Its latest report on the Australian online video market, written in association with media and technology company The Video Network (TVN), says Australia is on the verge of a significant tipping point when it comes to how and when consumers use video content.

The massive growth outlook follows an explosion in online video streaming in Australia, which grew 550% from less than 2 billion videos in 2007 to 11 billion in 2011, primarily driven by cheaper bandwidth, greater choice of online content and higher data caps. On an individual basis, Australians are now watching around 10.2 hours of online video per month and are quickly catching up to US and UK consumers who watch 17.3 and 17 hours of online video per month respectively.

Peter Ostick, The Video Network’s co-managing director, said: “As technology improves and the variety of content increases, Australia’s video content viewing habits are changing rapidly, with more of us choosing to watch television online.  While this sector is in its early days, internet TV is already reaching upwards of 12 million viewers per month according to comScore statistics, which represents a huge potential for advertisers within this emerging market.”

Online video is defined as any form of digital video that is been delivered to the user via the internet.  Content may be either short or long form, according to duration of video content, with the most popular sites being YouTube, ABC iView, ninemsn, Yahoo! and Fairfax. The two main content segments in Australia are media and entertainment, which includes short user-generated clips, catch-up TV, live streaming and movies, and corporate.

While short form video accounts for the majority of online video viewed in Australia, the report predicts long form will overtake it as the key driver of online video growth by 2013.

Phil Harpur, senior research manager at Frost & Sullivan, said there are many factors at work making online video attractive to Australian viewers.

“Consumers are increasingly using their PC/laptops, tablet PCs and smartphones for entertainment.  They’ve become comfortable with the idea of subscription-based video content. Video production is becoming cheaper by the day. Internet capable TVs are more common, as is high definition video. All of this, along with bandwidth and data improvements, will continue to drive a rapid increase in video streaming over the next five years,” he said.

According to Ostick advertising agencies and marketers are increasingly recognising online video as an integral part of the overall advertising solution as online video consumption grows and the industry becomes more sophisticated.

“The 2010 release of the Video Ad Serving Template (VAST), which makes it easier for advertising agencies to track and report on video ad campaigns, has facilitated the ad industry’s acceptance of this segment.  We expect standards will continue to improve to offer greater targeting and brand protection as it matures, and TVN intends on leading this innovation,” he said.

Harpur said the predicted growth in expenditure on online video advertising, which is currently around 2% of the total online advertising spend, will accelerate as media buyers test and accept the medium, the number of online video viewers grow and the amount of professional video content increases.

“Industry growth combined with an under supply of inventory in the market has meant yield and demand for online video remains high in 2011, in sharp contrast to traditional online display advertising which is challenged by an oversupply.

“But for the online video advertising market to grow at its true potential, quality content needs to be produced at a much higher rate.  The expected increase in availability of long form video content will go some way towards remedying this, opening up advertising opportunities, especially for mid-roll advertising,” Harpur said.

Despite these hurdles, Frost & Sullivan anticipates internet TV advertising will outperform all other major online advertising segments such as online display (banner ads), advertorials, integrated site content, sponsorships and e-newsletters.

The main sources of online video advertising inventory are the network resellers who are divided into two camps: display advertising networks such as VideoEgg and Joost Video Ad Network, who see increased yield opportunities in video; and organisations such as The Video Network who offer dedicated video offerings.

This is the standout finding of the new Video Effectiveness Research Report by Nielsen IAG, in partnership with Microsoft Advertising and released by the Interactive Advertising Bureau of Canada (IAB Canada).

The study claims to establish a baseline for Online Video ad effectiveness in comparison to, and as a complement to TV advertising. It found that fundamentally, viewers who saw ads both online and on TV had improved recall and likeability for all verticals. Yet it also showed the power of TV as re-purposed TV ads are more effective than original online video ads at driving brand recall and likeability.

For those who saw ads either only online, or only on TV, 39% of those exposed to only online video ads recalled the message versus 21% for those exposed only to TV ads. This represented an 86% increase in message performance, In addition, just over a quarter  (26%) of those exposed to only online video ads, perceived the ads as likeable versus 14% for the TV ads, another 86% increase in likeability,

The survey also showed that online video’s advantages include the inability for consumers to easily skip commercials; considerably reduced ad clutter; less multi-tasking by consumers when viewing online video compared to TV; the ability to build frequency through multiple spots per advertiser in the same online content stream; and the ability for companion display ads within players to provide additional brand reinforcement.

Commenting on the survey, Paula Gignac, President, IAB Canada, said:  ”Online Video was the fastest-growing ad format in both of IAB Canada’s 2009 and 2010 Internet Advertising Revenue Surveys, and will be a key driver in causing a significant shift of branding dollars to online…[the]research is conclusive proof of the sound rationale behind that shift…advertisers already have all the tools they need to shift significant budget into online video right now, in order to take immediate advantage of the numerous strengths of the format.”

January 21st, 2011 - www.encoremagazine.com.au
Online is no longer a detour for television content; it is now a destination in its own right. Georgina Pearson reports.

Barely five years ago, to suggest that a series created purely for an online platform could outperform a top rating US TV show would be almost laughable. Now, with the internet swiftly becoming a primary source of video content, video is not just being replayed online – it is being produced specifically for it. And as online audiences grow faster than anyone can keep up, a gap of opportunity has opened for the taking.

Globally, web series such lonelygirl15, The Guild and Legion of Extraordinary Dancers (LXD) have drawn a fan-base to rival any primetime TV drama. Raking in millions of views, they have not only helped kickstart a niche industry, but have highlighted the huge potential other such shows could possibly have. It’s such serious business that an International Academy of Web Television was founded in Los Angeles to reflect the importance of these new productions and establish web series as legitimate content– launching the Streamy Awards in 2009 to recognise this kind of work.

FINDING A BUSINESS MODEL

Australia has been quick to jump on the bandwagon, producing its own home-grown projects – OzGirl, Mordy Koots, Forlorn Gaze and The Future Machine, among others. For content creators, digital media offers a muchneeded level playing field. “With feature films, it’s much more difficult to compete with a $100m production. But with digital media we can compete effectively with Hollywood or anywhere else in the world, and succeed,” said Mordy Koots producer Jim Shomos. “Digital media can provide for Australia the same kind of opportunity that BBC Radio has traditionally provided in the UK, where many successful TV shows started off as radio shows.”

But how does such a project come into fruition?

Funding is not widely available in this industry, so budgets are tight and must be considered carefully.David Barker, director of sci-fi comedy The Future Machine, kept costs as low as possible, but even online a generous amount must be spent on promoting the show. “The Future Machine, being our first web-based drama production, was self-financed and specifically written as a low budget project we knew we could pull off on our own. We’ve kept costs under $20,000, but we will need to spend another $10,000 on marketing to keep the show growing into next year,” he explained. “I don’t think Australian companies have caught onto the possible branding opportunities of being involved with web series. We’re still very much a government supported industry; we have applied to Screen NSW for assistance with the ongoing marketing costs.”

There is local support for online content; Australia’s funding bodies offer support for innovative crossplatform content, with Screen Australia proposing a $2-5m All Media fund for “content driven or triggered by any transmission platform but that must have a multi-platform component”. SPAA is lobbying for an ‘enhanced’ Producer Offset for cross-platform projects, as an incentive for big online players such as Telstra BigPond to commission original Australian content. Finally, pay TV company The Movie Network launched its Movie Extra Webfest competition, giving filmmakers the chance to win a $50,000 production budget for a seven-part web series set to premiere online, and later broadcast on the Movie Extra channel in 2011.

But even with all these initiatives, demand surpasses supply, and initial funds from brands, distributors or Government are rare; most web series start out self-funded in the hope that success will attract bigger fish: “A successful web series like the American show The Guild (created by Felicia Day), started out self-financed then ran out of money quickly. But donations on PayPal helped them along, and they are now sponsored by Microsoft and distributed through X-Box, MSNVideo and more,” said Barker.

With financial backing so hard to come by, a crucial aspect pertaining to the success of any web series is a solid business plan – as well the support of promotional partners. Kelly Chapman founder of KCDC and producer of Forlorn Gaze (alongside creators Sarah-Jane Woulahan and Jud Campbell) said that in order for a project to be maintained, a business plan is vital: “It must be in place as you need to garner an audience.” Chapman suggests five business models for an online series: streamed on ad supported networks such as YouTube; branded entertainment such as www.easytoassemble.tv; reverse content windowing – starting on the web and ending up on television; international format sales; and subscription/‘freemium’ content, such as that available on Hulu Premium. Barker agrees and adds that having an airtight marketing plan is essential: “A business plan is a must, both short term and long term. We believe it’s important to set goals and continually assess and re-assess, to ascertain if your project is actually on the right track. Also, a marketing plan for online content is as important as the shoot itself.”

THE POWER OF INTERACTIVITY

Despite the obvious material similarities, a series produced for the web is vastly different to a series produced for television – because it is not just video content. It is an interactive cross-platform production designed to engage an audience even after they have finished watching. Therefore, to find a format that ticks all the boxes several elements must be taken into consideration – the key element being a balance between online demand and production feasibility.

For The Future Machine, that balance reached by creating a small-format production, aimed at a young audience wanting quick, immediate and sharp entertainment online: “Before we started we did a matrix of similar programs and decided on 8 x 4 minute episodes. This format both appeared to fit with what the digital community were engaging, and also what we were capable of creating. Research shows that the average twenty-something attention span is somewhat similar to how long you can walk the dog with a yo-yo. Our aim was to keep it short, sharp and fresh with a narrative end to each episode that leaves you wanting a bit more,” explained Barker.

And it is the huge scope for audience interaction that propels a web series much further than traditional television. With viewers not only able to leave comments on a specific video, but also on Twitter, Facebook and MySpace – the act of viewing a show in a few minutes becomes a rich media experience. Chapman believes it is this very effect that defines the two mediums. “Audience participation and interactivity are the primary difference between web series and TV. Just check out the big players on YouTube; they all update their channels several times a week and respond to their audience in the comments.” Barker agrees: “YouTube offers a number of simple sharing and commenting tools, putting the power directly in the hands of your viewers – and that is the cornerstone of success in this new online world.” The ability to share content is exactly the way a web series can reach a large audience, once it goes ‘viral’. OzGirl creator Nicholas Carlton says all you need is one person, and hope that they’ll pass it on to their friends: “It will grow from there.”

FINDING YOUR PLATFORM

When it comes to online video platforms, YouTube is possibly the best known, but there are many others including catch up services such as ABC’s iView, Ninemsn, BigPond and Joost – each with their own distribution models. Mordy Koots premiered on Ninemsn in late 2009, but failed to produce the numbers expected of a project starring popular actor Shane Jacobson. Producer Jim Shomos admits “it’s still a tough road”. “Ninemsn are probably alongside YouTube the biggest video portal in this country, and Mordy Koots was one of the first content deals they’ve had with an independent producer. While they supported us in their own portal, it’s been difficult to build an audience. It’s still hard to find brand support… but the beauty of this content is it’s got time to find its legs and other opportunities. There are so many portals to monetise your project, and companies like Yahoo have started to do first look production deals with independent producers for online series and content,” said Shomos.

Penny Wright, internet broadcast manager for ABC iView, told Encore that the ABC actively looks for unconventional content, exclusively for its online service. “iView has made a point of looking for new content outside the traditional TV model. There are some really interesting producers working in online at the moment, creating their own content and bypassing the traditional broadcaster commissioning process by using their own distribution network on the internet,” said Wright. The ABC does not ask for exclusive rights: “We pay a licence fee but in general do not ask for exclusive rights for content on iView. We understand that for madefor- web producers in particular it is important to create awareness for their content by having it in multiple places online, as the publicity generated by a TV broadcast does not occur.”

According to Chapman, negotiating a distribution deal for cross-platform content comes with a particular set of challenges. The most important is defining which rights should be kept, and which should be sold. “And in terms of distribution partners, a central point that must be discussed early in the process is whether the distributor will have a marketing strategy, or if that responsibility will fall on the producer,” she said. However, for Barker’s The Future Machine the answer was straightforward. “We spent a significant amount of time researching distribution channels, trying to find a suitable home for the show. Following our review, it was quite clear that we have to go where the audience is. Each distribution channel offers certain advantages over the others, but for now you can’t go past the size of the audience on YouTube.”

THE CHALLENGE OF MONETISING

Essentially, a web series is driven by its consumers – so in order to survive it must continue to engage its audience, as well as build up a following via crossplatform screening. The aim is to be everywhere, and to be memorable – all at the same time. Barker sees the importance of such a global audience. “The web offers up a lot of opportunity to find an audience, but there’s a universe of competition, so getting the word out there is paramount.” With such an immense medium how can success be measured? Barker believes there is no easy way.

“Measuring success is an ongoing process. We just had our launch – we measured the success by the 130 people who turned up and laughed a lot. Online, we’ll do similar – what everyone does – we’ll look at numbers. But it takes time to build an audience. Appreciation on the net evolves on a daily relationship. There’s no TV rating system, or box office; it’s a relatively new system that deals with viewer response in a different way, so measuring success is an ongoing exponential.” Barker added that it also depends on whether you are measuring the web series as a whole, or judging each aspect individually. “You have to take into consideration whether your marketing campaign was a success, or your press campaign, or is the type of digital work you’re actually producing a success creatively? And that’s a continual assessment based on viewer comments, social feedback, numbers, and tracking online influencers.

Ultimately, the lifeline of your work is the real measure. Will we make more? Will we still be here in three years time making The Future Machine? I guess that’s the real measure.” Possibly the hardest part of producing a web series is the moment when it has reached that critical point of success, and the time comes to monetise. No one wants to start paying for something that was previously free – and with a whole cyber world of free content it becomes harder to hold on to a fan base.

OzGirl’s Carlton believes once an audience is engaged and interacting – paying for the content isn’t a problem: “Online content, like any other, must connect with an audience. Once that connection is established it can be used to monetise the project. You don’t approach the audience from day one and ask for money. You want to get them hooked an, engage them, and then unroll your plan.” Barker agrees. The Future Machine is not quite at that stage – but Barker is optimistic. “It’s difficult for us to monetise it now as we are self-financed and we put it out there for free. But in the long term, we’re trying to build a show with a certain brand of funny. If it’s good enough, if viewers like the story, it has to be worth something. Microsoft saw that in The Guild.”

This new brand of accessible content has taken the web by storm – and as more and more people start engaging it will soon be the norm to watch ‘TV’ online. Nevertheless, for Barker what matters most is putting out quality content for the world to enjoy. “What’s most important is the story, the characters. For us it’s making people laugh. We rehearsed. We filmed the rehearsals. We edited the rehearsal. It had to feel equal with TV before we started on set. And then, with a good cast and crew, it should only get better.”

Because hidden among all the cute kittens and pirated TV shows, online video is driving astonishing innovation in thousands of different fields ranging from the ultra-niche to the sharing of truly world-changing ideas.

Contrary to the romantic myth, innovation doesn’t usually come from lone geniuses and their eureka moments. It emerges when groups of people spark off each other. One of the most significant aspects of the web is that it has brought together vastly larger groups than ever before in history, and thereby sparked massive new types of innovation. For example the open source movement would not really have been possible before the web brought programmers together.

Similar explosions in innovation have happened in music, photography and animation, to name but three. But what these fields have in common is that people’s work output could be easily shared digitally. Photographs, MP3 files,software programs. The reason online video is so significant, is that it is now allowing the rest of the world’s talents to be shared digitally.

Dig under the surface of today’s visual web, and you’ll see an explosion of grassroots-driven innovation and experimentation everywhere you look, both trivial and epic.

Unicycling

Makeup artistry

Video Poetry

Dance

Skateboarding

Sports-training

Korean cooking

Science

The world of ideas

The reason it’s happening is a two-fold hit — revelation + motivation.

Revelation: for the first time, people can see what the very best people across the globe are capable of. A world of possibility opens up.

Motivation: if you can do something innovative and special, you get thousands of people viewing your work and talking about you. It’s intoxicating. And it’s driving hundreds and hundreds of hours of effort from potential innovators across the globe.

In a small way, we’ve noticed it on our own website TED.com. Ever since we started posting TED talks online, speakers started raising their game. They could see what great TED talks looked like. And they had a greater motivation to shine. So the amount of preparation going into each talk rose dramatically. But the phenomenon is everywhere, and it has the potential to transform any organization and give an amazing platform to any individual. I call it Crowd Accelerated Innovation, and I think it’s about to ignite the biggest learning cycle in human history.

Check it out!

You’re invited to attend our Verge Party at Über Nightclub this coming Friday night.

Doors will open from 7:30pm with episodes 1-4 of the show screening from 8pm onwards.

We welcome back Dan from Nova (www.danandleon.com.au) as our MC with a stack of fun activities and great prizes up for grabs!

Tickets will be $20 at the door with proceeds raised supporting the cast and crew of the series.

Tasty platters will be provided as part of the cover with an extended happy hour of $5 basic spirits and wines.

Location:

Über Nightclub

100 Boundary Street, West End

Brisbane, Australia.

This is sure to be a great night so don’t miss out!

To assure you’re place please click through to the Facebook event page bit.ly/aBRQg5 and select the ‘Attending’ button OR reply by emailing your full name to contact@triptychconcepts.com.au

If you’re unable to attend you can also watch The Verge online by visiting the web portal VideoZoo.tv

With the media landscape continuing to fragment, we posed a multiple-choice question to some of the broadcast networks’ big hitters, to gauge their take on the threat (or otherwise) posed by internet TV. Amid the light-hearted approach and the interesting replies, some Darwinian thoughts on survival emerged.

Q: If the internet TV network model is an asteroid hurtling toward Earth and traditional broadcast TV networks are dinosaurs, what is most likely to happen?

A: It will burn up on entry.
B: The dinosaurs will try to catch the falling star and worship it.
C: The dinosaurs will evolve, log on, hit delete and redirect any traffic in the comet’s tail with shinier, brighter stars.
D: Kerblam! Lights out. Goodnight mumma. We’re re-deploying staff to open a nice little bistro, nothing fancy, in West End once the dust has settled.
E: None of the above (and how dare you call us dinosaurs?).

Nine Network CEO David Gyngell

Answer: E

“The asteroid will make it to Earth, and have a bit of an impact. But the broadcast TV networks (who aren’t dinosaurs) will have more. The networks will keep giving people the content they love, delivered in lots of different ways. Broadcasters have the best content and they know how to use the internet.”

Seven Network director of programming Tim Worner

Answer: E

“Television continues to thrive. It has had a great ability to adapt to changing consumer demands over the past five decades and that ability to adapt continues today. Free-to-air television will continue to thrive as long as it produces content that matters to Australians. Content needs to be available across an array of platforms…we’re investing in time-shifting and content devices such as TiVo and exploring opportunities for content delivery through VividWireless.”

Network Ten chief programmer David Mott

Answer: C

“The dinosaurs will definitely evolve into a whole new species – hopefully one capable of interplanetary space travel. Who knows, this new super species could end up colonising previously uninhabitable planets capable of supporting whole new communities. Given there’s not much to do In the far reaches of the outer solar system, these colonies are probably gonna be hanging out for the next series of MasterChef.”

Up until the ’50′s a radio sat in the living room – a big brown thing with knobs – and Dad would sit there next to it. Dad and Mum controlled the radio. They listened to the serials and the quiz shows and the news. ”Then along came the portable record player and the 7-inch EP with one song on each side. The kids took that to their bedrooms. They spent a fortune buying these little cheap records with Rock Around The Clock on one side. Immediately an industry sprang up around that, to feed that market.

“And now we’ve got kids in their bedrooms with the computer, watching TV online, and there, there, is the new industry.”

Ian McFadyen is close to channelling his early comedic TV days as he animatedly details how the “great precedent” for internet TV is, remarkably, rock ‘n’ roll. The actor, comedian , lecturer and writer is the poster boy for Brisbane-based company Triptych Concepts, which last month launched one of Australia’s first internet TV channels VideoZoo.tv – and is producing and delivering original content alongside established programs Let The Blood Run Free and Paranormal Mysteries. McFadyen also hopes to bring online material from the show that launched his television career, The Comedy Company.

“Rock ‘n’ roll spread in an underground manner. The kids discovered it,” he continues. “Now we’ve got a generation of teenagers who discover most of their entertainment off the internet. They will watch back issues of TV shows – a generation of young people who are hunters and gatherers.” Online TV channels vary from traditional broadcast TV by offering programs on demand. They also don ‘t operate under a hefty government broadcast licence fee and can be subscription-based, advertiser supported or both.

Triptych managing director Adam Ben Lomsargis says Australia’s online video industry is still in its infancy but is expected to explode over the next 12 months, driven by the heavy promotion of web-ready TV sets. McFadyen says the picture quality of internet HD TV played back on large-screen TVs is already better than terrestrial analogue broadcasts.

The US is where the action is with several sites established over the past three years with decent audiences and unique content. WebSerials.com launched the successful online series Project X, Cataclysmo and The Black Dawn, while My Damn Channel has a runaway hit on its hands with You Suck at Photoshop, a “mockutorial” series that has been viewed more than 20 million times. Catching up to it is the channel’s sitcom Easy To Assemble, set in an Ikea store and starring Hollywood actor IlIeana Douglas. Ikea sponsors the series, which now has more than 9 million downloads going into a third season, but has no creative control, only asking it represents the brand in a positive light. Easy To Assemble has already attracted Jeff Goldblum, Tom Arnold, Ricki Lake, Jane Lynch and Ed Begley Jr as guest stars. “I see this as a different way to make entertainment,” Douglas told Variety online. “I knew there was a huge fan base out there that wasn’t watching television.”

Triptych is banking on statistics that suggest online video will comprise 90 per cent of the world’s internet traffic by 2013. “You can only watch so many video clips on YouTube before the novelty factor wears off and you search for better quality entertainment,” Lomsargis says.

VideoZoo.tv will offer a diverse mix of classic TV sitcoms, he says, along with “some of the freshest new original web shows”. It’s debut web comedy serial, The Verge produced entirely in Brisbane, follows a group of 20-somethings living in a share house. It is aimed at the online buyer demographic of 18 to 35-year-olds.

But while internet TV has been establishing itself parallel to technological advances, broadcasters Nine, Seven and Ten have not been ignoring the platform. They were quick to adopt it’s benefits for promoting their shows and providing interactive and “value-added” expansions. In terms of broadcasting on the net, they only use it for “catch-up” TV, offering a fairly quickly expanding selection of already broadcast programs for download. ABC TV was the first to go proactive with a broadcast of a Doctor Who episode in April on ABC iView two days before it went out on ABC1. In June, ABC iView offered more than 250 programs and for the month recorded 581,000 visitors – a build on its 2010 monthly average of 506,000 visitors.

Actor John Jarratt, who is working on The Verge, says network TV would be mad to ignore internet TV. “To me it is just another medium I can work in and I was very excited to be in on the ground floor, basically,” the Wolf Creek star says. He doesn ‘t believe it marks the beginning of the end of network TV. “Nah, whenever there’s something new that comes into the market people talk about it taking over. Like when television came in, that was going to be the end of radio; when pay TV came in that was going to be the end of the network television. I think there is a place for everything.”

McFadyen believes pay-TV provider Foxtel logically will be the first network to adopt internet TV. “Foxtel is still running on an imitation of a broadcast network you have shows running at specific times and if you want to watch something that’s on at 3.30 you’ve got to switch your set on at 3.30 or set your iQ recorder,” he says. ”Whereas with internet-based, you decide to watch TV, then go and find the show you want. I say within two years Foxtel will virtually give up programmed entertainment and that Foxtel cable will be a fast broadband connection into a HTML based system.” In terms of content, McFadyen believes online television will be shorter, sharper and more daring. And it will be more profitable for the producer who cuts out the need for a network middle man to derive advertising revenue. Traditional networks eyeing what’s being made for online as potential programs for their channels might just be in for a shock. “Up until even a year ago, people did web shows in the hope of being discovered by network te levision,” McFadyen says. “And now for the first time they are going ‘Well, we won’t ever need network television if we can get our advertising model or subscription model working’.

“Are they going to let themselves be seduced to the dark side and put their show on network TV? My view would be to say no, if people want to see our show they’ve got to come to our website.”

It’s only rock ‘n’ roll, his smile says, and he hopes they like it.

www.VideoZoo.tv

Written by Prue Corlette

SYDNEY: Fairfax Media should close its daily print newspapers and spend $50 million giving away 100,000 e-readers to boost digital consumption, according to a leading analyst. By cutting print editions in key Sydney and Melbourne markets, Fairfax would reduce print and distribution costs and save up to $275 million per year, analyst Macquarie Equities Research says.

If Fairfax was able to retain 40% of advertising revenues under a new digital content delivery model, the company could then lift earnings for FY 2010 to $55 million, up from Macquarie’s current year estimate of $50 million, with the numbers getting better as a greater percentage of advertising revenue is retained.

“The first step towards implementing this model is only likely to occur after initial figures of e-reader penetration hit a specific target – say 10,000 – at which point FXJ would be in a position to review elements of its print and distribution cost structure with a view to removing some print runs/truck rools/shifts,” Macquarie analyst Alex Pollak said.

“The other significant challenge for FXJ is to work its advertisers around to matching the print prices for advertising for the online product,” said Pollack.

“The iPad is an interesting test case. If advertisers are happy to pay as much for iPad eyeballs [on the Herald application as it stands today] then the pure online model would have a chance.”

By Esther Shein
InformationWeek
July 19, 2010 12:16 PM

Mobile video services revenue from video telephony, video messaging, video sharing, video on demand, VoD downloads, and other video services is expected to exceed $2 billion in 2013, according to the ABI Research Mobile Video Services annual global study.

By contrast, video services revenue will only be about $121 million in 2010, according to Mark Beccue, senior analyst. But the growth curve is “very steep indeed,” he said, and will continue to accelerate through the end of 2015, which is the end of ABI Research’s forecast period.

ABI Research predicts video telephony, video messaging, and VoD will make up the majority of this revenue, while video sharing will comprise a small percentage. Video telephony — similar to voice telephone — is real-time video streaming between two 3G or 4G network connected devices, said Beccue. The study found both video telephony and video messaging have the most subscribers in Western Europe, followed by Asia Pacific, and then the United States.

One of the prime factors driving the market is the availability of 3G networks, increasing consumers’ demand for mobile infotainment, ABI Research said. As more mobile network operators (MNOs) segue to 4G, growth will continue, coupled with the continuing development of connected mobile devices, the firm said. Further propelling demand is the availability of real-time collaboration, communication, and networking from Web 2.0 services, ABI Research said.

But this growth could be limited by certain factors, including the continuing poor economic climate, which could affect usage, notably in industrialized nations, the study found. Mobile video services provided by MNOs also face stiff competition from so-called over-the-top (OTT) video services, which have strong popularity and adoption rates, the firm said. There also aren’t many video-capable mobile devices on the market and the ones that are remain “immature and imperfectly matched to consumers’ preference,” given that the industry is in the early stages, according to the firm.
“MNOs mustn’t settle for the role of undifferentiated mobile ISPs that manage ‘dumb pipes’,” Beccue said. “They should provide a variety of mobile video services and leverage strategic ecosystems until they upgrade their networks to provide quality video services.” He suggested that to optimize mobile devices, the MNOs should consider partnering with device makers and software solution providers. “This will contribute to an already significant investment, but the rewards will be great.”

If the carriers aren’t aggressive about bundling premium services and incorporating the charges into their existing mobile bill, someone else will, Beccue warned. He said he believes that when it comes to mobile devices, not many people will watch long videos since the form factor is bad, so streaming video and VoD will be more of the “snack” types of video. “So offering it as a one-time or subscription service on a mobile bill is a convenience consumers will prefer,” since they are already approved and don’t need to enter additional information. “Those APIs are very valuable,” he said.
The Mobile Video Services study focused on branded or co-branded regional MNO video services including video telephony and video messaging, peer-to-peer, and Web 2.0 video sharing and mobile video entertainment provided to mobile consumers for either a subscription-based or per-unit transaction fee. Video voice mail, chatting, ringtones, and dating are other mobile video services ABI Research expects to see emerge in the next few years or are available now on a limited basis.

AT first glance, The Verge, the story of a group of 20-somethings in a share house, looks like just another reality television show, giving the audience voting rights on plot outcomes. But Adam Lomsargis, managing director of Triptych Concepts, which produced the series with Ian McFadyen (The Comedy Company), says that’s not so. “Big Brother is not really reality TV, it’s an unreal situation that never occurred,” he says. “The Verge is all about connecting everyone in everyday life through a shared experience.”Actors, including John Jarratt, pictured, follow a script but the story can be guided by the audience using social media. Lomsargis hopes The Verge is one of many local productions to be offered by Video Zoo, the nation’s first online video portal focused on home-grown content, to be launched on Friday night and run by Triptych Concepts. “In the early days we’re looking to build a strong foundation of Australian shows,” he says.

BRIDGET CORMACK