Broadcasters Are Doubling Down on Online Video

Internet-Only ‘Broadcasters’
There are also networks that bypass the entire traditional broadcast experience, designing for and going straight to online markets. According to Amber Lawson, vice president of programming for The maniaTV Network, the first internet-only broadcast network (www.maniatv.com), online video is in a phase similar to that of cable when it first emerged—content quality was mixed and the broadcasters didn’t know what to make of it. It’s an old dance done to new music. Consumers will win by having access to quality programming, and as Lawson says, the "winners will ultimately figure out how to monetize branded entertainment." Perhaps a better way to look at it is that somebody must figure out how to monetize this content, because consumers look like they will demand it, especially if online content enables new and different user experiences.

maniaTV experimented with user-generated content (UGC), which held no brand appeal for advertisers, and has moved to producing its own content only for online. This attracted advertising interest and 5 million viewers a month. It’s also attracted star writing talent and venture backing from the likes of Benchmark Capital and Intel. It’s unlikely the only path to online success is through custom programming, but maniaTV is at least unencumbered by old business models and mind-sets and can help move the needle for the rest of the industry.

Aggregators
So where do the content aggregators fit in, those who repackage traditional broadcast content into uber "channels"? Hulu, which is owned by NBC and News Corp. (both have their own individual online presence), has been successfully broadcasting TV and movies on its site as well as syndicating to other sites, such as MySpace and Yahoo!. Joost, which is investor-backed, also delivers aggregated traditional content. One reason aggregators such as these are popular, according to Joost CEO Mike Volpi, is that some viewers know what show they want to watch but don’t know the channel it is on, and they benefit from the searchability and discoverability of an online network. They could also be casual browsers, the channel surfers of the internet generation, who click through various types of content looking for whatever strikes their fancy at a given moment; a rich variety of content types and forms suit them. It’s the latter phenomenon that brings traditional broadcast content additional eyeballs that would, in fact, be lost without online access, and that can create brand awareness. This brand awareness, in theory, can send eyeballs back to the television or to the online properties that provider a deeper experience. But Volpi admits that today, aggregators are more likely to draw niche broadcast content than big name content, simply because the former, in and of itself, has less brand reach.

One thing remains unclear: the path to monetization. Will online video become profitable? Will it take a new subscription model offered through an aggregator, site-by-site subscriptions, or micropayments for single-serving clips? Will ads and merchandising bring in enough money by themselves? If cannibalization never occurs, then this becomes a moot point, and online video will simply be a marketing tool. But if eyeballs drift away from the TV, all bets are off. At present, it seems most—if not all—bets are good.