MyVideoRights Thinks Big as it Expands Into the U.S.

Almost $6 billion per year: That’s the potential revenue that could be generated by professionally produced U.S. videos online if they were effectively paired with advertising.

That’s a number that set mouths watering at MyVideoRights.com (MVR), the London-based digital rights management company. MVR acts on behalf of digital rightsholders to protect their content from unauthorized usage and helps these rightsholders earn money by linking advertising to their online materials. The company’s U.K. catalog, which currently gets more than 160 million views per month, includes content from The Football Association, Tiger Aspect (Mr. Bean), BBC Worldwide, Ministry of Sound, Comic Relief, and Hat Trick Productions (Father Ted).

To capitalize on the untapped U.S. market, MVR recently opened MVR-North America (MVR-NA) in New York City, headed by COO Ron Schneier. As former executive vice president of A&E Television, Schneier is very familiar with the U.S. broadcast scene. During his 17 years at A&E, he helped build A&E, The History Channel, The Biography Channel, and History International.

“There are significant incremental revenue opportunities for content owners, entertainment companies, record labels and news and sports organizations,” says Schneier. “Even if just 20% of the video gets advertising attached to it, that represents over $1 billion in new revenues. That is a profit potential too good to miss.”

MVR’s Upbeat Approach

Unauthorized video usage over the web is a major headache for content producers. Sites such as YouTube don’t actively police their content, though they willingly remove any proprietary content if rightsholders protest. Meanwhile, the surge in peer-to-peer file sharing makes it easy for popular content to spread like wildfire, and the people who own it aren’t making a penny in profits.

There are a number of ways to deal with unauthorized usage. The hard-line approach favored by the Recording Industry Association of America (RIAA) has been to sue unauthorized users as severely and publicly as the law allows. It’s a strategy that has garnered much bad press for the U.S. music industry and has done little (if anything) to stem the problem of illegal music usage.

MVR prefers to take a much softer, more pragmatic approach to surfers who post its clients’ content without permission. “Our goal is not to penalize the access to the content, but instead to make this access generate money for the people who own it,” says Schneier. “For instance, rather than remove a popular clip from YouTube so that no one can see it, we replace it with a higher quality version that provides a better viewing experience and makes money from advertising, i.e., through a short commercial preroll before the content is shown or a midroll of ads during the content itself. This keeps the content accessible to the people who want to see it, thus motivating them not to bother trying to post it elsewhere online. Meanwhile, it helps our clients earn money from content in a new way.”

All Sorts of Possibilities

Network television, music video, and sports highlights: All are popular on the web, and thus are naturals for tie-ins with advertising. But there are all kinds of content attracting online eyeballs—how-to videos being a popular example—that could be making their producers money as well.

For instance, one of MVR-NA’s first clients is Lou Reda Productions and its newsreel archives. Within its 16,000 hours of film are events such as the iconic raising of the U.S. flag on Iwo Jima, the stock market crash of 1929, and Jesse Owens’ four gold medals wins in the 1936 Berlin Olympics.

MVR-NA is currently licensed to distribute 150 hours of selected newsreel footage, which the company intends to package with short preroll and midroll commercials. “Unlike traditional TV, the viewer first needs to choose to watch a video before an ad is served,” says Schneier, “making online video advertising more impactful than passive television.”

“The Reda Archives is one of the largest privately held archives in the world, and by working with MVR, millions of viewers can now access parts of our vast collection,” said Scott Reda, managing director for Lou Reda Productions, in a news release. “MVR gives us a way to maximize revenues by extending the distribution of our valuable content while expanding our audience.”

“This is footage that, without the internet, would rarely make it outside of the can,” Schneier says. “Rather than just sitting on the shelf, the web makes it possible for Lou Reda Productions to earn income from its archives, and for the content itself to be seen again by new audiences. The rightsholder benefits, as do the viewers and the advertisers who buy preroll and midroll.”

The potential of advertising-supported online video doesn’t stop here. Anything that people want to see on the web can make money from commercial prerolls and midrolls, as long as they are short enough to keep impatient viewers from clicking away. Online videos of cute kittens, local news clips (both current and archival), niche hobby programs, TV bloopers—literally any video that is being served onto the web today can be packaged with advertising. Better yet, this advertising can be highly targeted so that the promoted products can reach the people who are most likely to buy them. Is it a fan site running blooper clips of Star Trek? Then sci-fi products are natural advertisers in this venue; especially those selling Star Trek-licensed items.

The greatest irony is that unlike broadcast television, there are no web PVRs (personal video recorders) that allow surfers to prerecord content and then skip the commercials when they play it back. (Though streaming recorders do exist, they’re not in widespread use.) In many ways, web video hearkens back to the good ol’ days of broadcasting, when the most viewers could do was run to the washroom during live programming. “Because our prerolls are short, there’s no time for people to duck away,” Schneier says. “Unlike traditional TV, I don’t think many viewers will bother tuning out for a 15-second preroll given that they have chosen to watch this video. And we do not build commercial pods with lots of ads that just push viewers to tune out. Rather we only run one preroll before the video begins, which creates a very positive viewing experience for the consumer.”

Clearly, Schneier has great hopes for MVR’s North American operation and the revenue it could help earn for content providers—as well as for MVR itself. “We don’t kid ourselves that we will corner this market—it’s far too potentially lucrative—but we do hope to get a big piece of the pie by starting now,” he says. “And now with advertising dollars moving from traditional TV to online video companies including MVR, it is impossible to do anything besides thinking very, very big.”