What GOVA’s Gavone Means to Online Video and the New Networks

There’s a new Global Online Video Association led by Paul Kontonis. What does it means to YouTube and the networks like Collective, Maker, Machinima, Fullscreen and others?

He’s the new GOVA Gavone. The leader of the online video association. The guy who’s scream silences a room.

AdWeek reports that Paul Kontonis, former online video producer and agency guy, is heading the new Global Online Video Association (GOVA). Kontonis has been a leader in the online video space from its inception, including such roles as founder of “For Your Imagination,” VP at Digitas’ Third Act, and chairman of International Academy of Web Television.

online, video, gavone, GOVA, association
Paul Kontonis is the gavone who heads GOVA, the new online-video trade association.

By day, Kontonis heads sales and strategy for one of the top “multichannel networks” (MCNs) called Collective Digital Studio. GOVA is made up of nine of the top MCNs (also called online-video studios and “new networks”). These include Collective, Maker Studios, Fullscreen, Big Frame, BroadbandTV, DECA, Discovery’s Revision3, Magnet Media and MiTu Networks. Machinima is conspicuously absent, but unlikely for long (it’s quite common for the biggest in an industry to initially think they don’t need an association).

GOVA represents 9 of the top 10 online-video studios, or MCNs
GOVA represents 9 of the top 10 online-video studios, or MCNs

Caveat: I know Kontonis and like him (which is why I am allowed to call him a gavone as a term of respect). He was even in one of my videos where I thought I turned invisible. But I haven’t spoken to him in a while and know nothing directly about his GOVA appointment. So this is all my speculation based on watching this space mature. And I wrote a book, so shut up.

What’s ahead, and what does GOVA mean to the networks and the maturing landscape of online video?

  • Susan Wojcicki, the leader of YouTube.
    Susan Wojcicki, leader of YouTube, is focused on mainstream players. GOVA may help keep her attention on smaller studios.

    Bargaining Power with YouTube. The online-video networks, or “multichannel networks,” will now have a collective voice they’ll need more in coming years. That’s in part because YouTube, the virtual monopoly on distribution, is increasingly turning its attention to more mainstream studios and traditional networks. As YouTube grows, it will be increasingly difficult for individual studios to command the attention they’ve received in the past. How do we know that? History is the best predictor: Initially top YouTube stars could garner attention from Google and resolve issues. But eventually YouTube creators needed the power of a network. The networks don’t know it yet, but in years ahead they’ll need strength in greater numbers than they have today.

  • Bumpy Road, Herding Cats. Associations can be tricky, as participants theoretically want a collective voice, but they’re also competing against each other for precious advertising dollars. Kontonis has shown he’s got the diplomacy and persuasion to herd these network cats.
  • GOVA may help keep emerging studios independent, which is good for "amateurs."
    GOVA may help keep emerging studios independent, which is good for “amateurs.”

    Could Slow Down Acquisitions. In the coming years, we’d expect to see more of these online-video networks get acquired by larger players. Discovery ate Revision3. Google ate Next New Networks.  GOVA may give some of these players more time to play independently, if they wish, before the eventual consolidation of traditional and “multichannel” networks in the 2015-2020 period.  That doesn’t mean the MCNs will be less attractive to acquiring parties, it just means they won’t be as desperate to be sold. That’s a very good thing for individual creators of these networks. (When they do get acquired, they’ll try to convince you it’s a good thing…  but as a loyal WVFF reader you’ll know better).

  • GOVA can help negotiate with emerging video-playing technologies
    GOVA can help negotiate with emerging video-playing technologies

    Developing Emerging Channels to Reduce Dependency on YouTube. As we look beyond YouTube, the major stakeholders are technology companies, advertisers, and content creators. Years ago, an individual studio could negotiate their video content onto new platforms — like we saw Revision3 do with Roku and College Humor do with TiVo. But that will be more difficult as stakes increase and traditional networks start seeing more meaningful “TV dollars” moving to emerging channels. This coordinated approach through GOVA will increase the studio’s voice with new platforms. Watch for GOVA serving a role to keep them “out in front” of new platforms — from Roku to Netflix and Hulu to Amazon. And more importantly, the emerging video distribution platforms we don’t yet see coming. Maybe one day even AppleTV!

  • Other Boring But Important Crap. GOVA can also help with legislation/regulation, advertising formats, metric standardization, growth of the online-video, and thought leadership. Depending on the issue, they will likely partner and challenge other players like IAB, ComScore, traditional media associations, and marketing agencies.
  • Four More Years. That’s how long I see this lasting. By 2018, we’d expect GOVA to roll into the Internet Advertising BureauIRTS or some other association. But no other association has the knowledge of or focus on this medium.
  • Bottom Line. Creators and studios need GOVA whether they know it or not. Otherwise the technology platforms and advertisers will set the agenda.
maker, deco, big frame, deca, magnet, fullscreen, collective, web, studios, networks, online, youtube
9 out of the top 10 “multichannel networks” are included in the new association.

Discovery And Revision3: Peanut Butter ‘n Chocolate

I’m at an industry event yesterday in NYC and I run into the affable Jim Louderback, CEO of Revision3. He follows this little blog occasionally, and we’ve spoken at numerous industry events. (Jim is also cool, geeky and provocative… important attributes of “emerging media mavens”).

For no particular reason, I asked him when someone was going to acquire his studio. He smiles and says, “acquire or invest?” Moments later a Google guy tipped me off to the TechCrunch rumor earlier this week that Discovery was acquiring Revision3. Psychic powers? Apparently.

Well chocolate and peanut butter merge, friends.

Revision3 discovery

All Things Digital’s Peter Kafka just reported that Discovery Communications acquired Revision3. Says Kafka:

Discovery isn’t disclosing a purchase price, but multiple sources familiar with the transaction tell me the cable guys will pay around $30 million for the start-up. The company ended up raising about $10 million during its six-year lifespan, with the last chunk coming from a group of investors that included Mark Cuban.

Revision3 will continue operating out of its San Francisco headquarters, and make its own web shows. Obviously Discovery will want to figure out ways to leverage Revision3’s experience in online-video audience development and distribution. 

Revision3 now has Discovery’s dollars, distribution and clout with advertisers, and Discovery gets to learn how to produce video more efficiently. “We produce content on a $500,000 to $750,000 an hour scale,” said Discovery’s digital leader JB Perrette. “Producing something at a tenth of that cost means it has to be very different.”

For those reasons, I like this combination better than peanut butter and chocolate. Revision3 was one of the first online-video properties, and Discovery Channel was a cable network that began to figure out online video earlier than others (see my “Shark” blog post about Discovery from 2009). Now it gets interesting.

Attic Rats, Preroll Ads & Show Your CPM

I was invited to join a web studio yesterday that provides a fixed CPM or cost per 1,000 views. That means the network promises you’ll earn no more and no less per video view… many of my friends have made that choice. It forced me to examine my current CPM and consider how that might change. Is it in my interest to accept a “floor/ceiling” amount? Or am I optimistic it will grow, and eager to benefit from that?

So today let’s look at attic rats, income for online-video ads, and contrast the sorry current state with what industry analysts predict.

Jim Louderback, CEO of Revision3, recently posted an intriguing article/rant about CPM prices… it’s titled “How Rats in the Attic Made Me Realize What’s Wrong With Prerolls.” Let’s examine the highlights to get a sense about why brands and online agencies have artificially depressed online-video advertising (despite shifts from print/TV to this medium).

Attic Rat

Problem (according to Louderback):

Unfortunately, even though those two video ad experiences are as different as rats and wine (KN note: Louderback was inspired having received junk mail for rat extermination and wine), they were probably priced at similar CPMs. That’s because the online video ad market – particularly the pre-roll market — hasn’t progressed nearly as far as print. Those were two markedly different experiences, with wildly different levels of engagement. However, for many buyers, agencies and brands an on-line video pre-roll is valued the same wherever it runs, regardless of viewer intent, ad placement and playback environment. It’s as if Trump and “Take Air USA” paid exactly the same for those two print placements – even though their impact is worlds apart.

Solution (according to Louderback):

If you’re a video ad buyer, understand the value differences between in-banner impressions and engaged in-stream video ads. Focus your energy on the latter, and you’ll get far better results than if you lump the two together. Even though engaged, in-stream video ads will be more expensive, they are still a great bargain – especially if when you target demographic or content affinity along with the in-stream purchase.

Now let’s pull a “you show me yours I’ll show you mine” to see what poor targeting has done to the online-video economy. 

Here’s a question for those brave enough to admit in comments below (feel free to use an anonymous name). What’s your YouTube CPM (income per 1000 impressions)? In other words, how much do you make per 1,000 views? It’s easy to compute: simply take your earnings in a given month, divided by the total number of views you get per month (divided by 1,000).

  • Example: you earned $200 last month. Your videos were viewed 100,000 times. So you divide $200 by (100,000/1,000). You get $200 divided by 100 equals $2.00 CPM.
  • Since YouTube keeps about a half, that would mean the company is fetching about $4 CPM… which is horrendously low if prerolls were used.
  • Show us your CPM?
Good news: eMarketer puts online-video advertising growth at more than 43% in the next year and 35% the next year. As marketers become more targeted and sophisticated, we should easily see a CPM lift of 20-30%.

Can Google Sell Online Video Ads?

There’s been a lively debate recently among online-video enthusiasts about Google/YouTube’s capacity to sell display advertising. Sales people need different skill sets selling paid-search (automated, measurable, bid-based) versus display advertising (which is less measurable and more like selling television or print). To understand the distinction, see Google’s video; this is something we’ve been exploring at WillVideoForFood since Google bought YouTube in 2007. While Google has deep relationships with top companies and industries, it has only recently put emphasis behind non-search advertising.

YouTube’s display team (a few dozen) is rather small, and most YouTube ads are sold via Google Adwords not the dedicated team. While the display team sometimes lands some comprehensive ad buys with advertising agencies and brands, most monetization on YouTube is marginalized. The CPMs (cost per thousand) are so disappointing to some creators and online-video studios that some (from Next New Network and Revision3 to TheStation) have begun to sell their own inventory, or partner with ad networks that can attract better monetization for their views. Increasingly YouTube has provided creators and intermediaries tools to sell their inventory directly.

That said, there was some encouraging news from Jonathon Rosenberg, Google’s SVP for product management. According to this eWeek piece titled “Google YouTube, Android Drive $3.5B in Ads.”

Google’s display ad business… operating at an annualized run-rate of $2.5 billion. That’s counting YouTube ads, and all non-text ads running on Google’s network and DoubleClick networks, Jonathan Rosenberg, Google’s senior vice president of product management, said on the Q3 earnings call. “You guys always ask me (referring to analysts)… where’s your next multi-billion dollar business after search,” Rosenberg said. “There’s your answer.”

AskANinja is Back with a (neck) TWIST

Where’s AskANinja been? Depressed and eating pie, but far, far more. His delightful return song tells it all… and celebrates the hiatus with pomp and circumcision. He’s back now (thank NewTeeVee for the heads up), and with quite a twist and bang. Watch him shoot up the YouTube’s most-subscribed list like WheezyWaiter on steroids. Discover why this duo (show creators Nichols and Sarine) was the meme of 2006, and will show that even memes can pull Madonnas (reinvention).

As you enjoy this song recapping his 10-month hiatus, you can’t help but think “please kill Alex, please kill Alex.”

And you won’t be disappointed. Go subscribe. He kills Zaboo (Sandeep Parikh) from The Guild in this episode, featuring a most salacious music video with Felicia Day and Parikh powning “real life.” (The Guild producer Kim Evey > her husband Mediocrefims Greg Benson)

I can only hope Sxephil or Shaycarl are next to have their necks twisted. ]

“YouTube seems to be the platform right now that not only has social currency of an immense amount of viewers, but is also finally a place where an independent middle-class creator like [Ask a Ninja] can really monetize,” Nichols told NewTeeVee. “And you can also take that audience and that somewhat stable income and apply it to merchandising and touring and other good stuff.”

NewTeeVee Tackles YouTube

In a YouTube binge, NewTeeVee writer Liz Shannon Miller is rounding up some major online-video news:

Now what else can Liz cover for YouTube week? Hmmmm… how about a YouTuber getting pulled over by the NJ po-po for videotaping a Geek Squad van? And (in a moment of slight embellishment) got a black eye a week later.

Creative & Sponsor Trump Peanut Butter & Chocolate

I love it when a certain artist, video creator, or web series finds THE sponsor. Not a sponsor, but the ideal one. The kind of sponsor that you’d think would be stalking the entertainer, but sadly probably doesn’t know they exist. There are matches made in heaven: iJustine or Happyslip and Mac, Rhett & Link and any CPG brand, MysteryGuitarMan and a cool electronic device, SxePhil and Tequila, LisaNova and Stayfrees, ShayCarl and Twinkies.

To my surprise, while catching up with Revision3’s FilmRiot via TiVo, I heard Ryan Connolly (host) announce B&H as a sponsor. Yes it’s peanut butter meets chocolate, and I can’t imagine how they scored it. I don’t think of B&H as the type of marketing organization that would be so savvy.

Anyone serious about video, audio, production or schweet home entertainment is probably well aware of B&H. I think I’m an affiliate, and I think I’ve made nothing. But what the store lacks in marketing acumen it makes up for in an insane inventory of well price stuff, informed people, and excellent prices. That said, it’s easy to forget about them and go to what’s “top of mind” (like Amazon or BestBuy). The store is 50% of heaven for me, but missing the pools of white chocolate, dancing midgets and a few other things I’d like not to mention.

Electronic deals and discounts from Revision3 FilmRiot
FilmRiot, a quirky, informative, well cut show... now sponsored by B&H, which is to video creators what virgins are to terrorists. Only we video creators actually get the equipment, and the terrorists just get the promise of virgins but burned weiners instead.

I always thought Netflix was getting the deal of its life with FilmRiot. I wonder if Netflix dropped, which would be enough to make me drop- maybe Louderback will spill the beans if I get him drunk enough. BTW Louderback (because I think you actually do read this blog) I just received a friggin’ awesome ethernet-via-electrical socket device on his reco and it rawks my previously stalled webTV rig). Next time I open my Roku I’m going to switch from Netflix to Revision3 shows just to pout. [5/12/2010 7:45 am Louderback says Netflix didn’t drop it’s rotating].

Anyway I think there’s an even better FilmRiot ROI for B&H — which wastes not a penny on promoting the show. It’s better than paid search, because it’s reaching the exact people who will/do buy there. Paid search churns money on people that will shop on B&H but buy locally. Yet B&H is unlikely see the direct benefit, just like Netflix will never know that I returned as a customer mostly because of FilmRiot and I’m its friggin’ dream customer (never quite watching/ordering enough movies to cost them much, but always paying my bill).

Check out Film Riot’s Technical Deal Recommendations and find out some killer electronics you can buy me for my birthday, which just arrived 3 minutes ago. Hey- I’m spending my birthday with TiVo and a laptop, and a wife and family asleep. Stupid nap today. What could I do? I had a pain procedure. I was sleepy.

You’re a Digital Native, But Are You Acting Like One?

You’re probably a digital native if you read this. Tim Street interviewed Revision3’s Brad Murphy, who leads business development/sales. He uses the term “digital native” to refer to the audience his shows reach. Street includes a video of the interview (for those who prefer the hipper form of video to the timeless form of written expression).

Digital natives, writes Street, are “people who don’t watch regular television, are looking for content on-demand – whether it’s text based content, video content or communicating through social media to find that content. It’s an audience that hyper-connected.”

Indeed I’m among the folks who almost entirely switched their television diet for online material, although over the past year I’ve returned to TV for some of my favorite comedy and dramas: “Modern Family” (a must-watch, and as wonderfully written and acted as “The Office”), Lost, Fringe, V, that blackout show, and a few others.

For those of us digital natives who also dabble in time-shifted television (AppleTV, Verizon On-Demand, Roku, Netflix), there’s also another alternative I’m surprised isn’t catching on. Why aren’t we all using an old PC with HDMI (digital) connection to our television sets? Until we start seeing some formalized solution to leverage that ethernet plug in the back of the giant monitors we call “HD television sets,” I’d think that would be a natural solution, and one we natives would demand!

Why DON’T people use an old PC and a wireless keyboard so they can roam the web without the Mac-like “walled garden” approach? Two theories:

  1. I asked Revision3’s Jim Louderback about that on Tuesday, and he believes it’s because the solution Roku and other players offer is more user friendly, even if somewhat controlled. I suppose that explains the conspicuous lack of a $200 device that allows free browser-led experience right from the television set with the convenience of a keyboard instead of a remote.
  2. Another techno-nerd friend explains that the cost of making a machine (fast processor, web connectivity, HDMI connection and wireless keyboard) would be somewhat higher than the market would bear for such a device… and maybe there’s not the pent up demand for such a “lean forward” WHILE “leaning back” tool.

In the mean time, we digital natives do want to consume our “new establishment” (new studio, shorter format webisodes) in the higher quality and convenience of a giant television set. So once again, for the 3rd year in a row, I’ll predict a solution arriving this fall. It might be via a device (a modernized AppleTV or iPad-initiated device, a Roku/TiVo thing, or a television or Blueray DVD player that plays nicely with web content). Otherwise we hardcore natives will have to keep furnishing our own, to give us the full access that our devices limit.

Common, people. What if I want to check YouTube without the limits these devices impose? And Hulu won’t soon be kind to newer solutions (just look at what they did to Boxee). So do we wait until the large media and electronic manufacturers figure it out, or just build our own?

Proving Social-Media Articles Don’t Have to Suck

No, all social-media articles don’t have to suck.

MediaPost’s Kelly Samardak takes us into a speakeasy during a social-media Mental Prohibition in this coverage of “Digital Cocktails: Keys to Social Media Success.” The piece, part business and human interest, chronicles the event — hosted at the NYC studios of ForYourImagination (where you can pass the social-media “dutchie on the left hand side“).

It’s a cool and quirky narrative exploring the social behavior of those advancing the NYC social media ‘n digital media advertainment scene, while these well-intentioned expatriates try to make enough money for this month’s rent, a new book, and an $11.50 pack of Merits (not necessarily in that order).

Maybe I’m charmed by the article because I’ve had a bong snap of the venue’s mojo, and can almost smell the couch at FYI studio as I read.  Samardak refers to it as “funky…. soft, coffee-house-like, velvety furniture bordered the usual white chairs used for panel viewing.” Now can you see why I get offended at a list of “The New Establishment” (Revision3, NextNewNetwork, Mondo, etc) that fails to include FYI?

ForYourImagination's studios, captured during a less cool event

You haven’t whiffed the inner belly of the online-video-social-media-digital-branded-entertainment advertising coup d’éta until you’ve been “shhhh’d” by Paul Kontonis (professional squealer and one of the most huggable people in emerging media). Can you blame him? You were gabbing too loudly with YouTube nerd stars while he was trying to introduce his virtual family members to some… new video hosting streaming adver-creative case study thing. “Hey, Radio Shack… we’re learning here.”

Parenthetically, have you not had the pleasure of sipping Kontinis’ invisible juice? That video’s up to a not-too-shabby 600K views, Paul. Will “Businessman Snow Fail” top Invisible? We doubt either of our YouTube Miller’s Bests will impress the martini web-series production man. He indulged me with his cameo despite visible befuddles, reverberated by qualms of co-unwitting-cast member Daisy Whitney… the Ginger to Samardak’s Mary Anne. Just keep moving, kids.

Feel your heart rate lower as you sink into Samardak’s recount of the crowd chuckling to pictures from “This Is Why You’re Fat (TIWYF).” And you’ve got to love this byte: “Kontonis is a moderator to benchmark… rather than asking a question, listening to each panelist, responding with “great,”  and then moving on, he talked with them, sometimes even challenging them to answer questions better, as if saying “if I were in the audience I wouldn’t accept that — go further.”

Samardak pokes Carrot Creative’s Katy Kelly, noting that the crowd giggled when Katy accidentally called TIWYF, “this is why I think you’re fat.” And Katy’s quote, (“you get what you pay for,”) quipped Samardak, put her in the “minor vs major league quoting strategy with clients.” snap oh no you dint.

Just when I was thinking 12 e-mail newsletters from MediaPost might warrant an opt-out surrender, I’m rescued by Samardak’s bid-ness poetry (check out the “Sneeze on the Salad Bar” piece).

Have I met her? I think so. I don’t know. It could have been Shira Lazar wearing a sombrero. You perky brunette journalists start to all look alike anymore.

Old Media On “Death March,” And YouTube is “Draconian”

We are highly amused by thoughts from former Disney CEO (Michael Eisner) at the recent NATPE event (see TubeFilter for more). Eisner is now CEO of The Torante Company, and its digital studio is called Vuguru. Very web 2.0 branding.

He speaks about traditional media’s “death march,” and says YouTube’s revenue share “draconian.” But he also poured $250K into a web series, Booth, with no distribution strategy. Really?

One can never underestimate the networking power of a media Titan like Eisner. Remember the most important rule for new content creators seeking advertising sponsorship: “sell your audience not your content.” Does professional content, with no distribution strategy, have a shot against “The New Establishment”?

I’m talking about Next New Network, Mondo, FunnyorDie, Machinma, Revision3, Demand Media, MyDamnedChannel, ForYourImagination. These guys are hit and miss, but many have created:

  • Popular content with an existing audience
  • Self-sustaining shows (with existing sponsors)
  • Lower-cost production
  • Solid distribution plans via television sets, websites and devices (Roku, TiVo).

I’ve continued to prematurely predict the demise of the YouTube “star” and the rise of semi-pro content. Look no further than audience size for proof: the top YouTube people have 500K views per day, while the semi-pro content is a fraction of that.

As the appetite increases for more polished content, I’d place higher odds on The New Establishment until online-video “grows up” and becomes… video.

This will especially be true when a major player (Apple, cable, Google, Hulu, whoever) develops a “subscription-based” and “on demand” model so that we can buy content broadly, and not rely strictly on advertising. Remember that charming vision of “3 screens” (television, computer, mobile)?

P.S. Michael if you read this… can you ask your son, Breck, to upload his college film, “Alice in the Underground”? I had a voiceover cameo in that short film, and would love to send my 160K YouTube subscribers to see it!