You’d think American Idol’s viewer ratings would be immune to the strike, because it doesn’t have any writers. But its numbers have dropped sharply compared to a year ago, Why? Viewers are going online.
YouTube traffic has gone up 18 percent over the last two months, and Sony’s online video site Crackle (formerly Grouper) doubled to 2.4 million users in Nov./Dec. from 1.2 million in Sept./Oct., according to Nielsen Online.
So writers are going to need to address the seismic shift happening in their industry, and get online.
Enter Broadband Enterprises, an online video network that is, from what I is hear is the talk of its hometown, New York. The company doesn’t seek to host video like YouTube; rather it does everything else: It helps create video, insert ads into the video, and helps syndicate video to other sites. In other words, it caters to what could be a groundswell of writers, actors and directors interested in making careers online.
The company is raising $10 million from Velocity Interactive Group to help it do so.
Significantly, Broadband Enterprises has built a way to contextually target ads based on the text, metadata and taxonomy of information on Web pages containing video.
Here are some Broadband Enterprise statistics:
— It streams one billion videos per month, according to chief executive Mark Wasserlauf;
— It reaches more than 45 million viewers in aggregate, as of Comscore’s October numbers;
— It syndicates programs from more than 400 video producers (like the popular Cube Fabolous, above) to 2,000 affiliated partners. WatchMojo’s Ashkan Karbasfrooshan, for example, has been approached by the company (mentioned in its write-up of online video, here);
– It gets 200 to 300 million video ad views per month, the company tells me, mostly pre-roll ads but with a wide variety of other formats. Case Fabolous, for example, has made millions;
– It creates its own content, including the Academy of Socially Awkward Situations;
Broadband Enterprises says it has been profitable since it started four years ago because it doesn’t do anything for free. This contrasts with many Silicon Valley video startups, which focus on getting big and assume they can figure out the business model later.
Broadband Enterprises had advertising deals inked with large companies like Proctor & Gamble and Microsoft when it started, and has since added more major brands. As a result, it has been profitable for its entire history, bringing in millions both from advertising deals and from content syndication.
Velocity Interactive Group (our coverage) is a new venture firm focused on digital media and led by Ross Levinsohn (who brokered News Corp.’s purchase of Myspace), Jonathan Miller and partners from ComVentures. In August, PaidContent caught wind that the firm was looking at the company.
The Writers Strike and Online Video
As TV ratings slump due to the writer strike and people turn to the web for videos, major brands are following them. Los Angeles-based Levinsohn said he had lunch today with the head of programming at a broadcasting network, who is seeing a significant decrease in advertising spending.
A major consumer package goods company that spends $3-4 million on Broadband Enteprises is interested in spending between $40-60 million on Broadband Enterprises, Wasserlauf says.