Online video heats up

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YouTube, recently the belle of the ball at the Digital Hollywood conference, has just raised $8 million from Sequoia Capital in a Series B round. YouTube is currently the leader of the pack in providing online video hosting, but it still doesn’t have an evident business model. Apparently it will start putting advertising into its site – which it currently doesn’t do – by mid-year, but the costs of hosting video means this revenue stream has to be significant. Far more likely it will look to cut deals with major entertainment companies to be an outlet for video content, in turn tied in with related revenue streams. However YouTube is far from alone in the space, with Jumpcut launched yesterday, and yet to be released service Motionbox declared the best video service by TechCrunch, even before its launch. Both of these services allow video editing, with Jumpcut in particular having some nifty video mashup and remix features, while YouTube is just an upload site. Bubble, bubble, toil, and maybe trouble on the other end of this boomlet, but it has a very good run to go first.

Internet video becomes true new media

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We all know that television will migrate to distribution over the Internet. Broadcast and cable will certainly co-exist with the Internet as distribution channels for moving image content for the foreseeable future, however broadband access and the availability of capital for new media ventures mean that the Internet is already becoming a viable alternative for television viewers. Some traditional free-to-air television channels will at some point simultaneously broadcast their programs over the Internet. However what is more interesting is how video programs over the Internet take advantage of the channel and the media consumption patterns of the likely audience. Case in point is Heavy.com, which targets young males with a showcase of funny, sexy, and crude short videos, set in an extremely advertising-intensive frame. It looks different from just about anything else out there, with few words, and plenty of user-driven interaction, movement, sound, and color. The site is openly modelled on video games. An a very interesting recent article in the New York Times that discusses some of the dynamics of advertising to this demographic, says that the site had 5.5 million visitors in February, while the company estimates it will take in $20 million in revenue this year. Advertisers like not just the audience, but the depth of exposure they get from the in-your-face advertisements. Around half of the videos are amateur productions submitted by the audience, though selected by the site editors. Heavy.com is now ramping up its own video production capabilities. Of course, this is just one facet of the Internet video world, with other players like Youtube, Videobomb, OurMedia, and others providing a whole new domain of user generated and filtered content. Heavy.com is showing the way in actually doing something new which has not done before, rather than simply distributing traditional content in new ways or taking text and image models into video. There will be a lot more exciting and new in this space in the very near future.

The state of news media

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A great report just out by the Project for Excellence in Journalism on The State of the News Media 2006, focusing on the US news industry. It provides detailed analysis across all news media, including newspapers, online, TV, radio, alternative and more. The new major emerging trends they picked out this year are:

* The new paradox of journalism is more outlets covering fewer stories.

* The species of newspaper that may be most threatened is the big-city metro paper that came to dominate in the latter part of the 20th century.

* At many media companies, though not all, the decades-long battle at the top between idealists and accountants is now over.

* That said, traditional media do appear to be moving toward technological innovation – finally.

* The new challenge to the old media, the aggregators, are also playing with limited time.

* The central economic question in journalism continues to be how long it will take online journalism to become a major economic engine, and if will ever be as big as print or television.

Underlying these trends is the game being played between traditional media and new media organizations, with a large convergent space in the middle, and possibly the beginnings of hardball tactics as we have seen in the music industry over the last years.

A conversation with my newsagent

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I’ve just had a very interesting conversation with my local newsagent, sparked off when I remarked on the launch of a new celebrity magazine, Famous, which he says has sold out its first issue. To touch on just a few of the most interesting things we chatted about… He says that newsagencies are a great business, and his shop is going the best it has in the nine years he’s been running it. He doesn’t believe that the Internet is taking sales away from newspapers, despite all the reports – he thinks newspapers have been selling steady all the way. However magazines sales are getting better all the time. This reminded me of remarks made last week by Bill Emmott on leaving The Economist after 13 years as editor. The magazine’s sales have more than doubled under his tenure to over one million globally. Emmott remarked that the demand for the kind of analysis that The Economist produces becomes even more important in a world of digital overload. People may prefer to get news from the Internet rather than newspapers, but they also want a review and big-picture analysis of what’s important, just as they have for decades with the major newsweeklies. Incidentally, the newsagent reports that celebrity press is the best sector of all in magazines, hardly a surprise, though it is interesting to consider what drives this in contemporary society. He also said that he was looking into selling his agency, and that standard prices are 2.3-2.7 times pretax earnings. Not bad for the buyer if it’s a solid and growing business. Would you want to buy a newsagency? An interesting question to consider. We won’t become fully digital in that much of a hurry.

The future of blogging

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The latest issue of BusinessWeek has an interesting interview with Mena Trott of Six Apart, the company that provides the software on which this blog is based, on the future of the blog. Some of the interesting issues raised include how blogging has brought a more personal tone to mainstream journalism, images, audio, and video being integrated into blogs, and introducing filters for readers and authors to select views into the blog. On another note, Six Apart is rumored to have recently raised $12 million in a highly bid C-round fund raising, with investors said to include Intel, giving a pre-money valuation of the company of around $100 million. Blogging is hot. Robert Scoble of Microsoft comments: “Well done Mena! We all forget just how bad things were for geeks five years ago.” Indeed, the massive front-page success of blogging is one of the centerpieces of the technology revival. I often find myself boggling at how transformational blogging and related technologies really are. We’ve only just scratched the surface here. Tradtional boundaries between content creators and consumers will dissolve. Assessment of the authority and integrity of any content will entirely change. Blogging is strongly accelerating the already powerful shift towards transparency, which impacts every domain of society and business. Email may begin to play a quite different role in our communication than it has over the last years. There are many other implications that are just unfolding. Very exciting times ahead.

Positive word of mouth

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Lexus has given iPod Nanos to some customers who had delayed delivery of their cars, and has got big coverage not just in the Club Lexus Forums, but also in blogs and even on Digg. These days, companies can get massive benefit, as well as problems, from how customers spread how they feel by word of mouth, including of course blogs. Incidentally, the Word of Mouth Marketing Association had their inaugural conference last month, and got plenty of traditional media coverage, as well as word of mouth. It’s the buzz in the marketing world!

Linking the conversational threads

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What many people don’t appreciate about blogging is that its power comes from how blogs are interlinked, not the blogs on their won. Individual blogs can be interesting. However it is the linking and commenting on other bloggers’ posts and thoughts that creates a single “blogosphere”. This unitary space of all blogs has powerful emergent properties, not least the ability to make the most interesting and valuable information and ideas float to the surface and become easily visible. The single most important way of creating threads between blogs is simply linking to other blogs – or traditional media – and adding thoughts and opinions. The next critical feature is comments. A blog that doesn’t allow comments hardly merits the name. Comments from others allow readers to see opinions and segues on the original post. However this starts to split the thread of discussions. That is why the trackback feature of blogging is so important. Trackbacks allow people to post their comments on other blogs’ posts on their own blog, and then place a link on the original blog. This allows readers to know that there is a relevant comment posted on another blog, and to go and read it. The primary problem with this is that you need your own blog in order to keep your comments on other blogs in the one place.

The recent beta launch of coComment seeks to address this issue, by allowing people to keep the comments they’ve written in the one place, make these visible in the one place without having their own blog (which in effect creates a blog, albeit exclusively of comments on others’ blogs), and track how comments evolve on a particular post or topic. Stowe Boyd recently proposed a “conversational index”, which rates blogs by the ratio of posts to comments. The reality is that a large proportion of activity in the blogosphere is in the comments. Now frequent commenters who don’t have their own blogs can participate fully, opening the door for a significant expansion in the scope of the emerging global conversation. Interestingly, coComment has been funded by the Swiss telco Swisscom, which happens to be one of the first telcos to launch proximity dating, some years ago now. There’s a very strong buzz about coComment. Not everyone is convinced, however the context is that blogger extraordinaire Robert Scoble was shown the site while visiting Switzerland, blogged about it, and the coComment folk are now desperately trying to keep up with the buzz, even though it’s well before planned release. Word spreads very fast in the blogosphere, when people are interested.

Collaborative filtering supports meritocratic Internet TV

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Following on from my recent story on collaborative filtering for music, it’s worth taking a look at Videobomb (Thanks for the link Steve Rubel!). This enables people to post links to online videos. If enough people vote for the video, it appears on the site’s front page, so users can immediately find the most popular videos. This voting structure is extremely similar to the technology news site Digg, which has rapidly become one of the most popular technology websites around. Videobomb needs to get more users before it reaches critical mass, however its intent is to help provide a platform for Internet TV. On Current TV, the producers choose what to screen from all of the public submissions (see my earlier comments on this). Videobomb’s approach enables the audience to choose what they view. In the words of the website, they want “to create an independent, creative, engaging, and meritocratic TV system for millions of people around the world”. Some way to go towards this objective yet, but I don’t think it will be too long before we do have a system that meets this description.

Mass media is “nearly obsolete” for some buyers

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Market research company Polk has found that first-time car buyers barely use traditional media in assessing potential options, leading to a description of traditional media as “nearly obsolete” for this sector. Internet is the primary information source for 35% of these buyers, four times that for television, and eight times that for magazines. Sixty-five percent of vehicle buyers did so without any influence from family or friends, making their media information sources all the more important. As first-time car buyers are in the 18-30 age bracket, the bias to online media is not surprising. However the superior information search and multiple perspectives available online mean older buyers are increasingly dependent on online information for their high-value purchases. One implication is that specialist buyer magazines will find it very hard going as advertisers shift to where the buyers spend their time. Another is that classifieds, for cars and other high-value items, will continue their shift to online. Print classifieds will soon be considered archaic. The issue will become who owns the classifieds – traditional media players, or new players? This will be the subject of some of the research on the future of media my organization will be doing over the next months – more details soon.

Localized blog search

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A new Australia-specific blog search engine called gnoos will be launched in February in pre-beta form, by Ben Barren’s company Feedcorp. This is interesting and relevant because many blog conversations are often about local issues, not least politics. Some blog search engines, such as Bloghub.com and LSBlogs.com, offer the ability to search within countries, but have very poor coverage, so are of little use. Similar problems apply to country-specific engines such as the Brazilian blogs.com.br.

An article in the Sydney Morning Herald on gnoos compared the initiative to other Australian Internet search engines, such as Panoptic, which have struggled, as most people prefer to use the global search engines such as Google, with which they are familiar, have very broad coverage, and which offer some degree of local search capabilities anyway. However this is not an appropriate comparison. Blogs are interlinked, they are not usually meaningful on their own. Blogs discuss issues of interest to a particular community, which are often local in scope.

Currently, the deeply intertwined discussions that happen in the blogosphere tend to revert to a US-centric perspective, as that is where the dominant pool of bloggers reside. In a way it’s easier for those who don’t speak English, as their community can be easily defined. Certainly the conversations of the blogging-mad Brazilians get entwined with those of the Portuguese, and those of the French with the rest of the francophone community, however there is a reasonably defined community just by virtue of language. In the case of English, the de-facto global language, conversations tend to get drawn back to the US. However Australians, Britons, and English-speaking Indians, among others, are often more interested in engaging in discussions on their own local politics or issues rather than being drawn back to the US domain. Right now we are in a situation in which US conversations are dominating globally, simply due to the size of the US blogging community and the globally interlinked nature of blogs. An excellent country-specific blog search engine can facilitate the creation of interlinked conversations among bloggers of that nation. I hope that gnoos fulfils its promise, and helps the Australian blogging community to develop a greater identity and ability to engage in discussion on local issues. That will be a big move forward in making blogging conversations relevant to local communities. Politics and consumer issues are largely local, and unless there are ways to tap into those blogging conversations, they will have little impact.