Comscore recently published metrics validating Google’s lead position (21.5%) in the online video market. Well, no surprises there, especially with them acquiring the YouTube property.
The release also stated that 3 out of 4 internet users stre…

Those knowledgeable in the industry have appraised our library in excess of a US$50 million all cash valuation.

If Streaming VC, above, is correct re valuation, we could be looking at [by way of an example] 24 spots per 2 hr. movie x $25 CPM = $0.60 gross ad revenue per full length movie view - $0.30 for all overhead = $0.30 per view EBITDA x 13.5 valuation = $4.05 per view x 10 million total views per annum = $40.5 million value for a streaming site. This does not include other ad forms, e.g., static, nor pay per click thru buy [e.g., $ received for purchase of any product, such as an auto at the high end].

sheldon.jacobs@gmail.com

Also, he talks about pre-roll/post-roll, but doesn’t mention one company that does pre roll or post roll. All of the companies listed are either video search engines or performance-based ad networks (showing banners or tickers in user-generated content). He didn’t even mention the companies that are really working on pre/post roll - doubleclick, atlas, spotxchange, broadband enterprises, tremor, etc.

I really don’t think videos are great place for direct response ads. Even if you have all of the context in the world, it doesn’t mean it’s going to generate more sales. That’s obviously just an opinion.

Personally, we’re focused on professional, semi-professional or heavily monitored user-generated content and we’re working on getting the traditional agencies to sponsor those videos. we’ll beat any CPM that Scan Scout or any of the other performance-based networks can produce. That said, i think there’s room for lots of players and solutions. Performance-based is good for user-generated content. Brand marketing is good for professional content.

Our ads are very easy on user experience, and do not redirect away from the video. We also target advertisement demographically and have statistical optimization techniques to increase CPM for our Publishers.

We are in the process of selecting Publishers for our beta solution and finding partners for content.

We are also sponsoring Clickz Online Video Advertising Solution conference.

http://www.clickzevents.com/video/ny/adotube.html

Please take a look.

We have started a business (currently in stealth mode) that has just he kind of strategic model you describe. We have targeted large libraries (1,000’s of titles) of premium videos in an attractive niche that are not presently accessible online. Many of them can be acquired outright or licensed at relative bargain prices. PPV will be the primary revenue stream, but ad/sponsor revenues will also be a major source of income due to the demographics of the audience. Interested?

Convergence is enabling the consumer to have more power and ability to see products in their context of use (sports programming, home improvement, the online video delivery world, etc. etc.) and to then find the products, learn more, and buy what they have seen.

Exciting times!

Yes we do do ads, but the above list that Techcrunch has put together is alluding to ‘dynamic’ advertising, some of which will be algorithmically created and controlled.

But I believe, text ads will be main source of income for video sites for atleast 2 years till there are enough number of advertisers who can pay for video ad and viewers should not find it annoying or else they will simply close the site.

I remember, back in the early 80s, when Ted Turner was laughed at for presumably overpaying — $15 million — for all of the North American rights to the 1929 thru 1955 RKO Library, 742 titles in total [706 still copyrighted for 95 yrs from first studio sale offer] with only 24 produced in color, and later 86 titles colorized. Still later, Ted bartered the non-North & South American rights to the colorized versions in exchange for all South American rights for all 742 titles. The RKO deal was a bargain, i.e., CITIZEN KANE, BRINGING UP BABY, GUNGA DIN, KING KONG, THE INFORMER, SHE WORE A YELLOW RIBBON, THE CAT PEOPLE, THE THING FROM ANOTHER WORLD, Fred Astaire musicals, et al.

Saying that, as an online broadcaster, if one equates the current valuation of an average small to midsize TV station, you are looking at 13.5x EBITDA as an exit strategy. Much rather own all the content and keep 100% of the ad revenue than run the content consignment shop/flea market that most webcasters are doing, subject to the content owners’ renegotiations and contract cancellations.

Right now I know of one large content owner of long form color movies who just canceled his almost 2 yr old contract to provide his 3,000+ titles to a well known webcaster. They should have bought the library when offered, the jerks. Too much MIT and not enough Corporate Finance and Accounting 101!