Without Enough Inventory And Targeting Online Video Advertising Will Remain Dead
Streaming Media East Program Done: Now Looking For Speakers
How Many iPads Need To Be Sold To Make It A Viable Platform For Content?
Conference Videos Now Online From Streaming Media West & OVP Summit
For content owners like Weather.com and others, examples like this highlight one of the many major problems with online video advertising. If a site like Weather.com that produces professional content, has a well known brand and has a large reach can't sell enough ad inventory, how can content owners ever expect to make any money online? Making matters worse, a site like Weather.com has a HUGE advantage over other sites in that they already know my zip code and could be delivering me ads that are tailored to my area. But that's not happening either.
While this is a problem that the online video space has been suffering from for years, why hasn't it gotten any better? Why isn't there more inventory and targeting taking place? What's the hold up? Every time I bring up this issue many who work in the online video ad platform space keep saying that they are already doing targeting or that their platforms support targeting, but clearly it's not taking place with content owners. I always ask for examples of sites that are doing this but don't get any. Makes you wonder if all these ad platforms can really deliver targeted, personalized ads.
While I do think ad platforms can determine what ads you have already seen and deliver you a different one, the fact this is not happening on Weather.com or CNN.com shows that even with the technology, the inventory is not there. For all the talk of how online video advertising is going to help content owners monetize their content, it's not happening on a major scale and won't until the user experience is much, much better.
Simply saying we need more inventory and better targeting to make online video advertising successful is not something people don't already know. I'm not making some profound statement that others have not though of. But in the past three years or so, I can't think of anything regarding on the online video advertising space that has gotten better. What's improved? Maybe the size of the ad window, but the quality of the ads is pretty poor, targeting is not there, the inventory is limited and the industry still has absolutely no video ad standards. I can't think of one aspect of the business that has improved the user experience in the past few years. Can you?
Yesterday I finished the advance program for the Streaming Media East show, which will take place May 11th-12th in NYC. We will have 110 speakers across more than 30 sessions over two days covering a wide range of business, technology and content subjects. I'm also excited that so many of today's leading bloggers have agreed to moderate and lead sessions at the show including Peter Kafka from All Things Digital, Rafat Ali from PaidContent.org, Peter Cervieri from ScribeMedia.org, Dan Frommer from The Business Insider and Andy Plesser from beet.tv along with others.
Now the crazy part of placing speakers begins and I have to start sorting through more than 800 speaking submissions. Right now, I'm looking to place as many end-users and content owners first. So take a look at the subjects listed below, download the entire advance program and contact me if any of your customers would be a fit for a session.
When Apple announced their new iPad last week, many said it was a big deal for content owners as it now gives them another platform to try and monetize their content on. But what I didn't see anyone talking about is how many iPads Apple needs to sell before the platform has a big enough install base to make a difference to content owners?
For developers that plan to use the same app for the iPhone and iPad, the number of iPads sold does not really matter. But what about all of the content owners who are going to write new apps specifically for the iPad and charge for them? How many iPads need to be in the market before they have a chance at actually making any money? This is an expensive device that consumers will have to be willing to drop between $500-$1000 on. This isn't the cost of a Kindle. And while there are plenty of Apple fanboys who will run out to get an iPad as soon as they can, anyone who thinks this device will have the reach the iPhone or iPod did is crazy.
So just how many need to be sold to be successful? This isn't a trick question, I'm just really interested to hear what other people think in terms of the number of units that need to be sold to make it an important device to content owners. So far, I've only seen one published prediction on the number of sales from Thomas Weisel who projects 4.1M iPads will be sold this year. Think that can happen? Is it enough? Would love to hear your comments on it.
All of the sessions and keynotes from the 2009 Streaming Media West and Online Video Platform shows have now been archived and are available online for free at www.streamingmedia.com/videos
If you have never been to that page before, you will be simply be asked to put in your name and email and will only have to do it one time. Anyone is welcome to re-purpose the videos on their own website or blog or syndicate in any manner they like. The only session that is not archived is the Xbox keynote which due to lightning conditions, may or may not be added.
Our thanks to Quality Tech who encoded all of the videos and to Brightcove for hosting them.
While many are already talking about CDN video pricing stabilizing in the New Year, so far, I don't see that stabilization taking place. Based on all of the data I saw last quarter, I expect pricing to continue to decline rapidly for the first half of this year. By the summer, pricing should become more stable and by the end of 2010, I expect that pricing on average will only decline about 25% for the year, compared to the 40% decline I saw on average in 2009. (note: you can always find my latest pricing post at www.cdnpricing.com - Previous Quarters: Q1 09, Q4 08, Q3 08, Q2 08, Q1 08.)
At the same time, while many content owners surveyed said they say traffic growth of about 35-40% in 2009, I expect that 2010 will mark the first time in two years that we will see the rate of traffic growth accelerate, but not by much. While we are only a month into the New Year, most of the major content owners I am speaking to think they can grow traffic by about 50% this year. While that's only a 10% rate of growth over last year, it's still growth over the prior year, which is something we didn't see at all in 2009.
As you take a look at the Q4 pricing numbers I've published for video delivery, there are some key points that one needs to keep in mind. For starters, CDNs tend to be a lot more aggressive with pricing in Q4 as the year comes to a close and they are trying to get as much business in the door as possible. In addition, the average high numbers look a lot lower than usual partly due to the fact that Akamai is now aggressively cutting pricing across a wide swath of their CDN customers. I expect that by the third quarter of this year they will have re-price around 75% of their CDN contracts, which you can read more about here.
Continue reading "Video CDN Pricing Declines Heavily In Q4, Other Pricing Trends Seen" »
Dan Rayburn: 917-523-4562 - danrayburn.com - e-mail
EVP, StreamingMedia.com, Principal Analyst, Frost & Sullivan
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