The Online Ad Model, the Content Owners' State of Mind, and Why HD is a Long Way Off

Based in Cambridge, MA, the five-year-old Maven Networks has become one of the go-to guys for content owners interested in creating Internet TV broadcasts. The company helped the National Geographic Channel launch a broadband video service in 2003, and helped Atom Films distribute HD content online in 2004. Today the company has readjusted its ambitions to more network-friendly SD delivery, and boasts a line-up of customers including 20th Century Fox, CBS’s college-sports oriented CSTV, Sony Pictures Television, The Weather Channel, Hearst Magazines, and Univision Online.
“We’re witnessing a fundamental transformation of the television industry, as more pro media companies start to go direct to consumers with media assets,” says Todd Boes, Maven’s VP of product management. “They’re getting the mass-audience reach but building their own syndication networks online.”

The core Maven Internet TV Platform is a hosted service that doesn’t require software or hardware investments. It handles media ingestion and transcoding to Flash video and Windows Media formats, with metadata enrichment built into the system. Maven works closely with online distribution giants like Akamai, so it has the ability to resell bandwidth to customers, when it’s necessary. Film & Video asked Boes a few questions about the state of the Internet TV market.

How does encoding happen?

During the ingestion process into our platform we handle all the transcoding automatically to both Windows Media and Flash video. Most of the content is streamed, so it’s between 500 and 700 kbps. The producers working in our Maven console are responsible for doing the ingestion. They could be simply pointing at a file and ingesting over HTTP, but most of our customers have the assets sitting in DAM systems, so it’s automated and we’re really just ingesting the metadata while the physical assets reside locally in their data centers.

What kind of application is the Maven player?

We support two types of players. There is a DHTML Javascript player, which is typically used for the Windows Media format. We also support a Flash interface that uses the Flash video format. The Flash players have some advantages, including more cross-platform compatibility. The DHTML Javascript players typically only support Internet Explorer.

When you describe an “Internet TV syndication network,” what exactly are you referring to?

The syndication services have features for managing affiliates, for creating access rules around your content – who can access it, where it can be viewed geographically – and the ability to syndicate a player. You can give the affiliate a player that they embed on their site that you control, or you can syndicate the actual media file itself. And we offer various reporting and tracking capabilities.

We see explosive growth in direct-to-consumer channels on the professionally-produced content side. Advertising is really the motivation. We feel that most of the revenue and most of the ad dollars will be attached to pro content versus user-generated content.

So Google may regret buying YouTube?

Potentially. That’s difficult for advertisers – not knowing what your brand is going to be associated with. We’re making a bet that professional content is going to attract the largest audience, and that 80 percent of the advertising dollars will flow to 20 percent of the content.

Most of the material available is being provided in short snippets of just a minute or two. Is longform content on the way? Or are content owners seeing this purely as a way to promote content available elsewhere?

Right now a lot of it is teaser and promotional in nature. The fact that it’s on the PC means shortform is the right format. We’ll start to see longer-form content come online as it starts to become easier to view online video on your TV in your living room.

Another factor that will help fuel that is new ad formats. Right now, the predominant ad format for broadband video is a 15-second preroll with a companion banner ad. Unless you start chopping up a longer-format show to accommodate those prerolls, it’s really hard to insert advertising. Shortform content is great. Every two clips you get served up a 15 sec video ad, and it’s pretty easy to monetize that. There are going to be a lot of new ad formats specifically for broadband video this year that will occur in the stream so you won’t have the headaches of formatting longer-form content for your advertising.

And maybe we’ll see content created specifically for broadband?

There certainly are discussions and projects underway at companies about producing specific content tailored for their broadband outlet. If they’re not doing it today, there are certainly plans for doing so.

A lot of the content today is stuff they’re shooting for TV, but it’s not making its way onto the airwaves. MTV’s always done a great job of having exclusive, behind-the-scenes content available with its Overdrive channel. Hearst is another one. They do a lot of magazine shoots. They’ve got a ton of exclusive, behind-the-scenes cover shoots and exclusives with celebrities that really don’t make it out anywhere.

Are you still seeing resistance to the idea of these Internet channels?

Even a year ago selling to the media companies was difficult. They’d tell us, “We hand over content to Comcast, and then we get royalty checks.” But now it is absolutely crazy. Every media company says their Internet TV channel has got to be their number-one or number-two priority. They’re not going to just hand over their content to Google or Yahoo. This way, they own the customer relationship, they have the advertiser relationship, and they have higher margins.

Are you doing any HD material?

No, we’re not. We’re focused on advertising, and the download model is the only way to do HD. The file is so large you can’t stream it – you have to download it in the background. And the download model doesn’t lend itself to mass numbers of users, because it’s a hindrance when you have to install something on your computer. Early in 2004, we were among the first using Microsoft’s Windows Media at 720p. And Atom Films had over 100,000 subscribers to that service. Every week you got three new shortform videos sent out, and all three of those were 1.5 Mbps – but then you also got an additional high-definition version at about 6.5 Mbps. It was very cool.

Will that change as consumer bandwidth expands? And is it true that we in the U.S. are lagging behind many parts of the world in bandwidth availability?

Compared to Asia and Japan, we are behind. Now that you can stream at 500 kbps or 700 kbps, it’s getting better. That’s not something you’d want to display on your 50-inch plasma, but on a computer it looks good. I think it’s a long time out before we’ll ever be able to stream HD. As things start to move toward the living room I think we’ll see more of the download model, using trickle-down in the background.

Have you looked at a Maven player for cell phones?

We have. There’s nothing precluding us from supporting mobile devices – other than having direct relationships with the carriers. For us, 3GGP or Flash video is just another format we support. The player templates could be Flash Lite templates. Ultimately that’s an area we will move into. But right now we have our hands full, with media companies targeting the PC as the first and foremost device.

Don’t you think they have a similar interest in delivery to mobile devices?

At most organizations, it’s actually two different groups spearheading different efforts, and they’re not aligned quite yet. When we go in and sell to the business folks driving the broadband initiative, we find that the mobile group is a disconnected group with its own charter, its own world, and its own relationships. But those two groups are coming together. PCs, living-room TVs, the Internet, cable TV, mobile phones, portable devices – all this stuff will be viewed at as just different ways of consuming content. And those media companies will be looking for a system that can handle all of it, deployed to multiple devices, in a single environment.

For more on Maven Networks, visit www.maven.net.