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Is Web Video a Threat to TV?
The Internet has made it possible for anyone with a video camera to
become a filmmaker or YouTube star. But can independent creators make a
living off Web video? And will this army of amateurs pose a threat to
traditional broadcasters and studios?
Several video-sharing sites,
including Revver and Metacafe, are trying to translate Web fame into
dollars by sharing advertising revenue with contributors. Even YouTube
has adopted a similar program. Traditional broadcasters, meanwhile, are
taking steps to capture online viewers (and ad dollars). NBC, for
example, is adding social networking features to its flagship site and
will debut "Coastal Dreams," a Web-only soap opera, in October.
Wall Street Journal Online invited Sab Kanaujia, vice president for
digital product strategy at NBC Universal, to discuss the future of TV
on the Web with Steven Starr, co-founder and chairman of Revver. Their
exchange, carried out over email, is below.
Sab Kanaujia is vice president for product strategy and development with NBC Universal's Digital Media group. He is responsible for initiatives across NBC Universal's sites, including NBC.com3 and BravoTV.com4. Before joining NBC in August 2006, Mr. Kanaujia spent two years as an executive at AOL, where he worked on acquisitions and developed the product strategy for AOL Video. Previously, he worked at a private-equity firm and as a consultant at KPMG.
Steven Starr is co-founder and chairman of Revver5 and served as the video start-up's CEO from 2005 until June 2007. Before starting Revver, Mr. Starr co-founded Uprizer, a peer-to-peer networking firm, and was CEO of AntEye, a user-generated video site. Previously, he was a writer and producer of independent films and co-creator of MTV's "The State." He also spent nearly a dozen years at the William Morris Agency where his clients included Tim Robbins and Larry David.
Sab Kanaujia begins:
Can independent creators make a living with Web video? I don't think
they can in the short term. Current business models online are not
attractive enough to make a living or leave your other day job. The
CPMs [cost per one thousand ad impressions] paid by online distributors
for independent content are not very high compared with those for
professionally produced, long-form content, so it requires a lot of
views to translate into a decent amount of money. Low CPMs also
indicate the appetite of advertisers at this point for content from
independent creators. There are of course some exceptions
(LonelyGirl15, etc.) where we have seen good, engaging content that has
driven a lot of traffic.
Steven Starr responds: Well, it all
depends how you define independent creators. Old school independent
creators, used to Hollywood economics, should stay home. But successful
independent online creators are seeing CPM and [cost-per-click] returns
that can exceed $10,000 per month.
The promise of an online
creator economy is right around the corner, one that supports an
entirely new form of creativity quite distinct and separate from
traditional TV creation. This is happening in the short-term, with Web
video creators not controlled by the linear programming demands of
traditional TV. The Web video toolkit is far more interactive; response
videos, social networking, mashup technology and the like are changing
the parameters of content creation. Web video as a nascent art form,
one that promises significant and sustainable revenue as it develops,
is close at hand.
Mr. Kanaujia: I agree with the promise of
online platform for both content creators (non-linear, timeliness,
etc.) and for users (interactivity, more features, etc). But I think
business models are still evolving. In the short-term, I think the Web
will continue to provide a great vehicle for independent creators to
get discovered (zero barriers to entry). And when they do get
discovered, many may want to join traditional media — or not.
are two real-life examples: Rocketboom — Amanda Congdon established
herself online. She leveraged her online popularity to get an offer
from ABC, which she accepted. Now, she's using that opportunity to
marry the digital and traditional worlds by anchoring in addition to
doing video blogs on ABC.com. I was recently at Om Malik's Pier
Screenings in San Francisco, where one of the creators of LonelyGirl15
spoke. They have thus far not joined a traditional media company amid
several such offers that their agency was able to secure for them. They
want to maintain total creative control and flexibility with their
shows. Also, their storytelling style requires quick turnaround and
interactivity — which does not yet fit the traditional TV platform,
with its many other considerations (advance scheduling, advertisers,
etc.). Though they've not seen a financial windfall by going alone,
they're still sticking to their original plan. These examples provide
different paths taken by two successful online independent creators.
Starr: Using the Web as a discovery platform for old media trolling for
talent is 1999 all over again; why take these new media creators and
force them into old media formats? If the future of TV on the Web is
continuous streaming, everywhere-accessible and ubiquitous, isn't a far
more exciting outcome the emergence of an entirely new art form?
today's Hollywood, over 90% of [Writers Guild of America] and
[Directors Guild of America] members are not even close to making a
living at their chosen craft. In the high-stakes game of traditional
TV, the prospect for an Amanda Congdon or LonelyGirl15 achieving the
financial windfall you refer to are incredibly remote, at best. Yet
online, where Rocketboom and LonelyGirl15 can take incredible risks
with format and genre, can grow their own audience at a fraction of
network costs, can enjoy free syndication, hosting, audience-building
and ad services at their disposal, an absolute cornucopia of
And yes, the business models are evolving,
but it's happening quickly and well. At Revver, we're seeing a 4x and
7x jump in creator revenue just by adding pre-roll [ads] as an option
to our Revver creators. It may be the wild west, but the opportunities
are historic; there has never been a better time to be a creator, not
in the history of media.
I've got a question for you, Sab: How does NBC Universal see its role as a supporter of this new art form?
Kanaujia: I'm not arguing that traditional media should either force
new media creators into old media formats or restrict in any way the
tremendous opportunities provided by digital platforms for content
creation and distribution. I was just highlighting what is happening
today as we evolve towards realizing the full potential of the new
NBCU whole-heartedly supports the new art form. In fact,
one of the primary goals of NBCU's Digital Media group is to explore
how we can proactively embrace new digital platforms. We've created a
Digital Studio that is extending NBCU's history of quality programming
into the digital age by producing original programming and interactive
experiences that engage consumers across a variety of topics and genres.
also exploring how we can creatively marry originally produced online
content with our on-air shows. I think democratization of content
creation and distribution provided by technology innovation on digital
platforms and changing user behaviors would in the long run be a
win-win for all stakeholders.
Mr. Starr: NBCU has been quite
proactive in extending its brand online; the digital studio sounds
promising. But I really don't envy what big media's facing. Consumers
are their own programmers; control over the media experience has been
New media is social, all about connection and inclusion,
and the challenge to monetize those connections is starting to be met.
Andrew Keen's "The Cult of the Amateur" disputes the disruptive
history-in-the-making prospect of all this, and blames new media for a
"loss in quality." So maybe it started with cats swinging from
chandeliers and frat boy video, but it's evolved in less than a year to
budding auteurs like Goodnight Burbank6, Happy Slip7, Studio88 and
LoadingReadyRun9, all building audiences, all operating at the
forefront of new media. No doubt it's early days, but a year or so from
now we may see world-class creativity emerge, and Mr. Keen's dismissal
seems shortsighted at best.
The fact is, while new media creators
keep bursting out of nowhere, old media has yet to figure out how to
truly engage this unique audience. Repurposing TV and film content is
not a long-term solution. Social media demands a different expertise.
We're in a period akin to the transition from silent to talkies, and
it's going to leave a lot of traditional creators and content suppliers
Even more disruptive, social media rejects the cult of
the velvet-roped celebrity, demanding far more fan-creator interaction
than ever before. This drives the attention of a connection-expecting
audience into the hands of the independent creator, not the entity that
controls their channel, and empowers creators to control the advertiser
relationship themselves. Again, a heady time to be making media, to be
building an audience.
Mr. Kanaujia says: All these are examples
of Web TV done right. In the long-run, I believe Web TV will co-exist
with the traditional media. Forecasts claiming that the new media will
swallow traditional TV are grossly overblown. Today, almost half of the
total media consumption in the U.S. is on TV — 47% of 68
hours/week/user (Source: Veronis-Suhler 2006). Rest is split between
radio, recorded music, print, Internet, mobile, etc. Future trends also
point to the dominance of TV (48% of users' media time in 2010).
advertisers, the lean-back user experience allowing deep engagement
with the long-form content on the TV is undoubtedly the best
opportunity to develop brand awareness. Having said that, traditional
media would still need to adapt to the growing reality of the new
media. Over the past 80+ years, traditional media firms have
successfully gone thru many transitions in the industry (from radio to
broadcast TV to color TV), and have emerged stronger each time. No
reason why they can't succeed the current transformation from
traditional to what I call "integrated media," that combines digital
platforms to traditional ones.
Talking about integrated media, I
think ultimately Web TV will make its way into the living room as well
(it has already started; e.g., YouTube/Apple TV, AOL's deal with Sony
for their IP connected Bravia TVs). But for Web TV to succeed, it has
to leverage the Internet not as a platform, but as a medium that is
non-linear, social and interactive. Web content creators will not
succeed if they develop their content by copying what has historically
been done for the TV. They have to leverage the above three fundamental
advantages provided by the Internet. Compelling, storytelling skills
will always be critical — no matter what the screen is
(Web/mobile/TV). Advertisers will naturally follow if the execution is
Mr. Starr concludes: I agree in almost every regard.
Traditional TV absolutely will adjust and survive, just as there's
still a market for books a century after movies were introduced, after
TV, after the Web. But I think we're not far off from having most of
the advertising dollars spent predominantly on the Web — and around
that corner we'll see most of the fortunes made from storytelling come
from Web-based media. There will always be exceptions — J.K. Rowling
will make over a billion dollars from an old-fashioned book series —
but my point is that, in the storytelling and visual arts, the future
is moving quickly towards Web-based media. It's just too efficient in
gathering a motivated mob for the smart money to go elsewhere.
produced in the creative diaspora already engage repeat audiences that,
per episode, number in the millions. A new breed of storytellers are
inventing new ways to narrate, new formats, new genres. At the same
time, a new breed of audiences are finding new ways to interact, to
participate, to engage with these storytellers. It's all happening
outside of traditional media auspices, and that's what makes this new
art form so unpredictable and so thrilling.
itself is what drove me to start Revver. I'm absolutely convinced
online video is where the creative center of the next decade, and
possibly the next quarter century, will reside.