The legendary 1930s bank robber Willie Sutton had a perfectly simple explanation for why he chose the targets he did. Banks, said Sutton in one of two books he authored, were “where the money was.”
A similar realization appears to be taking shape in the fast-emerging world of broadband-distributed video, which has flooded the Internet with a torrent of content. Increasingly, big TV networks are electing to plant full-length shows and video clips where the viewers are: across a grab-bag of independent and non-aligned sites that have managed to attract large audiences.
It might strike onlookers as an obvious strategy in a numbers-obsessed TV business, but a willingness to license content to Web destinations networks don't directly control represents a big leap of thought.
MTVN MAKES 'ADSENSE'
MTV Networks' agreement in August to spray video content around hundreds of independent Web sites through Google's AdSense syndication network represents the clearest example yet of the new thinking. Rather than trying to lure video viewers to its Web sites, as it has done exclusively in the past, MTVN hopes the aggregate sum of exposure across the highly scattered AdSense network produces more impact and ultimately generates more revenue.
“This is the first way to distribute our content widely across the Internet,” MTVN president Michael Wolf told Reuters.
It's also a breakthrough arrangement, analysts said.
“It's different than any of the other deals we've seen to date with any of the portals, because all of those deals rely on users coming to the portals themselves,” said Will Richmond, a former Continental Cablevision executive who advises companies on broadband-video strategies. “They have in one stroke enabled their content to be syndicated throughout the entire AdSense network, and that could result in a huge amount of views for MTV's content.”
Over the past several months, many big TV names have struck deals to populate independent Web sites with full-length shows and snippets. NBC in June agreed to show promotional clips of its new fall shows on YouTube, the popular original-video aggregation site that attracts 19 million unique visitors a month. Fox will sell $1.99 downloads of series, including 24 and Prison Break, over AOL.com starting this fall.
At the same time, those networks and others are straddling the line between self-contained portals and the untamed landscape of the Internet's largest independent video destinations. NBC, with its affiliate TV stations, is launching an online portal for distributing digital video, while at the same time selling downloads of shows such as The Office via Apple Computer Inc.' s iTunes Music Store. Fans of the new CBS series The New Adventures of Old Christine will be able to see the premiere on Google Video, while other Tiffany Network series will stream from the network's Innertube site.
Richmond, the president of Broadband Directions LLC, said there is symmetry between what's going on in Internet video and the arrangements that exist between specialty retailers and mass-market stores. Just as it's possible to buy a Coach handbag at either a Coach-owned boutique or a mass-market department store, it's going to be possible to find prominent TV shows both at network-run Web sites and giant Web portals like Yahoo.com, Richmond said.
“Those models coexist very harmoniously, even though they sell the exact same merchandise,” said Richmond. “All the players recognize that by the other one exerting effort, they're actually helping each other.”
ISP PORTAL ROLE
A third group of participants in the rising online video category also could play a role in organizing and influencing viewing patterns. They're the homegrown Web portals produced by broadband Internet providers like Verizon, on the telephone company side, and Comcast, on the cable telecommunications side. Loaded up with a sprawling mix of content — everything from video games to breaking news feeds — the portals represent an attempt by broadband distributors to build user bases of their own that can be leveraged to lure advertising dollars, showcase cable TV programming and, presumably, preserve customer loyalty.
Both digital subscriber line and cable-modem service providers have an advantage in steering Web traffic to their portals, partly because they tie their customers' e-mail addresses to the dot-net portal addresses. That makes it tempting for many customers to accept the portal pages as a primary Web destination, or home page, when they go online to check e-mail or conduct routine Internet tasks.
But the ploy doesn't work for everybody. A survey of broadband Internet customers conducted early this year by Leichtman Research Group found that only 40% of users kept their Internet-service provider's portal as their home page. The numbers are lower for cable broadband customers — only 33% said they use their cable company's portal as a home page — than for DSL customers, at 44%, LRG said.
Even if only a minority of customers stays with the native portal page, the numbers add up. Internet researcher comScore Media Metrics says 18.4 million unique visitors showed up at Comcast's Web portal and related sites in August. It's not exactly up there with the Yahoo.com network, which attracted 131 million unique visitors that month, but it's higher than ESPN (17.8 million) and within striking distance of the red-hot YouTube.com, at 19 million.
Numbers like those Comcast.net has generated make broadband Internet provider portals desirable places for online video distributors to get exposure.
“They have an audience that overlaps very well with our target audience,” says Karl Quist, the CEO of TotalVid, a Landmark Communications Inc. unit that sells specialty video downloads and has co-branded marketing alliances with broadband portal providers Comcast, Verizon and AT&T Inc. Quist says TotalVid still sells most of its video directly from its own site, but sees a growing role for the portals as more users depend on them for organizing and distilling a vast maw of online video content.
MSO PORTALS EVOLVE
Cable and DSL service providers are starting to place more emphasis on the types of content that dovetail best with broadband IP networks, like interactive video games, streaming video programs and photo-sharing services, says Ted May, vice president of content and value-added services for Synacor, a Buffalo, N.Y., company that helps cable broadband providers acquire and manage portal content.
“Initially, the MSOs went to a traditional one-stop, all things, Sunday-newspaper approach,” says May, also a former cable marketer with Cablevision Systems Corp. “But they're beginning to migrate beyond that now and think a bit differently.”
The new strategies reflect a reliance on rich-media offerings and a bid to reposition cable-operator portals as “dashboard”-style control panels that let customers manage their media content across the spectrum of cable “triple play” mediums.
May predicted tighter integration between the Internet portal, for instance, and the living-room television set, with customers able to manage video-on-demand orders and digital video recording via their Web browser and the dot-net portal.
