Parks Associates Blog

Tuesday, September 23, 2008

More roll-ups in the online video space

One of the significant trends we reported for the online video space in our Internet Video: Direct-to-Consumer Services: Second Edition report was the consolidation that is occuring with companies in the online video content and ad delivery space. Since one of the key strategies employed in the past couple of years of online video delivery has been to widely syndicate content across multiple Websites, this has led to the emergence of a class of companies implementing what we call "content and ad management" services. There are any number of services that these companies offer, but they revolve around a few key areas:
  • Content management: Deploying content with rules associated with exclusivities, windows, etc. (content producers may only want content up for a limited time as a teaser to their primetime television offerings, for example);
  • Content workflow: The ingestion of content and ads and transcoding to ensure a seamless viewing experience;
  • Delivery: working with content delivery networks to ensure that video does not experience problems associated with limited bandwidth and to avoid as much as possible network congestion on broadband service provider-owned networks;
  • Scaling: Implementing unique solutions to allow for more and higher-quality video (what Move Networks does with their Move Adaptive Stream solution is a good example of a technique used to manage high-quality video traffic);
  • Content rules management: These companies take responsibility for ensuring that content gets delivered with the appropriate DRM rules (if necessary) and also for geographic restrictions (content that can only be sent to U.S. viewers cannot be sent to overseas servers, for example)
  • Globalization requirements: These can involve inserting appropriate subtitles for certain audiences or transcoding content to fit with international audio and video standards;
  • Media players: Develop a player from which video can be viewed; and
  • Analytics and reporting: The real-time reporting of viewer analytics is becoming a really critical area in the delivery of video and ad content. With analytics, a content and ad management company can not only be reporting the results of video traffic to customers, but can dynamically adjust content, traffic patterns, and ads as viewer habits and tastes change quickly.

In our report, we profiled a number of the content and ad management companies, including some of the "biggies" such as Anystream, Brightcove, Entriq, ExtendMedia, Maven Networks (now owned by Yahoo!) Move Networks, PermissionTV, and Thomson Technicolor (they made an interesting announcement with premium online video content pioneer CinemaNow to create a video content and ad management platform back in April). These companies continue to add companies to their portfolios that allow them to not only scale their syndication capabilities, but help content producers, publishers, and distributors better monetize the video that is sent over the Internet.

To this end, I read with interest yesterday's news that Anystream is acquiring Voxant, which syndicates online video content across thousands of sites and collects advertising revenue for the content producers. Voxant's main business - it appears - is helping to distribute the video assets of hundreds of news organizations - including The Associated Press, The New York Times, Reuters, and others - while helping to manage the ad assets to monetize the content. It would appear, therefore, that Anystream has added a critical piece to its content management platform by including the direct connection to many different ad networks via Voxant. My colleague Anton Denissov indicates that this sort of roll-up is quite similar to how Move Networks stepped up and basically aggregated the content delivery space. Instead of content producers working directly with the CDNs and other content delivery companies, Move came in and basically created a CDN exchange, where it works with multiple content delivery companies and looks to find the best price for its publishing partners. I'd expect that we may see some more consolidation between online video ad networks and these content and ad management companies.

And at the same time that this consolidation is occuring, it strikes me that the world of online video content and ad delivery is still dynamic enough that there is no such thing as "exclusive dating." Take the Associated Press as an example. Although they use Voxant for syndication and ad monetization of their content, there is an announcement today from thePlatform that they have been selected by the AP to deploy a more enhanced version of its Online Video Network, which distributes video content to more than 2,000 newspaper, broadcast and other media Web sites throughout the U.S.

It certainly appears that the market has plenty of opportunities for companies to develop and deliver more robust content and ad delivery and management solutions. I'm betting that the reporting and analytics area will be a really dynamic space to watch in the next few years, as measuring eyeballs and time spent on video sites - and then dynamically reacting to those metrics with appropriate content and ad insertion - becomes a really critical component of this space.


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