PIPELINES: The Future of Online Video
A look at how much video online really costs and why no one is making big money in online video - yet.
Moderator:
* Gavin McGarry, Independent Consultant, Joost, MELT, North West Vision and Media
Panelists:
* Kevin Bartus, Vice President Digital Media, Rogers
* Scott Bushman, VP, Business Development, Metacafe (USA)
* Richard Kanee, Director, Digital Business Development, CTV
* Jason Roks, Digital Alchemist
Link to ICE08 website
OVERVIEW OF VIDEO
Link to PPT slide on Google Apps
CAVET
The numbers we discuss here are very, general and very approximate. The idea was to give the audience an idea of some of the costs involved in delivering video online to help with the discussions during the panel.
CONTENT
Our challenge: how much does it cost, very approximately, to serve 1 minute of Youtube quality video with one 15 second ad in it on the web?
Results: there are a lot of factors to consider and if math was not your strong suit in school -- get a tutor.
ENCODING
Free:
Flash encoders: FFMPEG, Adobe Flash Encoder, Rivavx.de,
Paid:
From BetaCam TV Master including removal of 10 second commercial blacks and encoded into MPEG2 (DVD quality) - $5 per minute
With commercial blacks left in - $3 per minute
If you shoot and edit in digital and then upload to Youtube via your own machine - free.
CMS (Content Management Systems)
The software or service you use to program, track, manage, deploy, syndicate your content.
Free:
Brightcove with Ads
Sharing sites: Youtube, MyAccount, Veoh, Metacafe (trade off you giving up rights and advertising placement - non exclusive to each platform).
Paid:
Maven - $5000 per month
Platform - $5000 per month
Brightcove - $27,000 ($10K for white label + $17K against bandwidth usage + bandwidth 60cent a gig)
Ooyala - (new co) per transaction fee + bandwidth + other
STORAGE
These are the servers you will store your content on. You could build your own but when you assistant drops their organic orange juice on the machine you'll wish it was off site.
Approximately $1 per gig per month but can go as low as 20 cents a gig depending on many factors and your negotiating skills.
Free:
Archive.org, any video share sites (Youtube, metacafe, etc)
Paid:
Regular internet host - (most expensive option) mediatemple, rackspace, godaddy, allstream (MTS).EDGE - CDN (content delivery network) -Akaimi, Limelight, Level 3, Vital Stream
Web services - Amazon S3 (s3 stands for 3 services: hosting, delivery, processing power)
DISTRIBUTION
Someone has got to get your content on the pipes of the internet. For that, you pay Pedro.
Costs about $1.50 CPM but can go as low as 20 cents CPM.
Free:
Archive.org (must own your own content or have the rights), Youtube, metacafe
Paid:
Same as players as Storage.
GEO TARGETING
Maybe you don't want the whole of the world to see your documentary on Canadian knick knacks. These companies will limit your content to IP addresses in a geographical region.
Cost $1.00 CPM
DIY
Free:
No services at the moment
Note: most of the big CDN's and CMS's offer geo targeting for an add on fee
Quova.com
AD SERVING
If you want to make money and not charge your viewers a subscription fee (shame) then you will need to engage the services of someone who will serve the advertising.
Cost: vary widely but work on $3.00 CPM for a 15 second commercial + bandwidth
No free services
Doubleclick (Google)
Freewheel
AOL Networks
Microsoft (Avenue A/Razorfish)
DRM - (Digital Rights Management)
Someone has to clear all the rights otherwise we would have anarchy on the net. Oh wait, we already do.
Cost: $3.00CPM
Free:
you don't use it ;-)
Paid:
Microsoft
www.EZDRM.com (reseller of Microsoft)
Apple Store has it build in
REVENUE SHARES
Most of the online video is done on a revenue share basis. Some use a net of costs version and then split a percentage based on who sells the advertising.
Link to Spreadsheet of Money and Glory
QUESTIONS
Where is revenue coming from now and next?
What are traditional content distributors doing?
With ever expanding options where to watch content, what are the unique offerings of the major online video pipelines?
P2P (Peer to Peer)
-high quality
-mitigating of bandwidth costs
Joost
Babelgum
BitTorrent
PORTALS
-audience
-rev guarantees (sometimes)
MSN
AOL
Yahoo
SHARING SITES
-audience
-bandwidth
-onsite monetization
Metacafe
Youtube
Dailymotion
OBSERVATIONS
-Bell, Rogers, Cogeco now capping bandwidth
-Bandwidth shaping
TOOLS
Flash Bitrate Calculator
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