The launch of the Streaming Video Alliance, a not-for-profit group of associated video content producers concerned with establishing best practice and tech specs for digital video, coincides with the release of two sets of results from companies at opposite ends of the video publishing spectrum that demonstrate the value of that content.
The positive results of the monolithic Youku Tudou in China and the much smaller-scale fashion blog Refinery29, both of which are largely down to their video ad performance, demonstrate that video can be a great investment for any size of publisher – it just requires a clear focus on best practice, regardless of the type of video it wants to create.
Streaming Video Alliance
The alliance includes video content producers from around the globe, including Fox Networks, Cisco, Comcast, Korea Telecom, Telecom Italia, Telstra, Viacom and Yahoo, and is designed to examine three main topics surrounding best practice for online video:
- Creating specifications for an open architecture that will support the growth of live and on-demand video.
- Identifying best practices that will help online video interoperability and efficiency.
- Creating a common method for measuring the quality of experience for video.
“Online video is a force of nature and we are only seeing the tip of the iceberg today in terms of consumer demand.”
Youku Tudou is the nearest equivalent China has to Youtube, with a reach of over 500 million users. As with YouTube, the vast majority of its content is still user-generated, but over the past five years it has been making a greater push to have content partners create quality original video for the site. As a result, its revenues have risen since the first quarter of this year, and it just posted third quarter net revenues of $180 million, and reduced its net loss to $16.7 million, down 17 percent on the previous year.
Its parallels with YouTube are obvious, right down to its renewed focus on quality content rather than user generated content (UGC). After all, that high-quality content is likely to command higher asking prices for ad space, and become valuable intellectual property from which Youku and YouTube could potentially benefit if it shifts to other mediums. For Youku, a division of Alibaba which has launched into film production through subsidiary Heyi Film, that could be a fantastic way to also benefit from quality videos with an existing audience.
So quality video works for huge publishers, but it also works for smaller organisations too…
Refinery29 is a fashion and lifestyle blog with an online reach of 11.1 million uniques in September 2014, a figure larger than the unique users for Glamour and Vogue combined. But its video reach is significantly less than theirs, with only 27,000 views of its videos on its US desktop site compared to Glamour’s 8.6 million and Vogue’s 1.4 million.
Yet despite that relatively limited reach, video accounted for almost 10 percent of the company’s profits for September – around $9 million – and the value that high-quality video added to other campaigns was a big driver of other advertising, according to Refinery29 co-founder Justin Stefano:
“There were plenty of deals where the reason a brand bought in was because we had a great video asset tied to the campaign, even if 70 percent of that revenue was going to other formats.”
Refinery29’s other co-founder Philippe von Borries ascribes that success to high quality productions like its ‘Style Out There’ series, which focuses on slightly niche content but produced to a high standard. And it’s because of the prestige of that content that other organisations are willing to work with it on producing branded content, which makes up a growing proportion of its revenue.
Both Youku and much smaller Refinery29 are demonstrating the rewards that come with a focus on producing quality video, particularly in a time when the small-screen audience is migrating from television to digital originals.
Two notable absences from the line-up of the Streaming Video Alliance are Netflix and Youtube (though they have the opportunity to join later). That’s unsurprising, as both have expansive existing audiences for their video content, proven distribution methods and a long-standing focus on high quality video. In a sense, they have both already achieved the goals that the alliance is built around.
But the fact that both are so successful (though not unassailable) is just further proof that the alliance has a definite goal in mind, even if it is simply to replicate their success. Finding efficient ways to distribute quality video is absolutely in line with where projected ad spend lies over the next few years, so for some of the publishers involved in the alliance, its findings offer an opportunity to make the most of video’s rapidly growing importance.