Online TV for a Fee

While the majority of content is free online, companies are moving toward fee-based models in an interest to grow the space’s content while building more lucrative business plans.

• As they project the DVD business to peak in 2013, Netflix’s Watch Instantly subscription service is the brand’s initiative to become a leader in streaming content. With content spanning both movies and TV shows, the service starts to creep into Hulu’s market, but the notion is that Netflix will maintain dominance in the movie space. And consumers are showing strong interest. Netflix just reported a 46% year-over-year growth in unique visitors to the website, citing the new streaming service as the driving force.
• Hulu just announced last week a new monthly subscription model, Hulu Plus, that adds backlogs of content (did you know that 90% of network TV content is removed in six weeks or less?) and brings access to iPhones, iPads and certain HD TVs. There is added capability and depth of content, but to keep prices low as they navigate this new space, this model still includes advertisement.

Online TV on TV

We’re not just seeing TV content show up online; we’re seeing online content brought to the television screen. Just as Hulu expands service to the television, other brands are also looking toward the black box as an opportunity for online video distribution.

• Google announced its Google TV last month, to be launched in the fall of 2010. Google TV is a connected TV set – instead of using your guide, users will be able to search both TV content as well as online content – bridging the platform gap and making all content watchable from the television.
• Apple is redesigning their Apple TV solution to be more compatible with streaming capabilities. The current system limits users to iTunes, but as the space grows, Apple is looking toward an app store methodology to incorporate and leverage other streaming businesses such as Netflix and Hulu.

With TV coming online and online content going to the tube, expect to see some changes in the online video space. With more brands moving to online distribution, marketers will have more options for ad placement and branded opportunities as the space gets competitive. And the online video product is getting a facelift as it competes with higher-quality television programming; marketers and brands should be ready to elevate the production quality of online content as the lines blur.

Video consumption is changing, and online video is here to play. Look for increased adoption, new opportunities to reach consumers and new products to come out of the evolving space. Viva la online video.

Here’s the summation of the recent events as shouted by mussed-hair newsies on streetcorners:

EXTRA, EXTRA: PUBLISHERS REJOICE OVER IPAD.

Magazine publishers continue to worry about falling circulation numbers, hoping this faddish Internet disappears as if it were a bad dream. As such, they’ve been working hard trying to re-invent themselves, with their latest scheme surrounding Steve Jobs’ iPad. The device, with its blend of old media charm and new media interactivity, may well be the savior of their medium, which has driven them to start experimenting with iPad apps.

What follows are three of the best examples and demonstrations that we’ve seen:

Wired was first out of the gate to launch a really neat iPad app demonstration:

Some have started to experiment with what the iPad means for magazine covers

And others still have been experimenting with what feature stories could look like.

Conde Nast has even made a commitment to build iPad apps for each of its top publications, leading the charge of “let’s go save our medium.”

From everything we have seen so far, it appears the iPad has become the future-hope of magazines to become relevant in the digital age.

With all the invention happening in the space, there is a surprising lack of reference to how advertisers expect to interact with this new medium. Unilever, Toyota Motor, and Fidelity Investments have already signed on to $200,000 marketing programs with Time magazine, and the most we know about what those deals entail is that they’re full-page ads.

We are left with merely a lot of questions:

What new ad platforms will rise from the ether?
What iPad capabilities will we be able to leverage?
Can we link over to our own apps?
How much fun can we have?
How standardized will the offerings be?
And maybe most importantly, who will actually pay for and use these apps?

There are plenty of questions rising from what we’ve seen so far in the magazine on eReader space. One thing is for sure: As magazines reinvent themselves on the iPad (or whatever supercharged eReader wins out), so will print advertisers.

So, as our clients begin to plan their strategies for the iPad, we’ve pulled together a few ideas of how we’d like to start:

1. Reach out to publications, especially those we run in regularly. Ask if they’re planning on building something for the iPad; ask what kinds of opportunities there will be for advertisers.

2. Be a part of a pilot program. As we saw with iPhone and Facebook apps, a novel technology experiment rewards those advertisers that get in on the ground floor. Also, publishers will be greeted with enough skepticism and uncertainty that we can also get in for cheap.

3. Build creative executions that push the available technology. Don’t be satisfied by repurposed or limited creative. This is a unique space which will deserve a unique execution.

4. Know what other brands are doing in the space. See how they leverage the technology and the audience.

5. Watch iPad sales and audience data. While the technology is really cool, we, of course, need to make sure someone sees it. The marketplace as a whole is still pretty unsure about the iPad.

M-Pesa
In 2007, M-Pesa was introduced in Kenya as a money transfer system through Safaricom.  Using a similar model to PayPal, members are able to transfer funds and manage their account through a mobile device.  Leveraging the network effect, M-Pesa created a faster, more economical way for Kenyans to conduct business, but there were a few unforeseen outcomes from the introduction of the program.

First, this proved to be a safer way of doing business.  Rather than traveling with cash in hand or storing cash locally, entrepreneurs mitigated the threat of theft with virtual money.  M-Pesa customers felt safer about their money.

Second, mobile access helped stabilize market prices.  Mobile changed the competitive landscape giving participants better tools for monitoring the free market and actually reduced price discrepancies.

Lastly, M-Pesa opened up an entirely new segment of customers – the “unbanked.”  Although the service started as a complementary bank feature, 40% of service users have never banked before.

What started as added customer service feature actually increased the size and efficiency of the market as a whole.  With 8 million subscribers (that’s 1 in 5 Kenyans) and an average of $10 million in transactions daily, M-Pesa has revealed a substantial opportunity for mobile penetration and growth in developing markets.

But what about developed markets?
The developed world isn’t going to see a economic transformation in the same way emerging markets might, but major players are taking note and moving forward.  Established and start-up companies are testing the waters in mobile money transfer (ie. PayPal Mobile), but the future is looking toward point-of-purchase transactions with the mobile device.  This idea, coined contactless payment, entails scanable hardware embedded in/on the device.

At the Cartes Exposition in Paris two weeks ago, Visa showcased it’s contactless system with Nokia that will be introduced in the next year.  This system allows items under a certain price threshold go through immediately and for items over, the user will be prompted to enter a PIN number for added security.  Another similar system,  Mastercard‘s PayPass mobile program partnered with Blackberry, is currently pilot testing in Canada.  And American start-up Bling Nation is working on a smaller scale to create local networks of banks and participating retailers with mobile device transaction capabilities.

As larger programs are being tested and introduced outside of the US, it will be interesting to see who will tap the American market first.  Although safety and security are hurdles to adoption, the idea of an m-wallet is showing appeal and pushing companies beyond transfer and into transaction.  Fear not developed world, our phones are about to get a whole lot smarter.

1. When people ask what they do for a living, they’re all likely answer the question by describing the type of company they work for.
2. If any of them throw caution to the wind and answer with the name of their job, the most common response is, “Huh?”

Peter Morville and Louis Rosenfeld, who literally wrote the book on information architecture, explain the awkward social interaction this way:

“Their eyes glaze over. They nod politely. Then comes the desperate attempt to change the subject. ‘Hey, speaking of information architecture, did you hear tomorrow’s weather report?’”

What is information architecture?
Most of us don’t know how to build a house by ourselves, and we wouldn’t even try. Even so, we still provide requirements that affect the end result. We can communicate these needs in terms of the physical structures (e.g., the number of bedrooms and bathrooms) or in terms of our physical and psychological needs (e.g., how much space we need to accommodate a growing family.).

This needs-defining exercise can help the builder decide not only what physical structures to build, but also their relationships. A builder might say, for instance, that the kitchen should always be adjacent to the dining area, or that bedrooms, to ensure the safety of the family, should always be downstairs, or that steel beams should be used instead of wood.

This is sort of how information architecture works. Web designers practicing this discipline must determine, based on the needs of the project, what the constructs (content) are, where they will come from, how they’re created, and the relationships that should exist between them.

How has it evolved?
Unlike in designing a house, however, on the Web it’s possible to jump from one area to a completely different area immediately. It’s even desirable when doing so will help someone solve the problem that brought him to your website in the first place.

Website design is about more than organizing chunks of information logically (which is still an important part of the overall process), but about planning holistic experiences through which people can solve their problems or find something they want or need.

Even though in the early days of the Web, jacks-of-all trades, art directors, or programmers handled these jobs, as websites become more complex, the industry has increasingly looked to specialists to fill this function.

They call them “experience designers,” “experience planners,” and, if they don’t deliver the results the customer wants, some other things that we won’t reprint here.

Much like the architect’s responsibility in building a home, the experience planner on a web project must take multiple problems and communicate the means by which those problems can be solved to various members of the team, and to the stakeholders themselves, not only be describing the structures, but also by defining how they work and the path through which people should and are likely to encounter them.

When you don’t need a specialist
Whether you plan for it or not, experiences get designed. It is either going to be a good experience or a bad one. A good experience reinforces the brand, and a bad experience can harm it. So the short answer is it doesn’t matter if it’s a specialist who designs the experience or someone who wears multiple hats. It only matters that the experience solves the problem in question – a problem that was correctly identified in the first place.

When the problem, solution, and/or risks are relatively small and already clearly defined, there’s usually no need to call in a specialist. Just ask a few average people what they think, and you can pretty much figure out what works and what doesn’t.

Blogs are good examples of websites where calling in a specialist might not be the best use of your resources. They’re pretty straightforward (though if your design team has a tendency to get too clever by half, getting some feedback from a specialist as a gut check couldn’t hurt).

When you need a specialist
On the other hand, specialists are particularly useful for complex projects, because it gives design teams the ability to work out the details of how a site should function before getting into the nitty-gritty details of how it should look.

This way, teams can decide if the way it functions can actually solve the problem before they must decide if it they’re using the right colors or if it’s pretty enough.

Blog platforms are good examples of websites that would be impossible to create but for the work of someone who was an expert at architecting information, it’s flow, and designing experiences.

The ugly truth
Any time you must deal with influencing human behavior, planning any experience around ergonomic, technological, psychological, social, and business requirements with any degree of certainty in a vacuum is tricky (if not impossible).

Therefore, it’s important to do a good job identifying the problems beforehand and to institute continuous testing methodologies to make sure you’re solving the right problems.

Also, a lot of people can have some very good answers – even if they’re not specialists. For even though the industry is recognizing information architects and experience planners as specialists, the truth is that they got there by first being generalists who, at some point in their careers, took an express interest in mastering the art and science of turning abstract concepts into concrete, intuitive, and persuasive solutions.

So the next time you’re on a website – especially a big website – and you’re able to find what you’re looking for, be sure to drop a note to the site’s owner to thank the information architect on your behalf. If you also happened to enjoy the entire experience – you found it intuitive, easy to understand, and even pleasurable – thank the experience planner, too.

And then grin with the knowledge that the people who monitor that kind of communication probably don’t even know what the heck you’re talking about.

Until now. Who’s heard of augmented reality? Well if you haven’t, you will soon. In short, augmented reality adds information and meaning to a real object or place. Unlike virtual reality, Second Life or any of those “virtual worlds”, it takes a real object or space and uses technologies to add a virtual world around it, further blurring the line between what’s real and what’s computer-generated.

Early applications of augmented reality adds graphics and sounds to the natural world – and right this minute, thousands of computer science students are playing with its possibilities in interacting with smells and touch. Video games will most likely drive the development of augmented reality, but we’re already seeing advertisers tap into this technology. Using those little glass eyes at the top of our screens.

Check out these examples below that explain how this technology works or if you have a webcam, click here to see for yourself to see how GE is touting its new smart grid using augmented reality.

GE – Plug into the Smart Grid

Topps 3D Live Trading Cards

Once you’ve seen how the technology works with the two examples above, you’ll begin to understand how the next video works. Keep in mind, the people live in the audience cannot see the virtual elements in his presentation, but anyone watching a video feed of it, can.

A Unique Way of Presenting Company Financials

So what say you, advertisers? This technology is available, incredibly engaging and high-profile brands are already receiving enormous buzz by being the first to play in the space.

It’s certainly not at a point where it’s appropriate for every brand out there, but if GE can use the technology to send a simple message that they’re committed to advances in wind power, then there might be an opportunity for your brand as well.

OnLive, a new streaming video game service, is sweeping the gaming industry off its feet – or at least trying to. Through the use of cloud computing, they’ve created a platform that could allow all video games to be immediately accessible to gamers, even those not interested in buying a super-powerful PC or next-gen console. The technology is pretty cool.

The most amazing thing about OnLive’s user experience though, isn’t the immediate access to games, rather the immediate access to other gamers. OnLive has effectively created a brand new gaming social network.

What OnLive has recognized is that creating and maintaining social connections is a type of play, and is an important piece of the gaming experience that has been underserved by the current generation of consoles.

For example, simply search for Guitar Hero on YouTube.

The majority of what you probably found was a lot of videos of people playing those songs that people consider “impossible.” Almost like a rock star social club. The videos are meant to brag to their friends and the larger Guitar Hero community online. The only problem is that these rock stars have to reach outside of the game to share, rather than making bragging rights an integral part of the game.

Nintendo also had this insight when they launched the Wii. The entire campaign was based around the shared experience of the Wii with your friends and loved ones.

Although they recognized the importance of those physical connections, Nintendo completely ignored our virtual ones and failed to facilitate a useful way of sharing games or even playing with your friends online.

This is what OnLive aims to remedy. They have allowed gamers to create friendships, share videos, and watch their friends play across their entire library of games. If and when they combine this technology with a partner like Facebook Connect, OnLive will have finally allowed gamers to dive headfirst into the world of social gaming.

And for the first time ever for a major event, more of those people were watching online than on the tube. While it didn’t break any general internet traffic numbers, it far surpassed any live, streaming video. CNN.com alone had served 21.3 million streams, beating it’s previous Election day record of 5.3 million.

In addition, post-event viewership of Inauguration clips is threatening the offline TV number, 37.8 milion, on sites like YouTube and MySpace Video. The White House upload has just over a million views, the CSPAN upload has 3.3 million views, and, as of today, there are over 1,300 other clips on YouTube. Those numbers will continue to grow over time, and the post-event viewership will eventually overtake the live viewership.

One of our expectations this year is that we’ll start to see a real turf war between text and video online. YouTube has surpassed Yahoo as the number two search engine. As a piece of this, one of the most obvious evolutions is the adoption of long- to super-long form video content, streaming and otherwise.

Politics aside, what we saw was a watershed moment in online video, where tens of millions watched very long-form content through their computer screen. We go as far as calling it the first major online event (as opposed to an offline event that repurposes its content online).

In addition to the Inauguration, programs like Dr. Horrible’s Sing Along Blog are offering long-form content shot specifically for consumption online (and actually making a profit). In the middle of last year, YouTube lifted its 10 minute restriction as they faced increasing competition from sites like Hulu, who’s average video length is 12 minutes.

With 2.8 billion searches each month on YouTube, and rapid adoption of its many forms, we should have more conversations around the growth in importance of video online.

How do you expect this growth will effect event-based TV like sports and award shows? What kinds of long form content do you think we’ll see this year that we haven’t before?