purple motes

Nico Nico Douga is a Japanese video sharing site that has rapidly gained popularity in Japan. Nico Nico Douga was launched in mid-December, 2006. A little more than a year later, in mid-January, 2008, the site had about 5 million users. As of October, 2007, the site's Japanese users amounted to 27% of YouTube's Japanese users, but Nico Nico Douga's users had 43% greater video viewing time and 49% greater number of visits per month than YouTube's Japanese users.[1] Nico Nico Douga has been astonishingly successful in rapidly acquiring a large number of relatively active users.

A signature feature of Nico Nico Douga is that users are able to add text comments within videos. Much research and analysis supports the value of integrating sensory modes of communication (but I'm still waiting for a show-and-tell mobile communicator). Other sites, however, have not been successful with this feature. Mojiti, one of several sites that has provided commenting within videos, disappeared. Hulu, an NBC-News Corp joint venture, is rumored to have purchased Mojiti, but Hulu does not currently offer commenting within videos. Part of the problem may be rights issues. Adding comments within a video might arguably be creating a derivative work, or be a violation of the creator's moral right to the integrity of her or his video work. So perhaps the reason that Nico Nico Douga has successfully implemented in-video comments, and popular U.S. video sites have not, is that the U.S. has many more copyright lawyers than does Japan.

Nico Nico Douga's revenue comes mainly from premium membership fees. The site, which requires users to register to view videos, offers free membership and premium membership. The number of free members granted access to the site is limited during the prime usage hours 7pm to 2am. Premium membership costs 525 yen (about 5 USD) per month. Premium membership gives the user unrestricted access time, more bandwidth, more storage, mobile services, and other additional customization options. Premium members account for only about 3% of total members. But premium membership fees account for about 67% of the site's revenue. The remaining 33% of revenue comes roughly equally from banner ads and an affiliate program.[2] Nico Nico Douga' business model thus contrasts sharply with video sites that emphasize video distribution and advertising.

Many video sites are currently struggling to generate ad revenue. YouTube's U.S. (ad) revenue for 2008 was recently estimated at 90 million USD. Some estimates put total U.S. online video ad revenue for 2008 at 0.5 to 1.4 billion USD. Perhaps 50% of that ad revenue will be from display ads on video play pages, 40% from pre-roll video ads, and only 10% from in-video ads. Online video ads confront some significant challenges. Most fundamentally, unless online video ads work significantly differently from other types of traditional advertising, the size of the total ad market will be limited to perhaps 1.5% of GDP. In that scenario, online ad revenue will come only from winning tough competition for attention with traditional media.

Nico Nico Douga's annualized revenue in January, 2008 amounted to about $25 million USD.[3] That's not bad for a business in operation for a little over a year. Profitability for online video sharing and social networking sites is possible. But betting solely on advertising-supported business models probably isn't a good idea.

Notes:

[1] These data are from Fumi Yamazaki's review of Nico Nico Douga on Joi Ito's Lab Blog. From the linked Nielsen/Netratings source (in Japanese), and other data I've inferred the specifications of the numbers.

[2] These figures are based on figures in Fumi Yamazaki's review. See that review for underlying data and sources. For business model description, see Section IV of Tokyotronic's review.

[3] Calculated by scaling up Y 101 million revenue in Nov. 07 with 86,000 premium members to 174,000 premium members in Jan. '08.

Tags: ads, business model, membership, Nico Nico Douga, video

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Searching video is notoriously difficult. That implies a scaling problem for a large video repository like YouTube. Given relatively fixed amounts of video tagging and category information, more videos imply relatively less information for searching among videos and targeting ads to videos.

YouTube's announcement of new APIs for external use of the YouTube video platform points to better information for video search and ad targeting. Videos uploaded and played through a third-party site are segmented by the specific third-party site. Third-party sites also have differentiated text correlated with the content of associated videos. This additional information allows better video search and better video ad targeting compared to what's possible for videos uploaded and viewed on the YouTube site.

Online video services have many different niches. Decentralizing video uploading and playing provides a more scalable business for YouTube.

Tags: ads, information, scale, search, video, YouTube

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In recognition of the U.S. presidential primary upcoming this Tuesday in DC, Maryland, and Virginia, here's the best campaign video thus far:

I think we can, I think we can, I think we can...

Tags: election, president, U.S., video

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In a path-breaking decision, the U.S. Supreme Court posted on its website a video along with text of its opinion in Scott v. Harris. Common sense is essentially multimodal. By including video along with its opinion, the Court provided a decision record that communicates its judgment more effectively than would just text.

The Court's recording of its decisions has had significant effects. In the Court's first copyright decision in 1834, the Court declared itself "unanimously of opinion that no reporter has or can have any copyright in the written opinions delivered by this Court, and that the judges thereof cannot confer on any reporter any such right." (Wheaton v. Peters, 33 U.S. 59, 668). The Court's decisions thus became a legally secure component of the public domain. In Burrow-Giles Lithographic Co. v. Sarony (1884), the Court found, "this photograph [“Oscar Wilde, No. 18”] to be an original work of art, the product of plaintiff’s intellectual invention of which plaintiff is the author, and of a class of inventions for which the constitution intended that congress should secure to him the exclusive right to use, publish, and sell." The Court did not however, include a reproduction of this photograph in its decision. It thus did not place in the public domain a work derived from a photograph of significant public importance. Not doing so, among other effects, lessened public understanding of its authoritative judgment

Verbal statements, whether in judicial opinions or elsewhere, are in some circumstances a poor substitute for video. Courts have long recognized the distinctive value of non-verbal evidence through their practice of admitting into evidence objects in addition to personal testimony and documents. A major issue in Scott v. Harris was the danger to the public from a driver fleeing from police cars signaling to the driver to pull over. Video from the police officers' cars communicates extent and nature of the danger in a way that cannot be reduced to a collection of propositional statements of fact. The video also specifies an authoritative judgment with respect to the extent of danger much more clearly, especially to the general public, than does just a text.

The justices apparently did not consciously edit video in the Scott v. Harris case record in making their opinions. The case record included four color videos automatically recorded from police cars when they activated their sirens. The justices' opinions included two very different descriptions of these videos. The decision record for the Court in this case includes, however, just one black-and-white video. That video (the "opinion video") appears to be the video from one police car appended to the video from another.

Selecting relevant video is an important aspect of reasoned argument in Scott v. Harris. In the opinion video, a total of 3.9 minutes of video (24% of the total run time of the opinion video) showed the crash of Harris' vehicle and the subsequent effects and actions (image of the overturned vehicle, the clouds of smoke rising from it, the police officers rushing toward the vehicle and desperately trying to open the car door to get Harris out of danger, etc.; for better understanding, watch the relevant segments of the video). Harris, who was only 19 years old, suffered permanent paralysis of his arms and legs from the crash. Irrespective of the legal issues associated with the crash, compassion is a natural and appropriate human reaction to Harris' suffering. Nonetheless, this specific crash and its terrible human effect is not relevant to judging the reasonableness of the prior police decision to terminate the chase in a way that created a risk of serious injury or death for the fleeing driver. Including the video segment of the crash and its aftermath fosters well-recognized biases, e.g. hindsight bias, outcome bias, affective bias. Video for judging the reasonableness of the police action should excise the video segment showing the crash and its aftermath.

Camera viewpoint is an important, case-relevant aspect of video in Scott. The camera viewpoint of the video approximates that of the eyes of a police officer in a chasing police car. This video, as a resource for immersive, imaginative experience, is thus oriented toward persons imaginatively assuming the position of a police officer. Presenting the video in a way that helps persons imaginatively assume the position of a police officer is the best use of the video. Ensuring that viewers are conscious of that particular video viewpoint helps viewers to judge critically the effects of their viewing experience.

Diegetic time is another important, case-relevant aspect of the video. The video includes the period from when the police officers began to seek to stop the driver to when a police officer terminated the resulting chase. The dangerousness of the chase depends on specific circumstances occurring over time. These circumstances include the fleeing driver's and the police officers' physiological states. Since the human hormonal system has slower-acting but more general and longer-enduring effects than the human nervous system, events that trigger hormonal reactions associated with a situation of danger can shape subsequent actions and perceptions of time and danger. Hence judgments of public danger involve complicated temporal issues.

Watching and editing video can promote and communicate reasoned judgment of public danger. An important issue is the time span in which a judgment of dangerousness is reasonably made and revised. Whether unusual events are discounted in such a judgment, or weighted extra heavily, also is an important issue. Watching and editing video as if it were a transparently objective record of events ("naive realism") obscures how video really works and impedes reasoned understanding of video's truth value.[1]

Included below are two videos created from video in the Scott case record. The first video includes segments of video from the beginning of the chase, and a segment of video up to the end of the chase. The second video highlights relatively dangerous events that occurred during the chase. Both videos are designed for the viewer to assume imaginatively the position of a police officer. Both videos use selective cuts of the action and connect the video segments with half-second cross dissolves to preserves sense of immersion. Both videos preserve real-world temporal sequence, except for in one switch in viewpoint that is obvious. The second video stops action at two points to suggest a circumstance that would have been particularly salient in a model of accumulating indications of danger. These videos are not designed to be deceptive or to be propaganda. They are meant to foster rational argument about the danger to the public of allowing the chase to continue.

(more...)

Tags: editing, evidence, judgment, law, Scott, Supreme Court, video

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Previously I estimated that, from 1985 to 2004, video circulation from U.S. public libraries grew 2.5 times as fast as video rentals from video rental businesses. This estimate depended on a sub-estimate that video circulation from public libraries in 2004 was 15% of book circulation. Data that I did not previously consider suggest that video circulation from public libraries in 2004 was about 25% of book circulation.[1] That figure implies a much greater library video circulation growth advantage: it implies that video circulation from U.S. public libraries grew 4.6 times as fast as video rentals from video rental businesses.

Public libraries' comparative video circulation success occurred with a much slower transition from video cassettes to DVDs. The ratio of DVDs to video cassettes rented from commercial rental businesses was 1.1 in 2002 and rose to 12 by 2005. For a sample of 11 libraries, this ratio reached 0.9 only in 2005 (see Table below). A sample of about 275 library systems in 2005 had a ratio of DVDs to video cassettes of 1.3.[2] Libraries' video circulation shifted from a majority of video cassettes to a majority of DVDs about three years behind video rental stores' rentals.

Ratio of DVDs to Video Cassettes Circulated

Year	Rental Businesses	Libraries
2002	1.1	n/a
2003	2.3	0.4
2004	4.5	0.6
2005	12	0.9
2006	115	1.7
Source: See [2]. Library ratio is for sample of 11 libraries.

Libraries' relatively fast growth in video circulation and late transition to DVDs suggests that video quality is less important than video selection and video price. Libraries may have offered borrowers videos, including video cassettes, not available at video rental businesses. Libraries also offered free borrowing, as compared to fee-per-selection at video rental businesses. Desire for DVD-quality video viewing apparently wasn't strong enough to shift a lot of video borrowing from libraries to video rental businesses.

Notes:

[1] Molyneux (2007), reporting data from the Normative Data Project for Libraries, documents that for 11 libraries, video circulation (video cassettes and DVDs) in 2004 was 26% of book circulation. For 275 library systems in 2005, video circulation was 35% of book circulation in 2005, compared to 34% of book circulation for the 11-library sample in 2005. Molyneux (2007) p. 403 notes variation in reporting among the 275 libraries over time. That does not affect the ratio of reported figures at a given time. These data suggest that 25% is a reasonable estimate for 2004 for video circulation as a share of book circulation.

[2] The video rental data are from Adams Media Research, as reported in U.S. Entertainment Industry: 2006 Market Statistics, p. 28. The library statistics are from Molyneux (2007).

Reference:

Molyneux, Robert E. (2007) "Transitions: Library Circulation and Digital Formats," in The Bowker Annual 2007: Library and Book Trade Almanac, pp.402-6.

Tags: circulation, formats, libraries, video

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From 1985 to 2004, video rentals from U.S. public libraries grew 340%. Over the same period, video rentals from U.S. commercial rental businesses grew 140%. Public libraries' video rental activity did grow from a smaller base: 70 million videos loaned in 1985 (6% of the number of videos commercial outfits turned in that year), to 300 million videos loaned in 2004 (12% of the number of videos rented commercially). The growth of video lending from public libraries has been amazing, and largely unnoticed.

Pricing is probably a large part of the explanation for this performance differential. The average price for commercially renting a video in 1985 was $2.38. The average price for borrowing a video from a public library in 1987 was $0.39 (30.4% of libraries charged for borrowing video, and those libraries charged an average of $1.29). In 2004, the average price for commercially renting a video was $3.43. The average price for borrowing a video from a library was then approximately zero. Lower price induces greater demand, and free (zero price) is a highly appealing price.

This video example does not depend on some of the factors thought to be producing the death of paid text content. From 1985 to 2004, there wasn't a proliferation of free video content on the web. I would guess that, overall, commercial video rental stores have a video inventory that most persons would value more highly than the video inventory of a library. Consumer may like free content. But video is quite expensive to consume. Given that the average video takes perhaps an hour and a half to watch, the higher inventory value of commercial video rental firms might have easily outweighed the lower video rental price from libraries. But it didn't.

Persons seem to have a high time-discount rate in content choices. The benefit of watching a relatively good video comes later than the cost of paying the rental fee. A high discount rate lowers the importance of the former, and raises the importance of the later. So perhaps a significant part of the challenge of making a paid content model work is delivering benefits soon relative to payments.

* * *
The table below summarizes the facts. Subsequent notes describe the sources and estimates.

U.S. Public Libraries and Video Stores

	1985	2004	% inc.
total public library circulation	1150	2010	75%
video share of library circulation	6%	15%
video borrowing price from libraries	$0.50	0
videos borrowed from libraries	69	302	337%
video rental price from video stores	$2.38	$3.43
videos rented from video stores	1100	2592	136%
All counts in millions. Video includes Betamax, VHS, and DVDs.

Sources

Public library circulation: For 1985, interpolated from figures for 1983 (Goldhor (1995)) and 1990 (NCES/ALA). The Goldhor figures are given in Galbi (2007a). For 2004, figure from NCES.

Video share of public library circulation: Dewing (1988) presents results from a survey in early 1987 of about 3000 public libraries having video cassette collections. The survey received 841 valid responses. Id. p. 69, Table 6.19, gives average tapes loaned, by size of the community the public library served. The survey did not include data on total library circulation. Using NCES Public Library Statistics for 1987, I calculated average circulation per week for the four community size categories used in reporting the video survey results (less than 20,000; 20,001 to 50,000; 50,001 to 100,000; greater than 100,000). Average videos loaned were 18%, 7.5%, 7.7%, and 7.4% of average library circulation for the four community size categories, respectively. Responses in the smallest community size category may not have been representative of all small libraries in that category. Since the video survey addressed only public libraries having a video collection, the survey doesn't account for the zero circulation share in libraries that didn't have a video collection. For a conservative estimate of the growth rate, I estimate the 1985 video circulation share to be 6%. One small additional piece of evidence: In West Virginia about 1984, the Morgantown Public Library reported that video circulation accounted for more than 6% of annual circulation. See Caron (1984). The video share estimate for 2004 is based on the data in Galbi (2007b). While the data could support a higher estimate for the video share in 2004, I've used a rather low estimate to generate a conservative estimate of the growth rate.

Videos borrowed from public libraries: Calculated from library circulation and video share.

Video borrowing price from libraries: Dewing (1988) pp. 70-71 provides the data on prices for borrowing videos from libraries in 1987. Most libraries (73%) had a loan period of about a week. I roughly estimate the price in 1985 to be $0.50, and also roughly estimate the price in 2004 to be 0. The later estimate is based on the declining purchase price of videos and personal knowledge of library operations. Elgin (1992), p. 12, recorded that libraries that eliminated charges for borrowing videos experienced increased video borrowing.

Video rentals from video stores: From EMA, A History of Home Video and Video Game Retailing.

Video rental prices: EMA gives the 1985 average price. I calculated the 2004 average price from rental units and total rental revenue (Adams Media Research data).

References

American Library Association [ALA], Public Libraries in the United States Statistical trends, 1990-2003.

Caron, Barbara (Fall 1984), "Video Cassettes in the Public Library," West Virginia Public Libraries; cited in Elgin (1992) p. 6.

Dewing, Martha, ed. (1988), Home Video in Libraries (Boston, Mass.: Knowledge Industry Publications).

Elgin, Romona R. (1992), Comparison of Book and Video Circulation in Public Libraries, Student Report, Northern Illinois University, Department of Library and Information Studies.

Galbi, Douglas (2007a), Book Circulation Per U.S. Public Library User Since 1856, available at galbithink.org

Galbi, Douglas (2007b), "library users like audiovisuals," available on purplemotes.net.

Goldhor, Herbert (1985). A Summary and Review of the Indexes of American Public Library Statistics: 1939-1983. Library Research Center Report (Eric Document # ED264879). Urbana, IL, Illinois University.

National Center for Education Statistics [NCES], Public Libraries.

Tags: circulation, libraries, paid-content, rental, time discounting, video

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Video circulation from Massachusetts public libraries doubled from 1998 to 2006. Over the same period, print item circulation fell slightly. Audio and video items together now account for 32% of total item circulation from Massachusetts public libraries.[1] Audiovisual circulation in libraries in other states might account for somewhat less, perhaps a quarter of total circulation.

YouTube, which was launched in November, 2005, now generates about 10% of broadband subscribers' Internet traffic in North America (Ellacoya findings).

Video attracts much more attention than print. Historically, persons have spent on average relatively little leisure time reading. Most of the growth in leisure time from 1925 to the present has been absorbed in watching television. Now persons have on-demand access to large, diverse collections of videos, similar to what they have had for books.

Book digitization and internet publishing makes texts more readily accessible. But changes in access to video will have much larger effects than changes in access to print.

Reference:

[1] Data from Massachusetts Board of Library Commissioners, Public Library Data, Summary Report 2006, p. 29. This is also the source for the above graph.

Tags: audiovisuals, collections, libraries, Massachusetts, print, video

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According to Communications Daily (June 21), Motorola CEO Ed Zander stated in his keynote address at NXTcomm that Motorola next summer will have a mobile device that allows persons to talk and share photos at the same time. Much evidence suggests that such capability has significant value in communication.

While delivering video to mobiles is attracting more industry attention, I think that the possible upside for show-and-tell devices is bigger than for mobile video. Design and marketing will be significant challenges. On the other hand, in-stream photo sharing is closely related to highly successful mobile voice and SMS charging models. In-stream photo-sharing can easily draw upon well-established user understandings of payment for communications services. That's not the case for watching video on mobiles.

Tags: communication, mobile, Motorola, show-and-tell, video

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Government printing jobs have contributed significantly to the development of the printing industry. In North America from 1640 to 1790, printed government documents probably accounted for about 30% of printed documents considered to have enduring significance. In the U.S. at the end of the twentieth century, the number of titles that the Government Printing Office issued was equal to about a quarter of the total number of new books and new editions that other printers published. Other countries have probably had an even higher share of government publications. Government printing contracts are typically highly sought for the stable and predictable demand they provide. In addition, government documents have had a distinctive role in the evolution of copyright.[1]

Like print communication about government proceedings, video communication about government proceedings is intimately related to the functioning of democracy. In a letter to U.S. House of Representatives Speaker Nancy Pelosi, Carl Malamud stated:

Based on 25 years of experience in the field of computer networking and a 2-year investigation of this specific issue, I have absolutely no doubt that it is technically and financially feasible for the U.S. Congress to provide a permanent broadcast-quality video record of proceedings and hearings for download on the Internet. Technically speaking, this is a “no-brainer.” This is simply a matter of will.

Adopting a goal that by the end of the 110th Congress, the U.S. House of Representatives will offer broadcast-quality video of the floor and all hearings for download on the Internet is a reachable goal and one that will set a standard for transparency and openness. Your leadership in embracing this goal would set an example for all branches of the federal government, indeed for all governments here and abroad. If a hearing is to be considered truly public, the public has to be able to see it, both now and forever. I encourage you to adopt this standard as a goal for the 110th Congress.

The Government Printing Office (letter) and C-SPAN (press release) (after some controversy) have recognized the democratic importance of making video of government proceedings more widely available. E-government initiatives have tended to focus on information provision and electronic transactions. Video is not necessary for either. Video, however, is a powerful mode for attracting attention and creating a sense of personal relationship between government representatives and citizens. Thus politicians are typically keen to gain access to television, and political campaign fund-raising in the U.S. primarily serves to provide money for buying television time.

[if you don't see the video, try here]

Expanding government video production can foster more capable and less costly video distribution networks. As Malamud explained in a Google Tech Talk, his proposal would make about 50 hours per day of original Congressional video available to the public. That large video source could serve as a testbed for the development of annotation technologies and might help to move along multicast capabilities for the Internet. Moreover, when potential state and local government video sources are added to federal sources, government video could amount to a significant share of video on the Internet. Government video might become as significant in the development of video communication as government printing has been in the development of print communication.

Related News: The U.S. General Services Administration (GSA) recently established a new communications contract for voice, IP, wireless, satellite and IP-centric services for the federal government. The GSA estimates that the over-all federal contract, called Networx, has a value of $20 billion across ten years.

Note:

[1] The North American Imprints Program (NAIP) provides a database of items that were printed from 1640 to 1790 and preserved in American libraries. In a categorization of these items, the largest five categories, with percent of total records, are: government printing (30%), sermons (13%), almanacs (8%), poetry (5%), and juvenile/schoolbooks (5%). These statistics exclude records for booksellers' advertisements, subscribers' lists, playbills, and sections of books (analytic records). Printing statistics based on page counts, or page area, produce different values, but that government printing was significant for the printing industry is clear. See Amory, Hugh (2000), "Appendix One: A Note on Statistics," in Hugh Amory and David D. Hall, eds., The Colonial Book in the Atlantic World (New York: Cambridge University Press). For the late twentieth century statistic, see Galbi, Douglas (2001), "E-Government: Developing State Communications in a Free Media Environment" p. 2. In the U.S., federal government documents are in the public domain (no persons holds copyright to them). Moreover, a case concerning U.S. federal court reports settled the statutory basis of copyright. See Wheaton v. Peters (1834).

Tags: development, government, print, publishing, video

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Content is glamorous. Stars, drama, action, romance, suspense. But if you want to understand how Internet video distribution will evolve, you've gotta get your nose into dull facts and the dismal science.

Video content has little relevance to aggregate patterns of video consumption. Growth in discretionary (leisure) time is closely correlated with time spent watching television. From 1925 to 1995 in the U.S., discretionary time increased by 15 hours per week. Over the same period, television watching time increased from 0 to 16 hours per week.[1] Television viewing time has expanded to fill growth in leisure time.

Television watching generates common patterns of human behavior irrespective of video content choices. Compare the US to the USSR in the mid-1980s:

In the mid-1980s television programming and broadcasting in the USSR was state-owned, state-controlled, and highly centralized. Households had little opportunity to choose between programs: 68% of households received two or fewer program channels. In contrast, television in the US in the mid-1980s was privately owned and commercially driven, and television offered viewers many programming choices; 88% of households received five or more over-the-air television signals, while cable systems, with median capacity of over 30 channels, passed 76% of households.

Despite these and other sharp contrasts between the US and the USSR, the television set, the way television was watched, and time spent watching television were remarkably similar. In both the US and the USSR the average viewer sat on a couch and watched a rectangular colored screen about two meters away. In the US in 1985 television viewing times for employed men and women were 14.6 and 12.1 hours per week respectively. In Pskov, USSR in 1986, television viewing times for employed men and women were 14.5 and 10.7 hours per week respectively.[2]

The sensory form of video, much more than its content, shapes the physical characteristics of viewing and the amount of viewing time.

Channel repertoire data also indicate common behavior across different content circumstances. In Beijing, China, in 2002, households received on average 37 channels of television. Viewers watched for more than ten minutes per week on average 13.5 channels. Viewers similarly watched per day (among days that included television viewing) on average 4.5 channels.[3] For comparison, in the U.S. in 2005, households received on average 96.4 channels, and watched on average 15.4 channels per week.[4] In Mexico in 2000, viewers watched per day (among days that included television viewing) on average 4.4 channels. Whether in China, the U.S., or Mexico, viewers behave similarly in the extent to which they switch channels on the television.

Video content probably has little relevance to substitution between traditional television viewing time and viewing video available through computer screens. Television sets are ubiquitous and part of the architecture of many homes (the "TV room"). Sitting inertly, killing time in front of the television, is a deeply ingrained habit for many adults. More video choices or better quality video is unlikely to greatly affect video watching. Talk of a schism between content creation and content aggregation and distribution seems to me to miss the main point. Video content creators compete among themselves for viewers with common behavioral routines. Common behavioral routines themselves are out of the scope of persons' boundedly rational behavioral optimization.

Changing common behavioral routines is more an issue of social change than product design. Joost describes itself thus:

Joost™ is a new way of watching TV on the internet, which uses new and established technologies to provide the best of both the internet and TV worlds. We're in the process of making it as TV-like as we can, with programmes, channels and adverts. You can also see some things that we think will enhance the TV experience: searching for programmes and channels, for example, as well as social features like chat.

To the extent Joost is like TV, how will it motivate persons to get off the couch in front of the television? Is searching for programs and channels valued experience? Recently the web has been abuzz with Joost's deal with Viacom. Why will users watch Viacom's content on Joost rather than on television?

A vague report on recent research findings, which I cannot track to the source, indicates that user-generated content is "more popular" on YouTube than professionally funded content. But what makes YouTube different from television is users generating content, not the user-generated content. What makes YouTube different is users sharing content, not the content that users share. It's about what people are doing, not what specifically they are watching.

Internet video provides a much better platform than television for creating advertising value through serving dynamic, relevant ads. As Martin Geddes insightfully observed on the value of television content:

So whilst the remote lets you adapt the primary content to your personal tastes, you’re stuck with whatever irrelevant junk they choose to insert in the ad breaks. So there’s a large and growing opportunity to fix the broken ad business. And that’s why TiVo is screwed. They fixed the wrong problem. The issue isn’t getting people to see the right programs. It’s getting them to see the right ads. They screwed up so big, they even gave you a feature to skip the ads. On their epitaph is will say “TiVo. Forgot where the money came from”.

Inferior content with high-value advertising will make superior content with low-value advertising not worth producing.

* * *
[1] See Galbi, Douglas (2001), "Some Economics of Personal Activity and Implications for the Digital Economy," Section I.

[2] Ibid.

[3] Yuan, Elaine J. and James G. Webster (2006), "Channel Repertoires: Using Peoplemeter Data in Beijing," Journal of Broadcasting and Electronic Media 50 (3) p. 532.

[4] Report based on Nielsen Media Reporting data.

Tags: advertising, content, distribution, valuing potatoes, video

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