced they would acquire On2 Technologies for an all-stock deal valued at $106.5M. On2 is the developer of the high quality VP series of Truemotion video codecs, of which VP6 replaced the Sorenson Spark video codec for Adobe Flash player 8 and above and is the core of On2's video encoding software suite of Flix Standard, Pro, Exporter, Live, Engine and Directshow SDK. The VP6 is a proprietary codec and has been a direct competitor to H.264, the dominant compression standard for high-quality web video, IPTV and Blu-Ray disc also known as H.264/AVC/MPEG-4 Part 10. On2 also developed the earlier VP3 codec of which the open source codec Ogg Theora is derived. On2 customers include Adobe, Skype, Nokia, Infineon, Sun Microsystems, Mediatek, Sony, Brightcove, and Move Networks.

In a letter to on2 Flix customers, Frank Galligan, Vice President of Engineering said that they are thrilled to become part of the Google family and gave the rationale for why Google is acquiring On2. He said:
"Google has indicated to us that they are continually looking to improve video quality and delivery on the web, and that our video technologies will allow them to do even more with their products and initiatives. They have indicated that they are interested in all parts of our video technology. With Google Video, Google Talk and YouTube, among others, they have a substantial interest in developing tools and technology that will better support more high quality video on the Internet. Google has indicated that they believe that our team and technology will help Google make higher quality video available online."
While it's too early to discuss specific product plans until the deal closes, Mr. Galligan said that all existing agreements will remain in effect under their existing terms and that they expect that Google would honor its obligations under existing contracts.

So how "disruptive" will this be for the online video industry?

There's been a lot of speculation that Google is purchasing On2 to take advantage of the advanced V7 and V8 codecs for either open source the codecs and make them license-free. Such a move would create serious competition to the other major video compression technologies of H.264, Flash and Silverlight all of which are proprietary codecs. Could Google be looking to to avoid the licensing fees for H.264? Will Google open source On2's technology to disrupt HTML5? Is Google looking to bake the high quality video compression technology into YouTube to speed up videos and lower bandwidth costs?

This all sounds like a big deal that's going to give Google the edge to disrupt the fabric of the online video landscape and "win the online video format war" and with the acquisition Google acquires technology that it can embed within its Android and Chrome OS platforms. This may cause companies like Adobe, Microsoft and Apple to take a financial hit and force them to support whatever new video codec that Google brings to market. Also, with the situation regarding browser-based decoding for tag in HTML5 at a stalemate and undefined, Google could help change the tide by open sourcing On2 VP technology.

According to Dan Rayburn, who wrote in a two-part post that debunks many of the theories posed in the blogosphere, it's really not a big deal.

"While one could assume that Google will do something with VP8 and Chrome tying into the new HTML 5 standard, is that the reason to spend $100M to acquire a codec? I don't think so. While many want to automatically assume Google will always be successful in whatever they do, simply because they are Google, they have never done anything well outside of search and advertising, as far as generating revenue goes. If they want to challenge H.264, they'll lose. If they simply acquired On2 for their own use in YouTube and Chrome, ok, could work. But it won't have any major impact on the industry."
UPDATE 8/9/09: Check out Tim Siglin's new blog WORKFLOWED, which he launched following a discussion on Dan's post, Google's Acquisition of On2 Not a Big Deal, Here's Why. Tim says: 
"Dan listed off a series of reasons why Google may not have been interested in purchasing On2. A fascinating read, and a bit of a different take from the news article I'd written early this morning, which outlined the deal. In between writing mine and reading Dan's I had spent some time thinking through what Google might be up to, so I posted the following as a comment on Dan's blog: Google Purchases On2 - Additional Thoughts"
"I would pay special attention to what Google does with On2 on Android, because there is an opportunity for it to outshine rivals such as RIM and Apple. Just look at On2’s mobile video arsenal: It owns technologies for embedded video for mobile platforms (Hantro) and On2 TrueMobile System, a mobile video system designed to send video across the networks — including 2.5G, Edge, 3G and 4G networks — using On2’s VP7 technology."

"... my angle on this acquisition is one that no other commentator I've yet seen has taken: following in the footsteps of the Chrome web browser and the Android and Chrome O/S operating systems, Google's pending direct control over On2 is the company's latest move to wrest control of the Web from companies such as Adobe, Apple, Microsoft and Mozilla (specifically, the latter's under-siege Firefox web browser)
Also, with the current legal issues around Skype, Google could use On2's video technology could enhance its video communication suite of tools (Voice, Talk, Wave) to compete with Skype. With the open source movement gaining speed and online video growing at explosive rates it will interesting to see how disruptive this latest acquisition by Google will be for the web video. For now we can only speculate and since the deal won't close until the fourth quarter the effect of this merger won't be felt for months but the ripples within the online video landscape are already starting to appear.


Wednesday, August 5, 2009

eMarketer Report Says Online Video Coming Into Focus, 188 Million US Viewers by 2013

In a new report analyzing the upward trajectory of online video consumption, eMarketer projects that there will be 144 million online video viewers in the US this year, growing to 188 million viewers in 2013. The report, Video Content: A Premium Opportunity, points out that audience levels and stream counts are rising, the demographic range of the viewing population is expanding and the content mix is evolving from short, snack-type clips to long-form content such as TV shows and feature films. As the medium matures so do the monetization models but for consumers it's unlikely that they would be willing to ever pay for the bulk of it. It's more likely that in the future Hulu and YouTube would move to a pay-per-view or download model for premium content.

Paul Verna, eMarketer senior analyst and author of the report said,
“Most video inventory is funded through ad support. This includes user-generated content, news clips, humor videos, TV shows and special events such as the Olympics. On the other side of the coin, feature films and mainstream sports content continue to be monetized through subscriptions and download fees.”
Mr. Verna noted that the bulk of the current video inventory is discoverable through social networks, blogs, microblogs, e-mail and other social platforms which TubeMogul confirmed earlier this year. That creates the perfect storm for a viral video hit and opens up opportunities for content distributors and marketers. Video quality is getting better too he added saying that,
“Gone are the days when the space was dominated by short user-generated clips aimed primarily at a collegiate crowd. Now, video offerings cater to all age groups and interests, from teenage sports buffs to news junkies to retirees who enjoy classic movies.”
Online video has come a long way from its early days and the rise of YouTube and other web portals, free and premium destinations fueled that growth. Knowledge Networks found that from 2006 to 2008, the percentages of US Internet users across every age group who accessed full-length TV shows grew by significant margins.

Gavin O'Malley from Mediapost added that,
"A number of trends will keep online video on an aggressive growth trajectory in the coming years. These include mobile distribution through smartphones and next-generation networks; HD streaming and other quality enhancements; better integration among PCs, digital cable boxes and TVs; and interactivity features that work better online than on TV."
For those following the online video industry it should come as no surprise that the growth is exploding, as it was just last month that Cisco announced the results of their Visual Networking Index (VNI) Forecast and Methodology, 2008-2013 which states that by 2013 video will be 90 percent of consumer IP traffic and 64 percent of mobile. More evidence came earlier in the year when The Nielsen Company reported that viewing of video on television, Internet and mobile devices - the Three Screens - continues to increase and has reached new heights. John Burbank of the Nielsen Company highlights the findings of their A2/M2 Three Screen Report in this video.

Chris Albrecht though suggested that as studios and cable operators make their moves to put their premium content behind subscription walls,
"It’s possible that could actually reduce consumption. Between Time Warner’s TV Everywhere, Comcast OnDemand Online, Netflix, and a supposed Disney subscription service, premium content could choke off its audience before it’s fully realized."
That's unlikely though to stop the continued growth since the millions of online viewers consume video for free through blogs, search engines, social networks and video destination sites.


Sunday, August 2, 2009

Delve Networks and Akamai Partner to Deliver Cloud-based Online Video Publishing

It was more than a year ago that Seattle, Washington-based Delve Networks changed its name from Pluggd and business focus from podcasting tools to online video publishing tools for content publishers looking to create their own branded video experience. Like many others in the saturated online video platform market Delve offers an intuitive end-to-end solution to manage, deliver, publish and measure viewership. Earlier this month launched a self-service option for their video publishing platform. Delve’s video platform includes patented semantic video technology which extracts information from within the video to provide enhanced search, meta-data tagging, and indexing capabilities.

On Friday, Delve Networks announced a strategic relationship with Akamai, the leading Content Delivery Network (CDN) that Delve says is aimed at challenging Brightcove as the leader in the online video platform space, "to give publishers a better alternative than Brightcove’s." The collaboration between Delve and Akamai offers Delve's customers a complete video management solution to deliver HD-quality video on Akamai’s global video delivery network which supports both Adobe’s dynamic streaming and Microsoft’s Silverlight Smooth Streaming technologies. Financial details of the collaboration were not disclosed.

In an interview with Beet.TV, Delve Networks VP of Product Management Edgardo Nazario says that there is great synergy between the two companies and that they "will work together on projects and also pitch each other's customers."

Delve Networks CEO Alex Castro had this to say about the collaboration with Akamai:
"Our joint effort will help us reach many more customers than we could reach alone. Increasingly we are looking for leading partners who can help us provide the best in video management and solutions for our customers. We can think of no one better than Akamai to work with.”

Akamai has similar partnerships with KickApps, VMIX, Multicast, Onstream Media, VBrick, KIT Digital and Ooyala and while this deal is not much different from existing relationships with the other companies and Tim Napoleon, Chief Strategist for Digital Media at Akamai said:
"A fast, efficient media distribution workflow based on industry standards is critical to any successful online business. Akamai's mission is to support innovation and leadership in this space and Delve clearly offers an impactful solution. Providing unique and innovative capabilities, such as a cloud-based architecture and search inside, Delve's video platform is not only technologically advanced, but also easy to use."
In an interview with Pete Wylie this past week Alex Castro described Delve's performance this year and his vision for the future of the company in growth in 2009. "We've tripled our customer base since beginning of the year and launched our self-service product, we've signed some important big name customers and we're waiting on timing to talk about those partnerships," said Castro. Delve, which raised a $1.6 million venture round in May and snce launching 10 months ago, Delve Networks has signed up over 70 customers including Standard & Poors, 1800Flowers, the Kansas City Chiefs, and many others.

While this all sounds like good news it actually hasn't been a good week for Akamai. The comoany has come under scrutiny by Wall Street just this week following a disappointing earnings call by missing analyst expectations and saw shares drop 15% quarter due to a risky strategy of sacrificing revenue growth to hold on to customers. Dan Rayburn also pointed out that despite their pricing problems, Akamai is still not doing enough to grow their CDN business.

Within the online video ecosystem this deal could be viewed as another example of the CDN becoming a commodity. With the rise of online video platforms over the last few years the direct line consumers have to CDNs has been blurred as OVPs offer scalable plans, extensible modules and content delivery solutions. For more on this topic see the LinkedIn discussion: Is control going from CDNs to OVPs ?

Delve Networks is also a platinum sponsor of the Online Video Platform Summit and will be showcasing its platform and technology at the event. For more information on Delve Networks and a free trial, visit

About Akamai

Akamai(R) provides market-leading managed services for powering rich media, dynamic transactions, and enterprise applications online. Having pioneered the content delivery market one decade ago, Akamai's services have been adopted by the world's most recognized brands across diverse industries. The alternative to centralized Web infrastructure, Akamai's global network of tens of thousands of distributed servers provides the scale, reliability, insight and performance for businesses to succeed online. Akamai has transformed the Internet into a more viable place to inform, entertain, advertise, interact, and collaborate. To experience The Akamai Difference, visit

About Delve Networks

Founded in 2006, Seattle-based Delve Networks makes it possible for organizations of any size across any industry to realize the potential of online video. Delve's advanced, easy-to-use and highly customizable online video platform offers all the tools necessary for publishing video online including video hosting, encoding, content delivery, content management, semantic search, metrics, advertising and syndication. By leveraging the power of cloud computing, Delve gives its customers the ability to quickly adapt as demand for content increases allowing for greater overall scalability, efficiency and reliability. Delve is backed by DFJ Frontier, Intel Capital and Labrador Ventures.

Updated: 8/3/09