Streaming Media West 2006 Wrap-Up: User-Generated Content is Serious Business

With more than two dozen conference sessions and nearly 50 exhibitors, we don't have the space to cover all the goings-on at last week's Streaming Media West Conference and Exhibition in San Jose. Here's an overview from one reporter's perspective; for further coverage and many of the conference speakers' presentations, check out the conference website.

There were far too many products, service, and initiatives announced at Streaming Media West to be included in a single article. To see all of the press releases from the show, click here.

Streaming Media West in San Jose was a bustling conference this year, with a wide range of exhibitors and attendees, new product announcements, new alliances, and even a bit of understated drama. User-generated content was clearly the hot topic this year, with lively discussions about how best to monetize the trend.

That topic provided the focal point of Tuesday's keynote from AOL Video VP Tim Tuttle. and discussion continued at panels on "The Business of Podcasting & Video Blogging" and "Consumer-Generated Video Communities." The overriding theme was finding a way to tap into the buzz, and how to make money doing it.

The Business of Podcasting and Video Blogging
Moderator Molly Wood, executive editor of CNET.com, opened the podcasting panel with a strong message: Podcasting and video blogging can indeed be monetized. For example, Rocketboom is pulling $20-80 CPM, while FMmedia had a $1 million month last month, with 60% of that going to their content partners.

The conversation soon turned to advertising models. "I don't believe the subscriber model works in this space. Frankly, as the ad model grows, I think advertisers are willing to pay more than we are," said Bob Fogarty, VP of sales and business development for PodZinger.com. Panelists unanimously agreed.

Robert Scoble, formerly with Microsoft and now VP of media development for Podtech.net, re-introduced a classic marketing principle to the monetization discussion. "We need a new metric called 'engagement.' The audience that is engaged is very willing to click on things, very willing to buy things."

CPM could soon change to CPA, or cost per action. Ze Frank's got it. Robert Scoble's got it. Scoble can measure engagement by the number of calls to his cell phone (his number is posted on his site). Ze Frank had a $10,000 week last week, selling sponsored "duckie" icons on his website to listeners for 12 bucks apiece.

Moderator Wood added, "My personal feeling is that [CPM] will ultimately probably not be the model, because of the metrics problem that we have. Ultimately it's going to be a hard sell if we can't prove that the cost per thousand is actually a thousand listens. With current technology, you can't prove that someone listened to your podcast. You can only prove that they downloaded it."

Beet.tv's Andy Plesser agreed. "We've had a bit of a honeymoon [with advertisers]," he said. The panel, which also included the Web 2.0 Show's Josh Owens, concluded that a blend of transactional, or engagement-centric, measurement and overall branding association were the waves of the future.

PodZinger's Fogarty addressed the question of audience reaction to video ads. His company recently conducted a sensitivity analysis study, and Fogarty shared some of the findings. "Specifically, young men don't mind advertising if its entertaining. In fact, they'd like the ability to download the advertisement and share it," he said. This brought up the question of relevancy of existing advertising approaches. "Really, as a community, if this is the direction we are going to go, we need the ad creatives to develop that type of content specifically for the niche audiences we're delivering to," Fogarty said.

Another finding of the study was that viewers ultimately couldn't tell the difference between 7-, 9-, or 12-second pre-roll advertising, though 15 seconds was the threshold. "Anything longer than 15 seconds, and [the ad] may as well have been three minutes long," Fogarty said. Viewers also want to know how long the ad is going to be, with some sort of indicator such as a timer or progress bar.