The Digital Content NewFronts (DCNF), which wrap up this week [May 1 and 2] with an NBC Universal spotlight on the Comcast subsidiary’s digital lineup and a Google/YouTube “brandcast,” have been even more exhilarating than I expected.
They’re also reminiscent of cable networks’ younger days, when program announcements and celebrity appearances triggered gushing visions of how a new platform would dethrone the legacy providers (back then: broadcasters).
The NewFronts, during which digital packagers such as Google, Yahoo, AOL, Vevo, Hulu and MiTu, touted their new lineup of channels, Webisodes and series to prospective advertisers, served up an impressive roster of programs. Most of the shows, of course, will fail, but in the evolving economics of Web video, we can expect some surprising breakout content.
For now, online video ads are just a nascent pimple on the overall advertising scene. But look back about a decade: in 2000, cable ad revenues totaled about $13 billion and broadcast TV’s total was in the $56 billion range. Last year, cable ads exceeded $30 billion for the first time, while total broadcast TV ad revenue languished at just under $50 billion.
Can the online video industry stage comparable growth? Today it generates about $2 billion in annual ad revenue, barely 7% of the cable industry’s advertising dollar stream. Forecasts envision $3 billion in revenue this year and $7 billion by 2015 - still a veritable zit, but look at that growth rate!
What’s significant about the NewFront presentations is the range of program content, which recalls the attempts of early cable programmers to replicate familiar formats while exploring new realms that take advantage of their distribution platform. For advertisers, who were the target audience for the fortnight of DCNF program previews, the line-ups offered comfortable formats and enough familiar stars to appeal to their media-buying mentality. At the same time, many of the shows - on topics such as music, fashion, style, games and sports - lend themselves to the interactive ancillaries that are part of the digital media ecosystem.
In other words: effective new options to allocate ad budgets.
Among the dozens of online series unveiled during DCNF is “Katie’s Table,” a Katie Couric-hosted talk show focused on health and lifestyle topics. Poland Spring has already signed on as launch sponsor for the show, which is a linchpin of Yahoo!’s lineup, part of a deal between Yahoo! and Disney/ABC. Actor Jeff Goldblum will also host a Yahoo! talk show.
Yahoo! also has “Cybergeddon,” a cop drama (actually a 90-minute movie sliced into 10-minute episodes) from CSI creator Anthony Zuiker. Among the advertisers already sign are Symantec Corp., the maker of Norton Antivirus software; the script includes a character from Norton, who assists in solving the cyber-crime plot. Talk about product placement!
Other shows from Yahoo include “Stunt Nation” and “Dancing With Myself,” which are self-explanatory.
AOL’s new “On Network” video platform encompasses 14 channels, including seven original series that AOL is backing. The lineup ranges from reality shows about forensic experts solving cyber crimes to comedy series about a dog daycare operator and another about soccer moms. AOL OnNetwork will also carry documentary series about fashion, entertainment and social gaming.
Vevo’s music-focused line-up includes “Busk or Bust” (a reality competition series), “Sound + City” (the music culture in a different city each episode) and “Strange Island,” a scripted musical series.
Alloy Digital’s roster is almost entirely focused on programs for the 12-to- 24 and 18-to-34-year-old demographics. The half-dozen titles in Alloy’s portfolio include a reality series about music fans on a scavenger hunt to win VIP access to their favorite band, “30 Days to Popular” (comedy series about two high school friends) plus season two of “Dating Rules,” a sci-fi comedy
Microsoft Advertising showcased predictable online content, such as extended material from its partnership with NBC News (Rock Center with Brian Williams and custom-branded segments) and enhancements for Microsoft’s Xbox Live service. On an interesting competitive front, Microsoft Network will offer “Fox Sports on MSN,” featuring Summer Games coverage from FoxSports.com, with former Olympic athletes such as Dominique Dawes telling their stories.
As important as the aggressive program roster unveiled at DCNF is the clear message about where the programs are. It’s easy to sneer at the low-budget, esoteric line-up of some shows. But rewind 30 years: recall the skepticism about the low-budget, arcane ideas from start-up networks such as MTV, USA Network (née Madison Square Garden Network), Daytime or Home Shopping Club.
Even if the advertisers are slow to buy in (which apparently is not the case so far), this year’s Digital Content NewFronts is a significant tipping point in the advance of competitive online video channels.
Gary Arlen is president of Arlen Communications LLC in Bethesda, Md., and a long-time interactive TV enthusiast. Reach him at GArlen@ArlenCom.com