Archive: youtube

CeBIT 2009 Q&A on the YouTube CeBIT Channel

In addition to my keynote, I was interviewed by the host of the channel. What exactly are the Web 3.0 changes that lead to a “webciety”? Big questions, small answers: I tried to pinpoint how individuals get a chance to monetize their expertise or at least make it available to a larger crowd/audience.

Rezession die beste Zeit für Social Media? [German]

Peter Turi hat ein Video – Interview geposted, dass er mit mir auf dem DLD 09 geführt haben. Darin stellt er solche spannenden Fragen wie:

1) Ist Rezession eine schlechte Zeit für Startups?

2) Wird sich bei den Startups die Spreu vom Weizen trennen?

3) Wird YouTube sevenload verdrängen?

4) Was ist das “nächste große Ding?”

Hier sind meine Antworten:

Interview Turi2 (2009): Interview with Axel Schmiegelow about his entrepreneurship (German) from curtis newton gmbh on Vimeo.

The Future of (web) TV

Reflecting on the current discussions, last at the Delphi Executive conference in Bonn, and at CeBIT which I both attended as a speaker, I recalled the very lively panel at DLD 09 around online video and social media. If you are interested in the topic, the video gives you insights with Brightcove, Endemol, sevenload and Termor Media and a great moderator, David Kirkpatrick from Fortune Magazine.

About the specifics of how we perceive the value of recurring WebTV Content, please check my Interview at ETRE in Stockholm:

ETRE 2008: Axel Schmiegelow describes the sevenload community and “The Future of TV” from curtis newton gmbh on Vimeo.

Launching HD at LeWeb08 in Paris

This interview by Charbax, a great blogger/thinker from Switzerland, included his grilling me on tech questions around HD and making me explain the business model of sevenload from an independent publisher’s point of view.

Discussion: Monetization or Reach [English]

Frank Huber recently tackled my post about Monetization in his Blog (in German)

and contradicted my views of the subject based on 2 reasons: in his opinion, YouTube has shown that “size does matter” and sevenload hasn’t followed my recommended strategy at all. Here’s my reply to his post:

1) It’s undeniable that the “natural market leader”, who’s the one that goes for reach first, is the one who can win the rat race for size. I did point this out myself in my own post. However, it would be wrong to believe that the YouTube strategy and more specifically the YouTube exit is something that can be replicated. Ex post, Google’s investment in YouTube makes a lot of sense for a company that gave up a fraction of it’s shares. But there is exactly one buyer fitting that profile, and that is Google. There’s always exactly one worldwide or www-wide dominant company per segment that can be successful with a sheer “reach” priorization and with such an Exit strategy – so it’s hardly good advice for startups to emulate that model unless the startup is entirely sure of being the first one in its category.

My argument wasn’t that reach or the number of users/clients won is irrelevant- in fact, it’s the opposite. I just think that it is healthier to achieve this reach or customer base with a working and efficient business model than without one. And XING is a good example of this: From its first day back in 2003, Lars Hinrichs (Founder of XING) was already charging 5- € in monthly membership fees, even though at the time subscription models were still widely perceived as unfeasable in the German internet market.

2) sevenload’s strategy is NOT that of gaining a gross increase in our reach at all costs. We’re following an approach of pure, organic growth (up to now we haven’t spent a single € for advertising) which allows us to best offer a differentiated platform and cover the “Long Tail” of content. This allows us to offer advertisers rates that are up to a factor of 10 greater than those of normal video portals – and of most most conventional internet portals as well. Because of this difference, we are the market leader as measured in:

- Unique Visitors (> 10 Mil real unique visitors per month),
- active registered users (> 300,000),
- average visit duration (> 25 min. per visit and registered users > 45 min),
- content volume and
- revenue (we will be the Web 2.0 company with the highest turnover in Germany this year and most likely the only one that will be profitable). We achieve all this thanks to a revolutionary advertising model that is highly effective for advertisers.

Interestingly, though gross reach was not a primary target, this strategy has led to an sustained increase in precisely our gross reach and has put us in second place in the German market in terms of gross reach, right ahead of Clipfish, despite Clipfish’s massive cross-media subsidisation by the leading German TV Channel, RTL, and a full integration in DSDS, Germany’s “American Idol” Format.

In my opinion this once again proves the wisdom of Al Ries’s main marketing theorem:

Create a new category, then dominate it

My post on monetization does nothing more than offer a methodic approach to defining the category a startup strives to dominate in business model terms rather than in media terms.

Monetization or Reach – Discussion [German]

In seinem Media-Blog greift Frank Huber meinen Post zum Thema Monetarisierung auf.

und widerspricht meinen Ansichten mit zwei Begründungen: YouTube habe gezeigt, “size does matter” und sevenload verfolge ja nicht einmal die von mir empfohlene Strategie. Inhaltlich habe ich folgende Antworten:

1) Es ist zweifellos richtig, dass für den “natürlichen Marktführer”, der als erster auf Reichweite setzt, das Spiel aufgehen kann. Auf den Fall YouTube gehe ich ja selbst in meinem Post ein. Ich warne nur davor, die Transaktion von YouTube, die tatsächlich ex post durch die Marktmacht von Google zu einem sinnvollen Investment noch werden kann, als replizierbare Strategie zu beschreiben. Es gibt immer weltweit oder www-weit genau ein Unternehmen pro segment, dem dies als Exit gelingt. Hardly good general advice for startups.

Mein Argument war ja auch nicht, dass Reichweite oder die Anzahl an Nutzern oder Kunden, die man gewinnt, unerheblich sind – im Gegenteil. Ich denke nur, das es gesünder ist, diese Reichweite oder Kundenbasis mit einerm funktionierenden Business Modell zu erreichen als ohne. Ein gutes Beispiel Dafür ist übrigens XING. Lars hat schon am ersten Tag in 2003 5,- € monatliche Mitgliedschaftsgebühr verlangt, als Abo-Modelle noch in verruf waren.

2) Unsere Strategie bei sevenload ist genau nicht die einer Brutto-Reichweitensteigerung um jeden Preis. Wir verfolgen den Ansatz, aus rein organischem Wachstum (bislang nicht ein € für Werbung) die am besten differenzierte Plattform zu bieten und den “Long Tail” of content abzudecken. Dies führt dazu, dass wir für Werbekunden um einen Faktor 10 wertvoller sind als alle anderen videoportale und sogar als die meisten herkömmlichen Internet-Portale – gemessen an unseren Werbepreisen. Mit dieser Differenzierung sind wir heute Marktführer nach Unique Visitors (> 10 Mio echte Uniques pro Monat), aktiven registrierten Nutzern (> 300.000), Verweildauern (> 25 Min pro visit, bei registrierten Nutzern > 45 Min), Content-Menge und Einnahmen (wir werden das umsatzstärkste Web 2.0 Unternehmen in Deutschland in diesem Jahr und voraussichtlich das einzige, das profitabel ist. Wir erreichen dies durch ein Werbemodell, das überdurchschnittlich wirksam ist.

Interessanterweise hat diese Strategie zu einer nachhaltigen Steigerung unserer Brutto-Reichweite geführt, so dass wir inzwischen Platz zwei der deutschen Plattformen noch vor Clipfish belegen.

Ich würde also wagen zu behaupten, dass im Gegensatz zu dem Eindruck, den wir zumindest hier zu erwecken scheinen, der Lehrsatz von Al Ries:

Create a new category, then dominate it

immer noch der beste Rat ist. Mein Post sollte einen kleinen Beitrag zu einer Methode hierzu leisten.

IPTV, Digital TV, and Web 2.0: Power to the Audience [English]

Technical, economic and social developments, which are only inadequately described by IPTV, Web TV, Digital Special Interest Channels, and Web 2.0, are leading a fundamental structural change in the relationship between consumers/viewers and providers.

Until now, the value creation of television was geared towards offering content in order to gain the highest viewer attention percentage possible and to market a portion of this attention through advertising formats (e.g. TV commercials). As long as there were only a few TV stations available, this was a successful business model.

Today however, the viewer has the power to decide when and which media content he “consumes”. He/she can actively suppress advertising, zap or click to any media environment he prefers. At the same time, technology enables active navigation of media content, empowering the user even more:

- search,

- On-Demand streaming and download,

- and interactivity of content

These navigation tools offer viewers and consumers a completely new dimension of content relevance. The future belongs to

“Long Tail” specific, on-demand offerings, with context-relevant services and interactive ad formats that are targeted and relevant

These enhanced “program formats” are increasingly determined and – even outside the context of User Generated Content – “coproduced” by the users in increasingly differentiated clusters. This is the priciple that unifies the various new approaches from YouTube to Joost to sevenload.

The YouTube Problem

As the winter of discontent of content owners and YouTube begins, a certain rumbling is growing. If you look back at the first Blog posts describing the Web 2.0 phenomenon, they often called it an illusion, overrated or a bubble. Very often it is pointed out that while YouTube was sold for $1.6 Billion, it in effect only had $15 Million in revenue last year and now a host of other problems (if you count all litigation issues and tech issues, the costs of YouTube may well be above $1 Billion or so). That is assuming, of course, that Viacom and Co. will manage to convince the courts of their point of view.

However exaggerated this view may be – it has, on a fundamental level, one merit. The YouTube Business Model, as far as it is now established, is based on an unjust usage of copyright and the equity of copyright.

Now I would be the first proponent of the theory that the internet, as John Perry Barlow put it, is “the end of copyright”. In the sense that transmitting, copying and distributing knowledge and information has become so easy through the internet that an author who wants to earn the fruits of his labor is well advised to find new ways of establishing himself as a person and establishing derivative business models off the content he produces, rather than relying on licensing fees alone. Nevertheless, YouTube does not even give that to content producers and content owners. It is like a giant attention lottery, where the very few motivate the very many, through their success stories of 15 minute world fame, to copy their endeavour and try to achieve that kind of world wide recognition. However, who of those authors, even of those who have achieved that kind of short-lived fame, has actually managed to earn money off it?

That is why YouTube lacks the value chain one needs for a viable business model. That is not to say that YouTube did not achieve something very important. It created a platform for ubiquity of video content and facilitated the exchange, commenting and sharing of that kind of content. It taught users an important lesson- that broadcasting is not the prerogative of a few publishers. From there, to a viable business model is a different step.

Google may use the YouTube technology to create Google video ads and to create a platform for viral marketing (which actually may be a sound business from the position that Google has) but, anyone trying to copy the YouTube model must fail if he does not devise a value chain, a sound and profitable value argumentation, and defines what his market is.

In essence, the markets the emerging video platforms target is the advertising market or the market for sharing and licensing content- the latter being a very difficult one. The key to monetizing that kind of tool and achieving success in that kind of market will be to define the value chain and to make it track-able, so as to be able to calculate an operating margin and to devise ways of building a business.

None of the me too(s) and copycat models of YouTube has achieved that yet.

None, except one- sevenload.

sevenload is one of the most exciting business ventures I have ever been a part of, by defining a value chain which, because of its self-reinforcing nature, we call the “value mill”. By devising a technology to track not only usage of content, but also the revenue generated by the individual video stream and by devising a way to create specific audiences that add a lot to the advertising value that a video can have, sevenload has in effect solved the 3 main problems of any video business model.

For now I don’t want to describe, in too much detail, what sevenload does as we still have to establish our market leadership. But stay tuned to see how the first viable video business model on the net will continue to be established.

Videos and More

The world is abuzz with the changes spurred by the (third) arrival of video to the internet. There is truth in the perception, but many questions are unanswered by the hype.

The way we see it, three factors will create the actual value of video on the web:

1) ubiquity: it will evolve from a feature to a standard component of every website
2) involvement /interactivity: the business models that will succeed are those that combine the emotional appeal of moving pictures with a wide and differentiated range of interests reflecting long tail segments which in their combination reflect any given markets population diversity
3) cannibalization of existing markets: there is still no new money out there, so startups have to decide who’s pockets they’re after. The Advertising World? Media Budgets? B2C Entertainment? E-Commerce -> Retail? That is the Gretchenfrage.

Incidentally, that’s the exciting part of

the board of which I just joined. they will beat YouTube in Europe, not as a copy. Al Ries in “The Origin of Brands”:

“If you want to beat the incumbent, you have to be the enemy of the incumbent”

So be it.

Rational Exuberence?

Robert Shiller identified a number of reasons why this time around, exuberence is more rational than when he wrote his landmark “irrational exuberence”. In short:

- founders are smarter
- costs for it and marketing are lower
- market demand is 10x greater

I buy that. Totally. We’ve been saying it too B). The only thing that worries me is that the GooTube deal creates valuation hyperventilation – and building an organisation that actually sustains a business that is worth more than 9 digits is a cartload of LONG HARD WORK. Let nobody forget that.

The other interesting phenomenon is that bankers and consultants are flocking back to the troughs of get-reach-fast-with-dotcom-web2.0 – and they still often need to learn to go operative – Find the shortest distance between a powerpoint slide and the real world.

Back to Top