Technology

(WBZ) Join host Josh Bernoff of Forrester Research and some of the leading thinkers in digital media who reveal their insights and predictions into how changes in people's behavior are rewiring the media world. In this series, local leaders share their perspectives on how technology has transformed the media landscape, how consumers are leading the charge with social media, and what the media world should do to stay on top.

Click below to Hear More from our Leading Guests:

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 "Can Commercial and Consumer Content Co-Exist?" - Henry Jenkins, MIT
 "Fulfilling The Promise Of The Web" - Jeffrey Rayport, Marketspace
 "Building a Better Customer Relationship" - Larry Weber, W2 Group

The Massachusetts Innovation & Technology Exchange (MITX: "my-techs") is the region's premier industry and professional organization dedicated to support and promote technology and innovation in New England. MITX focuses at the intersection of technology, marketing and digital media and its community is comprised of individual and companies that work in the digital industry.
Watch individual segments of Hilmi's interview below:

Why should a media company care about online video?
The future of broadcast TV versus online video
Are large media companies really ready for online video?
Can traditional media make money as consumers shift online?
Should companies jump into online video with both feet?
How should a marketer take advantage of online video?
Mobile phone video versus online video
Define the media company of the future

Josh Bernoff: Hi I'm Josh Bernoff from Forrester Research. We're here with Hilmi Ozguc, founder and CEO of Maven Networks, a leader and broadband video technology for leading media companies out there on the internet. Let's start with this; assume I have only got 2 minutes, tell me why as a media company I should care about online video.

Hilmi: Well you should care because a lot of your audience is going there, especially younger, more desirable demographics to advertisers. You should care because your advertisers are demanding that you now go where the audience is going. And finally you should care because the technology and the broadband adoption are at a level where you can do some very interesting things, both in terms of providing entertainment and providing value to advertisers and your consumers at the same time.

Josh: So, how does this actually fit in with TV? What's the future of broadcast television versus online video from where you sit?

Hilmi: That has been the debate that's been going on for the last 10 years. We've been hearing about convergence and how these worlds are going to come together for such a long time. But it's now finally really happening. I mean enough homes now have broadband connections. The technology base is there. And most importantly, major media companies have made the bold leap from looking at the internet as a source of piracy and cannibalization to one where they can truly make serious money and generate large revenue streams and create large audiences around their programming and have another outlet for what they do very well which is to create popular programming and then be able to sell that to advertisers. So what the future looks like initially will be what we are seeing today, a lot of these television broadcasters making content readily available on their websites. Typically that's the show that will have aired last night and making it available today to look at. There's also a lot of snacking going on, so people looking at 5, 10 minute clips, a certain segment of the Leno show for instance or Letterman, whatever. And we're going to see that expand to longer and longer form content, more consumption online. But what will be interesting is this won't be just a repeat of TV as we know it, meaning it's not just going to be a linear experience where you see the same stuff on TV, online. Interactivity comes into it now and community comes in to it and social networking comes into it, and this is where it's going to get very interesting. People will still be looking at their favorite shows maybe, but they will have discussions about it, they will have debates about it. They will have all sorts of sharing and participation and response to what is on television. And this makes it a real two way media. So getting consumers into it is a very important aspect of it. Getting micro-audiences really, the enormous fans and advocates of a certain story line, a certain actor, a certain story becomes a very important part of it, And along with that, will be just a multitude of places where you can enjoy this content.

Josh: So, you work with large media companies all the time, people like NBC, CBS, FOX. Are they ready for this? Are they really ready to embrace this? Give me an idea of what really is going on in the mind of a major media executive faced with this "online video phenomena".

Hilmi: I mean, I think it varies. Some companies are further along; others are taking more of a wait and see approach. The most progressive ones are embracing it whole heartedly. And they've brought enough talent into their companies who come from interactive, the internet side, and there's some very interesting and lively debates going on inside these companies. Should we put our stuff online? I think they are beyond that now. They need to take their archives and their current shows from television and now put that online. But the big question is "how do we best monetize?"; that is what they ask themselves.

Josh: Do you have a case study of somebody who's done this pretty well?

Hilmi: Yeah, I mean, what I would consider a very leading edge provider, is CBS's CSTV, College Sports Television, which is a cable network in a traditional sense, but also is a very significant investment online. And they have over 100 schoolsand universities that are a part of their network, who are essentially affiliates who provide content on college games, Ohio State football, Notre Dame, a variety of sports so, a community of alumni and students who are completely into what their school sports are all about. And they have very aggressively now taken this online. We've worked with them over the past summer and brought to bear with what I would consider to be one of the most advanced interactive sports channel of it s kind on traditional TV or online. It is an environment in which you have hundreds of games live and archived that you can look. And not just games in itself, but interviews with coaches, the players. You can share all this content; you can really create a community around this so it's a very powerful experience.

Josh: So, this is really interesting to talk about but a lot of people want to know can I make money from this? Is there enough revenue generation to make up for what clearly is going to be erosion of traditional media as people spend more time online?

Hilmi: Well as you know TV advertising in this country alone is a 60 billion dollar a year business and this is beginning to shift over and needs a place to go. Right now the number one problem with online video advertising is there is not enough inventory. There's such demand, there is such demand from advertisers to take their TV commercials as the first step just repurpose them and use them online and anyone who is offering this is sold out. So what all these media companies, at least the ones who have embraced it early are scrambling to do is to create inventory, create more programming more audiences around which they can sell ads, so the trend is definitely there, the advertising money is flowing, the problem to solve now is how do I create hundreds of new channels new programs online around which I can sell that ad.

Josh: Well, with all this expanding demand for advertising, I know people are jumping in with both feet probably not thinking about it to much. One of your executives told me that you are now getting and can deal with requests, to get up a video site in 2 weeks. I guess now the question in my mind is, if you spent 2 weeks to think about putting it up, how good is it? Is this really the right thing for people to be doing with 2 weeks of thought behind it?
Hilmi: Well I think some of the stuff has been in the works for a while, and a lot of these companies already have great programming in their archives. It's already digitized, it's already tagged with metadata, it's ready to go, it's packaged up. And at some point somebody, as I've mentioned lively debates throughout these companies, all the way up to the board room, typically someone will walk about of a board meeting with that mandate of to figure out how to make money in 2 weeks, or three weeks and they come to us. And that's what we help them with. We've been fortunate enough to be working on the fundamental technologies that enable us for the last 4 years, so we're ready to go to. So when you bring the technology and the content together, you can indeed do some very interesting things in a matter of weeks. Some of the more sophisticated uses like the CSTV example I gave you will take a few months.

Josh: So we've talked mostly about media, and you've talked about the incredible demand for advertising but I'm also interested in what marketers should do here. So I know you've worked with marketers in the past, people who have movies to sell or soft drinks. What's the appropriate strategy for a marketer now to take advantage of the online video opportunity?

Hilmi: Well that's been an evolving story as well; I mean marketers in a lot of ways have been ahead of content providers in embracing the online video medium, and jumped in with both feet. While the big broadcasters were still debating is the enemy friend or foe? So some of the early experiments were companies like Mt. Dew, were some of the companies we worked with part of Pepsi Co, essentially shooting its own movie about some skateboarders and snowboarders and putting it in a whole website creating a whole entertainment experiments around that. Another example was Nike around the World Cup Soccer last summer, bringing entertaining clips all around the Brazilian teams and players and so forth. And I would say those were early experiments, they did not garner enormous audiences. You're not going to get a CSI-like audience around what a marketer does. Now Budweiser and others have continuing efforts, and that's a game for the biggest marketers with deep pockets and the ability, whether internal or through their agency, to create entertainment programming and that is not a network skill set for most brand marketers. I think we're going to see the top 20-30 brands experiment a while longer. But as entertainment properties become more mainstream on the internet, they are going to do what they do on television, which is embrace those and put their advertising and marketing messages around entertainment programming that does garner those CSI type audiences. So I think it's an experimentation that is going to collapse in with and merge with what the entertainment companies themselves are doing and I think we will see offshoots of that in the future. This is a wonderful opportunity for major brands to have more of a relationship with a consumer than with just a 30 sec commercial. So for those who want to have an interactive channel where somebody can really explore this new car, or this new consumer electronics product that's coming out, learn all about HDTV for instance, I think it's going to be a good medium for those companies.

Josh: So, let's think a bit about what you've said. You've talked about CSI, huge audiences for things like that and Desperate House wives and yet now if you look at the evaluations in the stock market, companies like Google, especially with YouTube, they're really the ones that are aggregating these large interactive audiences. And in some cases by stringing together the other many many many small properties as opposed to one huge blockbuster. Are we seeing a shift? What's going to be the more powerful company 5 years from now? Will it be Disney or Google?

Hilmi: Well I think as so many times, content is king. The power lies with whomever's got the content, and content companies have always historically distributed their products via a multitude of channels. First it was over the air then satellite then cable now over the internet. I think we will see that continuing even with internet distribution, they will syndicate their content to portals like Google and Yahoo, but they will also have a direct consumer experience, and ultimately that's the ones that's highest margin for them. It is the one that gives them the most brand control. CSI has a certain brand around it and they don't want to lose that or have it be subjugated to say Google's branding around it. And it also gives it data, feedback on what consumers are doing with this content, how are they interacting with it, what do they like and not like. All of those are very valuable to them. So ultimately direct to consumer channels from the big content companies will coexist with secondary distribution through intermediaries. It's smart business.

Josh: So there's one topic I definitely have to touch on here before we finish up, and that's mobile phone video. There's an awful lot of talk about that; I'm a little skeptical of how much value you can get from a screen that large, but what is your perspective on the value of that sort of video distribution versus online which is clearly taking off like mad?

Hilmi: Well I share your skepticisms on really small screens, but I think when you look at an iPod screen or a Treo screen, that is more acceptable. You can actually sit there and follow a program or sporting event and if you are stuck somewhere waiting for the subway or you're on a train, that is better than nothing. So if the alternativeis nothingthen that's pretty good. But if the alternative is my 50 inch HDTV in my living room, that's the one I'm going to use. So the interesting thing with broadband video is people now are essentially glued to their laptops and computers whether they are at work or at home. So you are going to reach a lot more people with that who actually have the ability to sit there and look at something that looks pretty decent on a 15 inch screen or 12 inch screen as opposed to a tiny screen. And that's also what advertisers are going to put their money into. Right? Nobody wants to advertise their brand on a tiny little screen where you can't see things. So I'm skeptical; I think that there will be some plays in that area, I know it's very hyped up, but you do need a certain amount of real estate for all this to make sense.

Josh: So, last question here, how does it change media companies now to be distributing through all these different channels? what really does the media company of the company of the future look like?

Hilmi: The media company of the future is going to look very different than what one looks like today. They will have to really embrace where young audiences are spending their time, how they're consuming media. I think that trend has already started. We see that in things like NewsCorp's purchase of MySpace making that the core of their online strategy. And that will continue to evolve and go forward. We will continue to see very lively debates between the traditionalists in these media companies, who come from a 50 year background in television as we know it, as well as the young rebels, if you will, who are advocating a very aggressive interactive strategy for these companies. But the media company of the future is one that is distributing content over a multitude of devices a multitude of ways. They will be licensing it to others, they will be doing a lot of it themselves, but interactivity, social networking, community measurability, targetablity, those will all be a part of their DNA, where that isn't really for the most part today

Josh: Ok, thanks very much, just heard from Hilmi Ozguc from Maven Networks about the media world of the future. I'm Josh Bernoff.

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