Questions for Brightcove CEO Jeremy Allaire

  |  June 5, 2006   |  Comments

As one uniquely steeped in Web video, Allaire shares his insights into the business issues around Internet TV.

How will the Web video fans of 2007 and 2008 tune in to their digital shows? What will they watch? Where will they watch it? For how long? What will the sponsorship and marketing look like?

Many people are proposing answers to these questions, from the video bloggers on YouTube all the way up to Terry Semel and Sergey Brin.

Somewhere between those extremes you'll find Brightcove CEO Jeremy Allaire. For over a year, the former chief technology officer at Macromedia has been working to develop an approach to video distribution and syndication that's as flexible as possible, both from the standpoint of the content producer and the end user.

Under his leadership, Brightcove has struck distribution deals with The New York Times Company, Discovery and TiVo, among others. The company's ad model is for now focused on traditional in-stream sales, but that's changing. At a recent speech at Streaming Media East, Allaire was critical of TV-style pre-roll ads, saying online formats would move toward deeper engagement.

In a discussion with ClickZ last week, he touched on those remarks, plus the savvy of video media buyers and what we really know about Web TV consumption.




Q.I want to ask you about your comments at Streaming Media East, when you seemed to downplay traditional pre-roll ads and call instead for deeper engagement. Isn't that view at odds with a large syndication platform that acts as a go-between for advertiser and programmer?

A.We do not stand between the advertisers and the publishers. Brightcove's model allows [publishers] to distribute content and monetize it using their own ad sales relationships. We're a distribution platform partner.

My comments were really about what we're seeing in the marketplace. Clearly the first move in the broadband ad space, as TV buyers move to the Web, is to take creative assets they're building around video and create a video commercial and integrate that into the content.

It's a model that's existed for decades. Clearly it's a huge piece of the business. It's nearly all of the business today.

What the Internet presents is the potential to be different and to be potentially more valuable to the sponsor and to the consumers. And we think it will be much more valuable to the content owners as well. These new types of engagement with sponsorship and advertising can yield higher value.

We've talked about some formats that are interactive and allow the consumer to engage more deeply. As you introduce longer programming, I don't think the video commercial will come over to the Internet very cleanly. I don't think that's what consumers are looking for. They're not looking for a replication of a broadcast.

Marketers have to think about how to involve themselves with the content without interrupting the content. Overlays and adjacent rich media units will become more prevalent and important.

In addition, when we talk with major buyers and agencies and others, marketers are getting a lot more sophisticated about how they spend their money online. It's usually presented in very deep microsites around products. In the past marketers would build banners to drive people to those sites. Now we have the opportunity to bring the microsite into the programming experience. We're seeing a lot of interest in that.

Q.Are large numbers of media buyers savvy to these approaches, or are we talking about an enlightened few?

A.You'd be surprised. Early this year, when we really went out to the market and spent a lot of time with key constituents, a resounding comment we heard was, "We're definitely interested in buying media traditionally," but also, "How do we use the Internet as a platform to express programming ourselves?" We're now cultivating quite a few interesting relationships in that vein.

Q.How much have we learned about who's watching video, where they're watching it and why? Do you feel you have a grasp on those issues?

A.I have a grasp. I don't know that I have any breakthrough insights. We're seeing general Internet user base adoption of video in many different contexts. Informational video. Educational video. These are all seeing interest and adoption.

There are consumers who are more acclimated to use the Web as a media consumption environment versus a research tool. There are clearly users who are much more comfortable with consuming media, versus those that really view the Internet as a communications and transactions platform.

Our premise is that Internet television and the video Web basically mirrors the Web. You explore areas of interest in a deep way. You'll consume this sort of content every time you go online.

Q.Are people trained to go to a certain place to watch video?

A.I don't think they are. If you look at emerging data, the actual numbers on a relative basis to the general audience of Internet users is tiny.

Q.What about pricing? Should video advertising be sold on a CPM basis? What other models might work?

A.CPM-based pricing is tried and true. People understand it. The economics work. The fact that, in an Internet television environment, brand advertising can have an action associated with it, creates new opportunities. But we haven't seen that take off. We're in the very first phases of seeing people begin to try to price things a little differently.

Q.When Publicis launched its new "futures practice," Denuo, it was reported that the consultancy had a stake in several Web 2.0 firms, including Brightcove. Is that true? How are they helping you appeal to marketers?

A.They're not an investor. Denuo is on our advisory board, but they're not an investor in the company.

Very early on last year, we engaged with a variety of folks, including Starcom [where many Denuo execs came from]. They were very smart about products, units and what's going to be important to buyers.

We certainly continue to work with them as a prospective partner. On an ongoing basis, we present our ideas to them and get their feedback, though certainly not exclusively. We're presenting the same material to a range of agencies.

Q.How important is the TiVo deal to your business? Is it strictly of long-term benefit?

A.From our inception, we clearly saw that in the realm of Internet TV, it was going to be possible for publishers and programmers to reach consumers not just on the Web, but also on their TV and other devices. And we've focused on open platforms. It's a very nascent opportunity. The number of consumers that have devices that are broadband connected is very small.

I think it's fair to say this is a new opportunity. It's not going to be an enormous economic opportunity until many more consumes have these devices. But the trend is pretty clear. Our strategy is to partner with the major brands and technologies, to learn from them and create additional opportunities to grow.

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ABOUT THE AUTHOR

Zachary Rodgers

Until March 2012, Zach Rodgers was managing editor of ClickZ's award-winning coverage of news and trends in digital marketing. He reported on the rise of web companies, data markets, ad technologies, and government Internet policy, among other subjects. 

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