New trend amongst advertising-financed video hosters: Quality trumps quantity
It hasn’t even been three years since the most prominent video-hosting platform for short film, YouTube, was founded. During that time, many imitators have surfaced. And even if they are not all in the black yet, they can still be considered as having established themselves, at least in terms of broad acceptance. Because millions of short videos have been uploaded in the past few years and viewed billions of times.
Following this first round, the second round in online film is now being ushered in. This time it’s not just a question of reach; it’s also about diversifying the offerings and developing USPs. And what it takes to get there is above all quality.
The mega-platforms for user-generated videos are omnivores when it comes to content. There are of course a few gems to be found in every genre, but it’s hard to overlook the fact that the field is dominated by trash. Quality is bound to be lost in the jumble. For serious short-film makers, an involvement in these platforms is only advisable under some very specific conditions, perhaps for example for viral marketing measures. And quality-conscious viewers/users who are looking for more than some short-lived entertainment quickly lose patience in the labyrinthine media jungle and give up. It’s no wonder then that more and more video hosters are promising to separate the wheat from the chaff. In this quest for quality, artists and short-film makers are once more on the ascendant. All the more so if they are prepared to offer their works free of charge as user-generated content!
Strategies of the major commercial video hosters
With their enormous growth of late, the major file-sharing platforms threaten to become their own worst enemy. It’s not only that the traffic costs for platforms that offer both free upload and download are astronomical. The uncontrolled and uncontrollable mass accumulation of user-generated content is also becoming an issue for what is usually these sites’ sole source of income – advertisers.
Mere quantity, measured for example in banner advertising by the number of click-throughs, has long since proved inadequate to cover costs. The value-added suppliers are thus racing to offer increasingly sophisticated programmes that can analyse user data and create qualified, in some cases even customized, advertising contacts on that basis. Advertising that specifically responds to the online content currently on the screen and is thus geared expressly to the corresponding target group is therefore a particularly lucrative prospect. As a case in point, in August 2007 MySpace realized advertising revenues totalling $40 million just from its new agreement with Google Search, with a projected jump to $80 million next year (Source: Paid Content, #419).
But not everything can be solved through data mining and spying on a users’ every move. The inadequate structuring of most file-sharing platforms stands in the way of targeted marketing. In some cases, dubious content and possible copyright infringements also do their part in scaring away major companies and brand-name advertisers. Which is why there’s a new trend in the advertising industry from mass market to the quality market.
Filmmakers naturally also share these reservations against low-quality mass goods. They cannot and have no desire to present themselves in this kind of environment, especially as the major social networks are increasingly populated by teenagers, fans and nerds.
Market leaders YouTube and MySpace have responded to these developments by trying out “˜protected areas’ in which only high-quality material is offered that is guaranteed “˜clean’ and free of copyright issues. Only under these quality restrictions does YouTube, for example, still succeed in securing advertising contracts that are more lucrative than those for broad-based target ads. Examples are so-called “pre-roll video ads” for which upwards of 20 dollars can be made for every thousand contacts. On the other hand, this relatively low-key form of advertising also protects platforms like YouTube from the ire of its amateur users, most of whom expect their chosen social network to be commerce-free. Vehement reactions can be expected from users if advertising starts to impinge too obviously on “˜their pages’.
Facebook (Microsoft), for instance, had to modify its new, behaviour-controlled advertising programme “˜Beacon’ just a few weeks after its launch to appease massive protests. But it didn’t go far enough in the opinion of some users, and also according to some companies, who refused to take advantage of the service for fear of damaging their brand. Beacon is a programming code that automatically alerts community members when other members purchase products offered by Facebook advertisers.
Hybrid forms: Curated channels at the established major video hosters
Another method being implemented by the market leaders is the introduction of exclusive channels reserved for selected partners. The content is provided by the partners themselves, and their profile can thus not be influenced by uploads coming from the general populace.
YouTube has signed this type of deal with partners including CBS, BBC, the Warner Music Group and The Sundance Channel. MySpace pursues the same strategy on its Beta-TV platform and has been able to take on partners such as The New York Times, Deutsche Welle and Filmmaker Magazine, and filmmakers including Michael Moore. Festivals, organizers and independent-sector organizations are likewise increasingly using these channels, for example the Spanish Notodo Film Festival or the British organization Future Shorts, which are represented on both YouTube and MySpace as well as on Joost (see also the News section).
In most cases, the partner channels feature curated programmes. Although user-generated content can also be seen, it is first filtered by a selection committee or through other operator measures. This enables the provider to sharpen its profile, which, together with higher-quality content, increases opportunities for lucrative advertising contracts. As a rule, the advertising proceeds from the channels are split 50:50 between operator and video hoster. The video hosters can then pass on a portion of their take to the makers of the films. However, most of them are not (or not yet?) prepared to give producers of user-generated content a share of advertising revenues (Tip for filmmakers: the magazine Light Reading published a survey of the terms offered by the major video hosters in March 2007.)
Quality strategies amongst the newer platforms
AtomFilms (Viacom/MTV) is of course not a new platform, but rather the most successful quality platform for short films to date, established long before the rise of the social networks, but quickly outstripped by them in terms of reach and visitor statistics. Instead of taking up the new concept of file-sharing of user-generated content, AtomFilms chose to take a different path and founded its own platform for this purpose in May 2007. AtomUploads was set up as a special branch for user-generated content and a second Internet mainstay in the social networks sector. By consistently separating the two realms, the operator enjoys the advantage of carrying on the concept of selective entries on the parent site without having to forego the increasingly popular video-hosting model. The company’s core business is not dependent exclusively on the advertising market and is still sales of short-film rights (see also “The circuitous route to the film trade” in our archive).
AtomFilms readily admits that the idea behind the launch of AtomUploads was to separate the two quality levels. AtomUploads thus functions as a barrier, but also as a way of keeping a finger on the pulse of the market for user-generated content. In the “About us” section of the website, the operator states: “AtomUploads enables users to immediately post and share their own videos, while helping us find new content that’s right for commercial distribution on AtomFilms.” But whether AtomUploads can really manage to compete in terms of reach with the incredible success of YouTube or MyVideo and to recover lost ground is doubtful. Up until now AtomUploads had been expanding only haltingly judging by the number of films, groups and discussions.
Newer platforms that don’t even try to compete with the big “˜social networks’ but which, unlike the fee-charging VoD platforms, are based on user-generated content, free playback and financing through advertising, are setting off down a different path. They rely from the start on niche specialization – whether in terms of theme or target group. Websites of this type are popping up online almost every week. They rely on the business model of the “long tail” (“The Long Tail: Why the Future of Business is Selling Less of More”, Chris Anderson, editor-in-chief of Wired magazine).
These platforms market themselves with their own special qualities and USPs. This includes better playback quality, for which they have often developed their own player software for high resolutions and rapid reception. This more upscale approach also meets the demands of filmmakers who do not want to see their works on the big all-round platforms for reasons of technical quality.
Video hosters who want to position themselves in a niche or a particular quality segment must actively go out and search for content or at least apply different strategies and more complex processes than the big file-sharing platforms that let users upload anything and everything, sight unseen. The simplest and most effective model for acquiring content is still to hold a competition with prize money in which the “community” acts as (unpaid) audience jury and makes a pre-selection, which is then handed on to an editorial team or more or less pre-eminent professional jury for the final selection of the prize-winner.
Example: “Babelgum Online Film Festival”
The new IPTV network Babelgum invites filmmakers to take part in a competition encompassing seven different categories: “Looking for Genius Award” (up-and-coming filmmakers), “Short Film Award” (films up to 20 minutes long), “Documentary Award”, “Animation Award”, “Social/Environment Award”, “Spot/Advertising Award” and “Music Video Award”. A prize of no less than 20,000 euros awaits the winner in each category.
In order to achieve a certain quality level, only professionally produced films are eligible (entry deadline 15 February 2008). After a pre-selection by the viewers, a professional jury will choose the winners. The organizers were able to convince Spike Lee to act as branding figurehead and VIP jury chair!
Babelgum is entitled to release any film submitted. The filmmaker thereby commits to meeting certain requirements and usage restrictions. The small print states for example that: “In submitting a film to the Babelgum Online Film Festival the rights owner approves its broadcast online on the Babelgum platform for a 13 month period, from February 2008 to March 2009. During this term, the film must not be broadcast online through similar peer to peer streaming web TV platforms.”
The Babelgum Networks enterprise behind the competition is an Internet television platform with customizable channels for users. Motto: “Every audience has got a niche”! To broadcast its videos, Babelgum uses a peer-to-peer technology developed for music and film file-sharing platforms. This means that receivers are tied into a distributed network by means of proprietary client software and thus themselves become senders. This allows Babelgum Networks to considerably reduce the expense of traffic, i.e. to shift the burden onto the users.
In addition to a Web TV programme, Babelgum also offers content owners protected channels for online marketing of their products. Among the major customers taken on so far are the Associated Press, BBC Motion Gallery, Reuters and the Ministry of Sound TV. Founded in 2005, the company is headquartered in Dublin with branch offices in France, Italy and Great Britain. Babelgum has been online since March 2007.
Example: “Hobnox Evolution Contest”
The online entertainment platform Hobnox invites artists from the fields of film, music and urban culture to present their work on its site. Here as well, the users select their favourites in a first round and the jury (consisting primarily of pop-culture figures) then makes the final decisions. Hobnox offers an award of 25,000 euros to the winner in each category. Artists residing in Europe or North America are eligible to participate (entry deadline 31 January 2008).
The organizers call the Evolution Contest an “artist promotion programme”. But at Hobnox as elsewhere, the competition does not only fulfil the purpose of viral marketing for the website (which in our case is evidently already working :-), but is also a way to acquire content. The small print notes that: “The files and artist profile remain on hobnox.com”; but, fair enough, also that: “they can be taken offline again at any time or deleted from the user account.”
The Hobnox GmbH company behind the competition plans a platform that will also function as a marketing platform “by creatives for creatives”, along with offering Web TV for young people interested in urban culture. As mediator between producers and audience, Hobnox acts like a kind of virtual agency, which however merely places a structure at filmmakers’ disposal, i.e. neither purchases rights to the works nor sells them and gives producers a share. Hobnox hence does not aim to become a label, but rather to profit from the advertising market.
With this end in mind, Hobnox produces its own Web TV magazine and offers editor-curated user-generated content on various target-group-oriented channels. The complete portal is to be launched in February, including the winners and other entries in the Evolution Contest.
The founders of Hobnox come from the multimedia, television and music industries. They work in offices in Germany, Great Britain and the USA. Managing director of Hobnox GmbH is Alfred Tolle, former CEO of Lycos and executive producer at private German TV channel SAT1.
Conclusion and tips for filmmakers
It would be nice if the online film scene would become a bit easier to navigate thanks to increasing diversification and specialization, or at least offer some orientation with regard to what level of quality can be expected. In fact, however, it is becoming increasingly difficult to differentiate between file-sharing and video-on-demand, Internet TV and video hosters, or B2B and general audience platforms. This means that it is also becoming harder for filmmakers to decide to whom they should entrust their works.
Which platform or marketing route is best must be decided on a case-by-case basis. In general, we can only urge filmmakers to read the small print in the FAQs, contracts or competition requirements very carefully – even if this takes some time, as the texts as often several pages long and include plenty of legal jargon. On the other hand, suspicion is in order if only brief specifications are made or even none at all – except of course in the case of websites run by non-commercial amateurs.
It is also important to ascertain which business model a particular website is based on. Once you have understood the business model, it’s possible to weigh the pros and cons and decide either for or against it. But if you do not understand how the operator is making its money, then we can only advise against participation or involvement – here again, with the exception of amateur websites.
The current trend toward quality rather than quantity is certainly to be welcomed. It must be kept in mind, though, that on all advertising-financed platforms popularity will ultimately remain the final criterion rather than artistic quality. An obvious sign of this is the rankings on the video-hoster sites: the Internet counterpart to television ratings. One thing is clear: Any platform that depends on advertising has to work in a commercially viable manner, and on the free market as in the business world, altruistic conduct can only be a pretence hiding the true motive.
It would be wonderful to see more culturally aware distribution platforms for short film on the Internet in which artistic quality counts for more than viewer ratings. But as long as this remains a far-off dream, filmmakers will have to play by the rules written by the commercial providers, while at least making sure to get a “˜good deal’ out of it for themselves.
Short film online – The Golden Age of the Shorts? Part 1 (10 September 2002)
Making the stock market charts with amateur short films (27 October 2006)