The Next Net

Beyond YouTube

As part of Business 2.0's March issue Next Net cover package, I wrote a feature about the rise of Internet TV, which covers Revision3 (producer of Diggnation), Joost, StumbleVideo, and video search site Dabble.  As longer-form and serialized shows begin to be produced for the Web, YouTube's clip culture won't be the only game in town.  Excerpt:

Call it TV 2.0, Net TV, or whatever you like: The building blocks of a new Web video industry are falling into place.

New forms of programming and distribution promise viewers an infinite menu of content, new advertising models are in the works to funnel all that new viewing behavior into streams of cash, and new search technologies are stepping up to, as [Digg and Revsion3 CEO Jay] Adelson says, "help you choose what you want to watch, when you want to watch it, and where you want to watch it."

The idea behind this latest foray into Web television is simple: All it takes to draw a decent-size audience these days is a videocamera, some computers, and a bit of talent.

One of my favorite tidbits from the story is that when Diggnation co-anchor Kevin Rose recommended a special Diggnation sampler set of Adagio tea, the online tea site sold $100,000 worth of tea (which represented a 25 percent boost to monthly sales).  Talk about the power of product recommendations.   

Here is a CNNMoney video we did about Diggnation and Revision3, and Reuters TV came by my office yesterday to interview me about Joost (where I talk about Joost's need for more mainstream content).

The Next Net 25 (2007 Edition)

For Business 2.0's March cover story, we've put together our second annual Next Net 25 list of startups that are pointing the way to where the Web is going.  It's our way of cutting through the Web 2.0 clutter and highlighting the companies we think have legs. 

Last year's list, which included Brightcove, Digg, Last.fm,Six Apart, Technorati, and Zimbra, is holding up pretty well.  In fact, Google ended up buying three of the companies on that list (YouTube, JotSpot, and Writely). 

Here's this year's list:

Social Media
StumbleUpon
Bebo
Meebo
Slide
Wikia

Video
Joost
Blip.tv
Dabble
Metacafe
Revision3

Mobile
Fon
Loopt
Mobio
Soonr
Tiny Pictures

Advertising
Turn
Adify
AdMob
Spot Runner
ViTrue

Enterprise
SuccessFactors
Rearden Commerce
Janrain
Logoworks
SimulScribe

Adify to Power The Washington Post's Blog Ad Network

The Washington Post Newsweek Interactive, which announced last summer that it would create it's own vetted blog network, has signed up with startup Adify to manage the network and serve up ads across it.  Adify lets publishers roll their own ad networks across different niche categories like travel, health, technology, and politics.   The Washington Post will sell ads on the blogs using its existing sales force and relationships with advertisers.  Lufthansa is the first advertiser to sign up.  Adify CEO Larry Braitman tells me:

We are seeing that a lot of the traditional media companies as they shift into becoming digital media companies are looking to take their properties, expand their reach and become category killers.

So far the Washington Post has signed up about 100 blogs into its sponsored network, including Mr. Wave Theory, Profitable Signals, and Slacker Manager.  But it is considering a total of 1,500, which could increase by 40 to 50 percent the number of monthly pageviews  beyond its own sites where it can serve ads.  And since the ads can be served into targeted content categories, Braitman says the ads command three to five times as much as a run-of-the-mill remnant ad on one of the bigger ad networks like DoubleClick.  Instead of $1 to $2 CPMs (cost-per-thousand ads), he thinks his nichebuster approach can get $8 to $10 CPMs. 

Does Big Media Need YouTube?

One of the big assumptions behind Google's $1.65 billion purchase of video-sharing site YouTube last year was that it would be able to use its heft to settle any copyright-infringement lawsuits and strike advertising deals with the big media companies whose pirated TV and movie clips drive much of the traffic to the site.  Increasingly, the big media companies are walking away from their negotiations with YouTube to strike advertising deals.  The  latest walk-out is CBS, which the WSJ reports was not happy with the $500 million Google (GOOG) was offering.  That's about the same amount Google earlier offered Viacom (VIA), before Sumner Redstone's lawyers told YouTube to take down 100,000 copyright-infringing clips.  NBC is also giving YouTube take-down notices.

Maybe the media companies are reviving their idea to create a YouTube killer (bad idea), or maybe they just realize that there are many more online video platforms to choose from.  As Albert Cheng, vice president for digital media at Disney-ABC Television told me in a recent interview: "With YouTube, a lot of the assumption is that it is the only place for video. But that is not true." 

Apparently, Viacom liked the terms that peer-to-peer TV service Joost offered enough to strike a licensing deal with them instead of YouTube.  The fact that Joost allows media partners to sell their own advertising on its platform was probably a big selling point.  But apparently not a big enough selling point for Viacom to license some of its hottest shows like The Daily Show or The Colbert Report (rather, Joost viewers will get unlimited reruns of MTV's Beavis and Butthead, Real World, and Punk'd).

And there is still the legal question hanging over YouTube.  For instance, ABC does not have a marketing deal with YouTube, nor does it even have it's own branded channel, as does NBC.  While acknowledging the power of YouTube to deliver marketing buzz, Cheng explains why ABC has abstained from embracing the site:  "As a company, we are still grappling with the legality of what they are doing."

With content deals blowing up and legal questions remaining, buying YouTube may end up costing Google a lot more than $1.65 billion. 

Flickr Photo of the Day: tic tac toe

tic tac toe, originally uploaded by irisell.

Who is the Big Loser in the Google-Belgium Copyright Case?

Google (GOOG) lost a copyright-infringement case in Belgium.  Newspapers there objected to stories from their Websites being included in Google's search index, as well as headlines, photos and snippets appearing on Google News.  Google plans to appeal, but for now will remove the offending links from its search results.  (Danny Sullivan has all the sordid details).

If the ruling is upheld, it will be the Belgian newspapers who are the big losers.  Not showing up on Google or other search engines makes you pretty much invisible on the Web (at least to new readers who wouldn't seek your site out by themselves).  Google may be profiting from search ads next to results with links to these newspapers' stories.  But the Belgian newspaper sites no doubt also receive a lot of traffic from Google which they would otherwise not get.  And when all those visitors click through to the full stories, the Belgian sites can show them their own ads. 

But that is not good enough for the Belgian newspapers.  They saw all the money Google was making simply by indexing the Web and wanted to grab a piece of it.  The Belgian court sided with them, but instead of gorging on their share of the search engine's profits, Google will simply make them disappear.  As a result, traffic to their Websites will go down, and so will their online revenues.  That's what happens when you let the lawyers run your business.

Veoh's New Look

After more than a year of tinkering, video site Veoh has officially come out of beta with a new logo, a serious recommendation engine based on your viewing habits, advertising, and a new revenue-sharing program for uploaders of original video called Veoh Pro.  With Veoh Pro, video creators can charge per view or share in ad revenues, and by uploading once to Veoh their videos can also automatically be uploaded to YouTube, MySpace, Google Video, blogs, as well as turned into an iTunes-friendly podcast.  What's more, Veoh now provides viewer stats from all of those other sites as well in one handy dashboard.

"That is a huge feature that will save people hours and hours of time," says CEO Dmitry Shapiro.  He hopes these enhancements will help attract more of the top video makers on the Web to Veoh by helping to make their lives easier for them.  The site seems to be gaining some nice traction (see Alexa graph).  Although, the content on Veoh is still a mixed bag, with what appear to be full episodes of pirated shows uploaded to the site (like Da Ali G Show and Battlestar Galactica), but there is also a growing number of original videos as well (like a Spiderman spoof with Lego actors and, um, Battlestar Galacticast, a nerdy fan show about Battlestar Galactica).

Okay, so Veoh still has a ways to go to build up its online library of original video content.  But, unlike YouTube, at least there is no limitation on how long the uploaded videos can be.  Now that Veoh has ways to put advertising on those videos and help its  audience make money, we'll see if the quality shoots up.

(Read my previous coverage of Veoh here and here)

Will Widgets Kill the Webpage? (Exclusive Netvibes video).

Netvibes and the Widget Economy:

Click To Play

Netvibes CEO Tariq Krim predicts the end of the Webpage and the rise of the widget economy. Goodbye banner ads.

Tariq Krim is widget crazy (watch the video above).  The CEO of French startup Netvibes, the site where you can build a personal homepage from news and data feeds from all over the Web, is about to unleash a whole lot of widgets onto the Web.  (A widget is a tiny application or piece of a Website that constantly streams new information to you). 

Netvibes is a "no-logo" Website where users have total control (and was one of B2.0's Disruptors).  Already, it is a place where you can basically create any little information widget you like and arrange it with others on your personal page.  You do so by dragging and dropping boxes that contain feeds from your favorite blogs, newspapers, Flickr photos, YouTube videos, weather service, stock charts, Gmail, . . . you name it (see screen capture above).  Soon, Krim tells me, Netvibes will be supporting embedded video and audio podcasts as well.  As he explains it:

The motivation for Netvibes was to have something to let me get my digital life back.  The Internet is like a big hard drive.  You have your photos on Flickr, your email on Gmail, your videos on YouTube. Netvibes brings them back together.

Now he is about to blow it all apart.  Within the next few weeks, all of those little boxes (Krim calls them "modules") will become exportable as widgets to other Websites as well. "I love destroying what I build," he says.

It's Krim's way of contributing to the budding widget economy.  Netvibes has 10 million active users,  If you figure that each one has created at least five modules per page, that's a lot of potential widgets.  Krim declares:

Widgets are killing the Webpage.  It is time to go to something else.  We are entering the widget economy.  We are going there no matter what.

Netvibes is also developing a Universal Widget API that will let widgets talk to one another and synchronize among themselves.  And in April, Krim plans to add social networking features to Netvibes, such as the ability to subscribe to your friends' widgets or send them a cool blog post or video directly to their Netvibes page. Krim announces:

Netvibes Goes Social (and the Widget API):

Click To Play

Netvibes CEO Tariq Krim hints social networking features in the works for April, and discusses his soon-to-be released Universal Widget API.

How will you keep track of the millions of widgets out there?  Krim believes your social network will tell you which ones to pay attention to.  And rather than reinvent the wheel, Krim says Netvibes will try to make it easy for you to import your existing buddy lists from other social networks and instant messaging platforms.  "For me," says Krim,  "the social network is my new address book. But it is a living address book."  (In other words, he wants to create that missing Web 2.0 address book everyone's been waiting for).

But what exactly is a widget economy?  And if widgets will one day kill (or even wound) the Webpage, what will that do to today's dominant forms of Web advertising, which, after all, are based on the very existence of the Webpage?

Web 2.0: The Video

A definition of Web 2.0 using the moving image:

It's people!  It's people!

Influencing The New Influencers

In an analysis of thousands of submissions over a three week period on audience voting sites like Digg and Reddit the Wall Street Journal reports that one third of the stories that made it to Digg's home page were submitted by 30 users (out of 900,000 registered ones), and that one single person on Netscape, who goes by the online handle "STONER," was responsible for 13 percent of the top posts on that site. 

Any social media site that relies on the contributions of its users will find a similar distribution curve, with a relatively small number of top contributors representing the bulk of submissions.  For instance, user-submitted stock photography site iStockphoto has more than 35,000 contributing photographers, but only about 100 have sold more than 100,000 images (at about $1 to $5 a pop).  The difference is that with iStockphoto, users submit work in hopes of getting paid.  The financial incentives are very clear and upfront because it is an e-commerce site.

But with services like Digg or StumbleUpon which increasingly drive attention to other Websites, contributions are supposed to be driven by the heart, not the pocketbook.  As a result, there is more of an incentive for marketers to try to influence the top users on those sites with outright bribes.  That's why opportunist startups like User/Submitter are popping up to game these user-controlled sites by setting up payola schemes for marketers to siphon money to the top users to promote their products and services. 

What Digg and every other social media site needs is a trustworthy reputation system, where top contributors can get paid if they choose but also must disclose who is paying them, and other users can then vote on how much they trust those people.  Otherwise, these sites will eventually be filled with the equivalent of spam links.  (Although, in Europe at least, such deception may come under new regulations which will bar companies from "falsely representing oneself as a consumer," depending on how strictly those rules are interpreted).