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Sobering up to Bud.tv

March 29, 2007

This content was originally distributed on March 14, 2007.

As I expected, Bud.tv, Anheuser-Busch’s attempt at broadband branded content, is starting to sputter. Some of you know that I have been predicting this would happen for awhile now. The only thing that is a surprise here is how quickly it happened.

http://news.yahoo.com/s/nm/20070313/wr_nm/budtv_dc_1

One of the reasons given is the very invasive age verification system they have put in place. Certainly audiences tend to want demonstrable value before giving up such sensitive information, and Bud.tv has yet to demonstrate that its content has such value. But, the primary issue in my opinion is a fact I have been arguing for quite some time: there are simply so many places to watch videos online, and so many videos to watch of similar production and development quality, generating audiences seems a next to impossible task. This is true for any site online, let alone one in as busy a vertical as video. Developing the types of audiences AB wants will require significantly more marketing investment than they have thus far put in. Leads you to wonder if all that marketing investment is an efficient use of resources.

In my mind, AB should have worked with existing properties with established traffic on more robust age verification, and used their platforms for distribution. This way, AB could focus their financial resources on developing more compelling content.

Too many content owners move online thinking they need to establish a destination for their content properties. In fact, all evidence is pointing towards content no longer being tethered to a specific site. Not only is the same content being found in multiple outlets (e.g. Ask A Ninja can be seen on Revver, on YouTube, on Democracy and on its own site), but video RSS is gaining momentum and video players like the Democracy Player (www.getdemocracy.com) are making the need to go to a destination completely unnecessary. Indeed, in 2007, I suspect most video websites will disappear as the cost of traffic and infrastructure starts making deep dents into coffers. Those that remain will either have significant traffic, or will serve a niche audience with environments that integrate content and community.

For advertising and sponsorship funded content makers, this requires distribution flexibility: deals need to be negotiated with existing websites so content is sufficiently monetized, and video needs to be encoded in a variety of formats. With such a competitive market for eyeballs, and so much competition for quality content, it is clearly a sellers market for high profile content owners like AB. Indeed, with various content properties, AB might have been better served creating a presence on several large websites and video players and negotiating premium placement thus increasing its reach and visibility. And with more and more video sites providing some form of revenue share, the notion of building a new destination becomes less and less appealing. For those seeking pay per view models, the equation is even simpler. Integrating DRM and cash register systems, figuring out credit verification, etc. can be a daunting task. And on top of that, there is still the problem of traffic generation. As more and more sites (as well as video players) enable pay per view capabilities, the idea of building duplicate infrastructure makes less and less sense.

Those thinking about producing and distributing content online need to focus greater attention on their core product (i.e. the content itself) rather than on creating destinations where the product will be sold. Building traffic is expensive, and unless you are attacking a truly niche market where the creation of additional context and community will serve to greatly enhance the content, resources are better spent negotiating premium placement and cooperative marketing, leveraging existing traffic sources and reducing overall profitability hurdles.

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