OPA: Jeff Rayport and video

I’m at the Online Publishers Association confab in London and Jeff Rayport is leading off. He is a former Harvard Business School genius (former HBS, still a genius) now leading a consultancy called Marketspace. I’m taking extensive notes because he’s sure to be provocative and this will be on the final. From his Powerpoint and spiel:

He says the challenge for online publishers is to “build volume through aggregation and margin through engagement.” Trends:

* “Community is the new engine of content creation,” his PowerPoint says. I’d day that content is the gas of the community engine.

* “Social networks are the new distribution channels.”

* “Social intelligence is the new source of editorial filters.”

* Tools and applications are the new editorial bundles.”

* “Multiplatform is the new basis of online ‘publishing.’ ”

* “Video is the new lingua franca of online content”

Now to the strategies he recommends. Note how big-company-centric they are (I argue that you have to see yourself not at the center but at the edges, serving the community at the center, but more on that later). Powerpoint quotes:

* “Own the audience: Overwhlem the microcosm. Deliver shock and awe in content abundance by geography, interest, or identity.” Where do I start? We’re not an audience and you can’t own us. And you likely can’t awe us either. His example is Toyota’s launch of Scion because they are selling cars “designed to be completed by the owner.” Or I’d say, owned by the owner. He says this was the first major auto brand launched with no television but with web and interactive media. Online, his examples include the knot for “condition” (“it touched 85 percent of weddings” last year), femail for identity from the Daily Mail in the UK, xionet.com (a Chinese Facebook, the second-largest social network in the world after MySpace) for location, bebo for interest (a MySpace up-and-comer in the UK). He says that online, “audience growth is often strongest where community is most palpable” — e.g., The Economist, The New Yorker. He’s not wrong but I still say he’s looking at this the wrong way. These things an help enable people to do what they want to do or to do what they already do better. Flip the model: You’re not at the center, we are.

* “Claim the community: Ensure membership has its rewards. Forge communities of conviction and reward loyalty.” His example is online travel and “gives us cause for great hope for claiming the relationship.” In content, he argues that free content “drives volume or traffic” while bundles of proprietary offerings “defy aggregation;” he uses Times Select as an example because it “drives pricing power.” Insert standard argument here.

* “Work the web: Let the outside in… and let the inside out. Adopt ‘open source’ thinking as an aggregator while exploiting network effects. This, he says, is the network effect. Letting the outside out is Progressive Insurance providing quotes from other insurers. Letting the outside in is Starbucks pushing into consumer environments (aka grocery stores) instead of just pulling them into destinations (the Starbucks store). Sure. This is about a newspaper providing links to the world and about going to where the people are. This is Google. Citizen journalism is letting the outside in. He says the more interesting story this year is citizen editing. Yup. Factoid: “up to 60 percent of YouTube’s streams are viewed on third-party websites.”

* “Design for occasion: Make each interaction a divine revelation. Customize online content interfaces for consumption contexts and occasions.” He says that Daily Candy is an example of form-factor optimization. Oh, my, that’s a fancy way to say it. But yes. Factoid: Daily Candy commands CPMs as high as $280 and is on track to generate $18 million in revenue in 2006 with margins over 60 percent.

* “Integrate the experience: mandate a unified field theory. Orchestrate multichannel delivery to establish best ecosystem.” Example: American Idol spreads internationally and into mobile and the internet and merchandise and concerts. Being a former business school academic, he draws a two-by-two martric: Amateurs acting like amateurs (e.g., Numa Numa guy), professionals acting like amateurs (e.g., LonelyGirl15), amateurs acting like professionals (ZeFrank, AskaNinja), professionals acting like professionals (e.g., OK Go, Beppe Grillo, and, surprise, me at PrezVid).

He has five strategies, “x factors” for online video (from Andrew Heyward).

* Extend content you have and bring it to online media.

* Expand video activities to make new and experimental forms of content.

* Expose (let the outside in; e.g., NY Times wedding videos, Le Monde user videos).

* Explode (let the inside out; syndication, in other words).

* Exhale (you don’t know what will work so relax).

There’s a lot of meat in this. I might grill some of what he fries, looking at things from a different perspective (ours v. theirs), but I think he brings together important observations, conclusions, and recommendations.

Discuss.

* * *

Next is a panel with Betsy Morgan of CBSNews.com, George Kliavkoff of NBCU, Alberg Cheng of Disney-ABC, and Tony Ageh of BBC internet with Larry Kramer moderating.

Betsy says that they are sold out in video advertising and that’s why they are syndicating their content to get more inventory. Kliavkoff, who extolled the virtues of marketing by putting clips on YouTube (yea), says that CPMs are high for online video but there is a shortage of quality inventory. He argues against the dreaded “user-generated content” usage saying that Spielberg is a user, too. He says the lesson of YouTube is that it doesn’t matter whether it’s amateur or professional; quality wins (I agree in spirit but in specific, it’s hard to judge the quality of a flaming fart and so quality is what you have to seek and find).

Betsy tells the story of her sister-in-law, who got Direct TV and made an either-or decision: TV or internet. She chose internet and she’s now watching her TV via the internet, including paying for shows via iTunes etc. See yesterday’s post about the end of the remote control clickers.

George says that an SEO company trying out for a gig with NBCU made measurements on the sly, looking at blog talk about shows from five weeks before they launched and then compared the ratings five weeks later. No surprise (to us): We the people formelry known as the audience (now known as the programmers) predicted that Heroes was a hit and that other shows would not be hits.

I asked the group to give advice to the makers of new TV at the Video on the Net conference I’ll be attending in a week and a half. Betsy said they are seeing “microjournalists” who are expert and credible and they’d like a relationship (promotional and commercial) with them but also need a trust system to help determine who is good (a system used by the public, not the network). George advised focus (serve a topic and stay on topic) and scale (get distributed). Larry advised aggregation, putting together shows/sites in networks large enough to be worth advertisers’ effort.

  • Tansley

    The ‘shock and awe’ Rayport cites could easily be replaced with ‘acknowlegement and appreciation.’ It’s the interaction, as you’ve pointed out, that make the web experience so magnetic. Engineer things from the standpoint of communal participation and you’ll get people who’ll pick up on it immediately and run with it. Meantime, he should spare us the Gulf War buzzwords. Even genius, it seems, cannot escape occasionally coming off as trite.

    I’d take issue with him regarding his citing of video as the new lingua franca of online content. For many, it’s still largely ‘frosting,’ and text drives the more in-depth coverage. As increased bandwidth becomes more available, that’ll obviously change, but even on mid-range DSL I’m still subject to momentary freeze-ups in video while the buffers catch up with the bitstreams.

    Most of the rest of what Rayport says seems pretty spot-on, although he does sound like his major was in advertising…(this from a comparative advertising authority…)

    The Panel sounded more interesting – and practical. Betsy’s sister in law made a smart decision. Why pay for cable when you get SO much more via the internet–AND retain right of CHOICE? No contest.

    Quality and entertainment, don’t forget, are in the eye of the beholder. Much as you may want to forget it, I’m sure even you had some laughs over Orion Samuelson’s ‘morning swine report’ on WGN at 5 AM some mornings in the midwest, back in the day… There are times when local programming, or in the case of online, microcosmic, reportage can rival the entertainment value of IDOL…

  • http://www.hammer2006.blogspot.com Alex Hammer

    Extremely interesting. In regard to the community piece, we have to be careful not to fall into a trap of using community as a catch-all, a buzzword to cover many different types of phenomenon. In the real world, we have many different types of communities that fulfill many different functions in our lives, some transient (transaxtions, acquaintances), some short term (classmates) some moderate term (jjobs, for most people anyway), and some, like yourfamily, for life. Communities can be self-selected or not. They can overlap. They can be painful as well as pleasant. They can be social, l earning based, or quite a few other things.

    In regard to communities, it is important to consider heir “stickiness”. What makes them interesting and a good value proposition? Does this change over time? What is the competition. Communities may be respected but not popular. Popularilty is not a guarantee of monetization capability, although it doesn’hurt. Some communities are more viral than others. What is the population? What are the tools?

    In regard to user generated content, beauty is in the eye of the beholder. Is MySpace content junk or is it a cash cow. What about YouTube. Sometimes the business model can transform the content, and the service. Content is not complete until it has the right business fundamentals tied to it. Of course there can be more than one.

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