The next opportunity for online video – a technology provider’s view

Last week attended a roundtable discussion about the future of video – for publishers, journalists and advertisers. Those gathered around the table, including representatives from the BBC, the Financial Times, the Economist and Thomson Reuters, were adamant that online video news and analysis is an important part of the multimedia mix and can be a source of revenue for “publisher broadcasters”.

Contrast this view with that of several regional website editors I spoke with at a recent meeting of the Digital Editors Network in Preston: investment in kit and training done, many admitted they’d axed news channel-style video on their websites, because of a lack of demand and now resources to keep it up. Some admitted their approach to video had been wrong – e.g. trying to replicate TV bulletins on a newspaper website – while others said dwindling resources had removed video from their web priorities’ list.

But there is clearly demand from advertisers and viewers for web video as a format – look no further than YouTube and the week’s latest viral videos.

And those providing the technology and options for advertisers to get involved are part of a burgeoning market if an announcement today from Videoplaza, which provides technology for serving up ads in and around online video, is anything to go by: the Scandinavian company has secured a $5 million investment round.

The investment will mean that Videoplaza, which already works with Incisive Media and in the UK and La Vanguardia in Spain, can expand into new markets – both geographically and technologically, founder and CEO Sorosh Tavakoli told yesterday.

This week the company signed its first Russian client and moves into Germany and further expansion in the UK and southern Europe are also on the shopping list, he says.

When it comes to making money from video on new platforms, publishers need to be prepared and have the options in place to take advantage of these new screens and viewers when they reach critical mass, he explains, adding that Videoplaza has been working with publishers to produce business plans for their video strategies to show to management where the money lies.

“I think there’s only a few carefully selected publishers who are seeing return on video. There’s a lot do and only part of that do we help them with and that’s the technology. But technology is an enabler in the end,” he says.

“We have experience from a lot of different clients in a lot of different markets so we can help our publishers come up with a lot of interesting packaging strategies, for example, working with a local newspaper, we’re not working with Proctor & Gamble and national ads, we have to do something more creative that will get the local car dealership on board.”

Key to Videoplaza’s strategy is making clients look at where video fits in with their wider business strategy. As such, the firm helped one radio station customer to develop an in-house video production service for advertisers, using their existing resources; elsewhere, with a TV client, a system has been developed where TV programme sponsors must sponsor related content online – a good example of helping advertisers bridge the gap between old and new media, says Tavakoli adds.

Sometimes with video advertising ideas you have to go backwards and educate advertisers and clients rather than push them into ‘the next big thing’ – creativity can then be sneaked in, he adds. Video advertising can be disruptive by its very nature, he says, and creating a good user experience while making as much money for the publishers as possible is a difficult balance to strike. One solution the company has introduced to a client is the option for viewers to turn off a pre-roll ad on videos after seven seconds – giving the user control, but the publisher’s advertiser a guaranteed timeslot.

But perhaps more significantly the company wants to use fresh investment to develop its products for ‘new tv’ – the myriad of screens and platforms through which people are now viewing online video and in particular the idea of connected TV. While there may only be a few publishers currently seeing returns on their investment in video, with ‘new TV’ comes new opportunities, says Tavakoli. The firm has already experimented with some forms of interactive advertising on La Vanguardia’s mobile videos and Sweden’s TV4 iPhone app.

We see a big change in consumption of video from ‘old TV’ to ‘new TV’, where the old TV is a big black box that receives a broadcasted signal that everyone else receives as well; where new TV is something a bit more unique and screen independent and more plentiful in terms of types of content. The ‘new TV’ needs an advertising platform built for it and we’re trying to build that platform.

From the publisher’s perspective – here’s Stephen Pinches from the FT on opportunities for publishers and IPTV:

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