FLORIAN: (PLAYS VIDEO.) Some eye candy for you. I am going to introduce the panelists – Mike Monello, founder of Campfire, David Cohen of VBS, Mike Hudack, the founder of Blip.TV. Others from Hulu and Juice. Spend a minute to introduce themselves a little bit better
MIKE M.: I started as an independent filmmaker and soon got really interested in the possibilities of telling stories on the internet in cross media fashion and out of that came Campfire; work with brands to tell stories, from videos to online websites. Allows them to participate, not just passively watch it.
DAVE: Just joined Vice last year, started VBS, an online video site, all virtual content. A great platform for the Vice brand: growing it as well as programming.
MIKE H.: I got into this doing text on the web, running a blog that I was totally unqualified to write. I learned that it really didn’t matter. Didn’t’ cost me any money. Eventually it reached millions of people a few years ago, a group of friends found a show on the web, closest thing to blogging in the video space. Comes out 2 times a week, costs $100 a week, and reaches hundreds and thousands of people. It’s going to looks like what happened to text. The opportunity cost of putting stuff out of the web just about zero, but the tools weren’t there to be successful – technology, distribution, business development, and ad sales. Two people in a garage don’t have the scale to support million dollar ad sales. We launched a company to provide that support to independent creators. We’ll get it out there on the web, make sure it plays every time, and make sure you make money on it. We went from 2 or 3 to thousands, and tens of millions of people watching them. Going to be interesting watching the commercially and independently created content coming together, on the web, on TV, on portable devices, and how seamlessly it happens.
FLORIAN: What’s so fascinating is that we’re in the middle of everything changing. As everyone knows, tomorrow’s TV is kind of here today. I wanted to start with a show of hands. Who owns a DVR? 60%. Everyone’s taken that leap. They’re time shifting the TV experience. Who watches shows online? 15-20%. Who watches TV on their ipods or iphones? Less, about 8%. We’re on a migration from appointment TV and we’re going to time shifted TV and place shifted TV, ipods and iphones. What does the consumer want, what’s the new technology, and how do you make money with it? David – coming from MTV past, is established media gone renegade. Everyone remembers MTV generation. I find it’s more about the YouTube generation, that idea of snack culture, quick content, goblet niche unpolitically correct content. Why do the consumers like it so much, what VBS showcases?
DAVE: You can’t find it anywhere else. We think we’re covering stories, music, sports in a way that no one’s doing. Not aggregating other people’s stories. It’s in a voice that’s made the Vice brand successful. Not radically different from where MTV was 20 years ago. Approaching media content in a different way. We’re 25 years later, thousands of alternatives and media platforms. MTV had the whole youth space to itself. There are millions of options now. We at VBS need to find those stories and tell them in a way that no one’s doing. That’s the reason to exist, a voice and point of view that no one else is covering
FLORIAN: You’re allowed to show things that normal TV wouldn’t show.
DAVE: Viacom is an investor, but we’re autonomous.
FLORIAN: Will they bring it on traditional TV?
DAVE: I don’t’ think it bastardizes it. We’re talking to networks around the world – want it seen on any platform. Not a matter of it just being a web play. But if and when we go to TV we will be bound by the standards of TV networks. Our challenge will want to be everywhere but not compromising the vision of what Vice stands for. A lot of the stuff would pass at MTV, and that’s what we’ll look to get on other platforms as well. VBS allows us to control our own content. Our MySpace channel went up this week. It gives our creators the ability to monetize our content. It’s not a matter of producers on the other side of the table pitching the show to MTV or whatever. We do it, we put it up.
FLORIAN: You don’t have your own channels or produce your own content. You work with advertisers, brands, producers, background in Blair Witch Project. How do brands come into this new form of content?
MIKE M.: It has to go beyond the lower third ads and such and prerolls. Because that’s still disruptive. We work to create the content with the brand embedded. We’re doing FIOS for Verizon. They’re fiber optic triple play. IT TV in a sense. A lot of on demand offering. It is data phone and TV. A true infrastructure upgrade, have to dig up the road, lay fiber in your house.
FLORIAN: Can you say the consumer doesn’t want the things you’ve been doing? Are they ready for that?
MIKE M.: We’re fortunate in that that’s all we do. When they come to us, they’re looking for something different. Not coming for 30 second spots. We start from scratch. Develop the content from the group up, with the audience specifically in mind.
FLORIAN: The new online form of TV, a large component is the community aspect, couldn’t really do on your TV screen though they tried for years. You have all these methods and technologies available. What do they want in a TV experience?
MIKE H.: To your point, one of the valuable things about this content is the long tail nature of it, stuff you can’t find on TV whether standards and practices or the practical costs of putting in on a TV channel. The first point of value for this kind of web content is you can talk to people in a more targeted way. Arrested Development was very successful for FOX but they could put American Idol in that slot and reach ten times as many people. You couldn’t put it on TV. It also gives you a more interactive environment. There are many attempts to get more interactive. You can comment at minute 5 and 30 seconds. The most successful is the simplest. When people comment at different points in the video you get a lot of noise. No one’s figured out that interface for filtering through that, presenting it in a reasonably digestible way. Just building a community like mini MySpace or Facebook around a show. They sign up, do their own videos, around the show. A community sitting there waiting for the next episode in that conversational environment. People can really embrace it, converse around it.,
FLORIAN: How big are these communities on Blip.TV?
MIKE H.: Very much depends on the show. We have a great show, reaches 35,000. Of those, maybe 500 participate in the community. That’s a valuable community that could never exist anywhere else. You go all the way up to Jet Set, now called Epic FU because of the trademark issue. They have thousands of people in their community, certain super participants and then long tail distributants.
FLORIAN: A lot of YouTube phenomenal revolved around the idea that it’s all global, internet allowing us to tap into and watch, network everyone around the globe except China or North Korea. You work with a lot of international content. You do this intentionally, not to be the new jackass of the video space. International content is relevant to people around the world. A lot of lip-synching things come from Asia. What do you see for the global audience?
DAVE: We focus on it because it’s of interest to us. Vice magazine is in 13 countries. Internal catch phrase is the universality of teenage subculture. Knowing what sneakers are being sold in Tokyo, NY, London, to Berlin. That was the culture that inspired Vice in the first place, certainly that inspires us today. And that’s what we do and where it starts. We see the opportunity that VBS will be bigger around the world than in the US. Here it is self-culture, a niche for hipsters. The big issue for another panel is how much the US audience is engaged to be interested in global culture. I think somewhat. I don’t’ think as much as the rest of the world is. We have the luxury to do what we want, to appeal to a niche audience, grow it as much as we can in the States, and roll it out around the world.
MIKE H.: In terms of internationalization, still a lot of challenges. All that content produced for the web is licensed encumbered; you have to cut separate deals for other countries. You have to put all the byzantine rules on it established by the writers and producers. It’s an opportunity for VBS to reach those audiences. It’s still hard to monetize content for a US audience, and ten times harder for an international audience. So trying to make money the same way internationally is a much different battle.
FLORIAN: Next point, new formats and technologies. TV is redefining itself, from big box to computer screen, to little screen, and back to the big box. Two of the players you saw before, Juiced and Hulu are some of those advances. One just went into public beta. It’s interesting, they do a great job. We can talk to that. And Juiced. Everyone knows and uses Skype and before that Hazzah in the times of Napster. The founders of Juiced from Europe came up with Huzzah, downloading platform, sold Skype for a zillion dollars to eBay. Now it’s PTPTV. Juiced has all this great content, playing the game with the cable producers, can’t be ripped or burned, advertising it in smart ways. At the end of the day, been open for how long now, 6 months – not that many people actually look at it. You mentioned FIOS – do they really want to go after emerging technologies, or is online TV really it?
MIKE M.: It’s always been about the content. I haven’t been able to sit through an episode of anything on Hulu. The idea of re-purposing the idea of TV into things like Juice, at the end of the day I watch Geek Brief, download it from iTunes, watch it on my iPod. It’s not compelling on my TV. Why, when I can turn on HBO and watch The Wire. I’m not interested in watching 300 on the iPod screen. When I’m in front of my computer, I really want to interact. When we’re developing something over the internet, always stop ourselves and say if what we’re creating can be burned and replicated, we’re not there yet. A show like Lost, the fans spend more time online tearing it apart than actually sitting in front of the TV. That happened because of the style. What about a show that doesn’t exist until the audience pieces it together with tools they have online.
FLORIAN: It’s incredibly complicated. And there’s great opportunity. Another format, the IPTV future. It’s TV through the wires, they’re your new Time Warner’s. People always considered sports and the interactivity and live activity the killer ap for these services. It’s not popular here because we have so much pay per view content, not that big of a markup. Don’t want to rewire your whole house. In Asia they do that because it’s a step up. They’re more advanced in this space, and they’re experimenting with it. A lot of the research has shown its educational content, kids content, you can customize. And how to TV. A lot of stuff I would think is very web related. That’s a bit of the future of TV coming at us you might see on Time Warner and Verizon. How does baseball work for the novice, how do you clean your car better?
MIKE H.: How many know what TCPIP is? HTCP? My father just got AT&T Uverse. He loves it. Probably has a few more channels. To him it’s cable. He doesn’t care. The cool thing about the technologies, cable can only support so many DOD channels. The promise of IPTV is that you can have even more content. We have 1000 channels and nothing’s on. We can now have 10,000 channels and nothing’s on. We’re seeing more on BlipTv in 1080p that’s longer and longer. The problem is that the TV sucks. You can see 6 at any one time and scroll through. You can search, but people don’t. Your computer is designed to sift and see what you’re looking for. TV is designed for laying back and watching TV.
MIKE H.: Don’t even ask what that’s designed for. You’re going to use your web, browse to listings on Yahoo, and instruct your TiVo to record at home. You’re gonna have your 20 minute 1080 Geek Brief, say give me that, that, that and that, and it’s all waiting for you when you get home.
FLORIAN: We only have five minutes left. The advertising monetization aspect: no one’s figured out how to monetize short length content. YouTube’s trying different things, embedded banners. What are things you’re working on?
MIKE M.: We’re producing content that costs less than the average 30 second spot. We’ve got this FIOS – the people who make the decisions are the suburban moms. Our flashy ad with light coming out of the glass wire isn’t cutting it. We developed a technology makeover show; tell stories about FIOS by improving their lives. Happens on a block level, engages the neighborhood. So it’s happening on a micro level, not a national program. We shot 5, we’re shooting 3 more. They’re being shopped around in LA to cable networks. How did you pay for this? Verizon paid for it. Significantly less than the cost of national ads that were in the middle of this content.
FLORIAN: How does VBS already monetize content?
DAVE: A variety of ways. Flexibility is so much greater than TV in terms of format, style. Banners, a bit of preroll. Want to make sure it’s minimally intrusive. We have room takeovers, sponsorship models; Zoom does all our talk shows. Appropriate content they’re sponsoring. Co-sponsoring with Red Bull. It’s an evolving marketplace and we have a lot of flexibility to do it. The 360 sell of In Magazine on the website. Events we do through record level. Also, the international side. The good news for us is there isn’t a ton of competition. No one’s doing it that entire well: Selling the marketplace as well as we’re selling our brand.
FLORIAN: Vice are masters of selling out?
DAVE: We sell out only to the hipsters. The global hipsters.
FLORIAN: You’re the portal, how do you put out advertising?
MIKE H.: There are 2 ways. We skim off the cream that are really valuable niche shows. Make an emotionally connect, help the brand make an emotional connection. Exxon made this show possible – the fact that they’re paying for this green show is really showing something. Overlay ad that goes away in 13 seconds. You can click on it to learn more. And Exxon will help out for a month or two or three. We figure there will be an innovation here and there. How annoying is the format, and allocate based on performance.
FLORIAN: Thank you very much panelists.