Absence of Standards Dampens Web Video Business Prospects

Ben Weinberger, CEO, DigitalsmithsWhile Web video may be the fastest growing entertainment medium in terms of ad dollars and eyeballs, it's not immune to the interoperability challenges that more mature media industries have had to overcome.

The Internet TV business is quickly learning that for it to grow from wobbly toddler to a full-fledged adult, it'll need standards, just like the television and service provider businesses have implemented along the way. Web video technology firms, ad agencies and standards bodies are quickly coming to terms with the need for guidelines across rights management, formats, file size, ingest processes and metrics.

Online video should earn $699 million in ad dollars this year and $1 billion by 2011, according to media agency Magna. While the market is growing by about 40 percent per year by most estimates, it's still tiny compared to other media.

For Web video to take a seat at the big boy's table, it'll need a little discipline. Technology and research firms like Digitalsmiths and Quantcast are working with Web producers, ad agencies and Web publishers to develop standards in tandem with consortia like the Internet Advertising Bureau and the Online Video ROI Council.

For starters, content owners and technology firms need to work together on rights management, experts say. This is a vital area in the online world that became a flashpoint during the writer's strike of 2008, which was waged over rights and payments for content in new media venues. Rights have also been an issue for Hulu and other video aggregators that sometimes tussle with studios over how long shows and episodes can run online.

While most experts have given up on the idea of creating an interoperable universal DRM domain there are other aspects to rights management that can be streamlined and standardized. For example, the business model challenges with rights can be cumbersome for the folks managing the delivery of the video to different sites too.

"Rights management needs to be standardized so video players can operate more efficiently," says Ben Weinberger, CEO of online video technology firm Digitalsmiths. "[That means] not having to manually check asset rights or have an operator create some unique way of interpreting those rights. For example, if you knew certain music clearance rights, and those were built into standard feed or other method of packaging with the video asset, you could give consumers control to manipulate and distribute content without worrying if certain music or other issues would be violated."

In addition, technology vendors need to align with advertisers and Web sites for consistent ad formats, says Adam Gerber, chief marketing officer for online audience measurement firm Quantcast. "We need scalable third-party ad-serving solutions for the video space, so that creative can be efficiently delivered in a format-agnostic way," Gerber notes.

What's more, content creators, distributors and destinations need an easy and standardized way to inform third parties, including measurement services that deliver data about the content and player environment in which ads are being served.

The business also needs consistent guidelines for non-traditional ads, such as overlays and brand integration deals. Some guidelines in position, size and duration would help the industry manage a complex ad model, Gerber adds.

Most of these are relatively short-term issues that will likely be resolved in the next 12 to 18 months given the number of industry players focused on them, he predicts. Agencies especially are pushing for standards because the ease of use that standards afford will bring more marketers to the business.

Developing effecting reporting on the non-linear ad models is going to take more time though.

"There's a lot of experimentation going on right now, but from an industry perspective, content distribution, consumer behavior and evolution of creative and format solutions need to precede any kind of broad solution for this topic," Gerber says. "We're still in the early stages of 'telescoping' non-linear formats in my opinion. And ultimately, the TV set comes into play here: how these things evolve on the screen in the living room."

But the task of standardization is complicated because distribution sites and players are often changing specs for data feeds and file formats, Weinberger adds. "There are rarely two groups that use the same specs. We are constantly bombarded with distribution partners changing specifications on data feeds (MRSS/XML) as well as transcoding file formats. They don't all follow each other.

"This creates tremendous resource waste on all parties," he continues. "Data feeds are screaming for standardization. Imagine if a content owner could send a standard data feed to a partner and that partner would use the elements they deem necessary."

Standards would help developers too. With more consistency, developers could create unique applications to help build an audience and know the feed will be compatible, Weinberger explains. "For example, recommendations engines would all understand how to read incoming data no matter who sent it," he says. "Search engines would all interpret data the same way. Targeting engines would interpret data equally."

Beyond technology, the agencies and content producers also want easier to understand metrics on who's watching what online. Right now, there's no standard for reporting back to advertisers: some sites report return on engagement, some clicks, some views and some unique visitors.

Even the most common metric – a view – is up for grabs. Revision3 counts a view as only a full view, meaning the user watched the entire video. Others count a view if a video has been watched for at least three seconds. Still other sites start videos automatically when a user lands on the page, known as "auto play."

Most Web video experts aren't fond of auto plays. For one, most viewers don't like videos that start without their control. And most viewers turn such videos off, making the view meaningless.
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