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Charting the Future of Internet TV

Charting the Future of Internet TV Adam Gerber

Originally a traditional advertising player, Adam Gerber switched his focus and enthusiasm to the interactive side in recent years. While his career includes positions at DMB&B, J. Walter Thompson, AOL and Mediaedge:cia, he's well known in the interactive marketing community for his work at MediaVest where he was worldwide senior vice president.

During his tenure at MediaVest, Gerber worked on new media platforms for global brands including Procter & Gamble. While details of his work with the CPG giant are confidential, it's believed he had a strong role in encouraging P&G to substantially broaden its online advertising initiatives.

In August of last year, Gerber left MediaVest, but quickly resurfaced in November as VP of ad products and strategy for an internet TV start-up called Brightcove. Since then, Brightcove has made news announcing partnerships with Publicis Groupe Media Ventures, AOL and Reuters. The company also earned support in the form of venture capital from Barry Diller's IAC. Diller also sits on Brightcove's board of directors.

To learn more about Brightcove, and the direction of online video in the coming years, iMedia's Managing Editor, Mario Sgambelluri, spoke with Gerber. Here's a list of the topics discussed:

Adam Gerber is responsible for developing and implementing advertising products, strategies, and initiatives at Brightcove by working collaboratively with publishers, affiliates, and marketers to identify next-generation consumer touch-point opportunities. He also represents Brightcove in industry consortiums and standards committees. Adam is widely recognized as a leader in interactive media and new media advertising with over 15 years of agency media planning and buying experience -- almost half focused on emerging platforms.

Mario Sgambelluri: What's Brightcove's one-sentence pitch?

Adam Gerber: Well, if the future is all about video -- whether it's what people call linear TV, broadband video, or video-on-demand today -- we're aiming to make it a much more open, democratic and relevant experience for consumers, marketers and content owners.

Sgambelluri: Business writer and ZDNet blogger Richard MacManus described Brightcove as a "disruptive start-up that could change the way we watch TV." How would you describe the way Brightcove -- and other services that bring video programming online -- will disrupt media viewing habits? Is it more than just watching an episode of Desperate Housewives on your laptop?

Gerber: It's much more than that! Unlocking existing video content that has been produced for one distribution platform or window is only one part of the opportunity. In the short-term, it will probably be the most talked about opportunity. But, the bigger win for content owners, and in the end consumers, is facilitating an open distribution platform for all things video. This means short form, independent, highly niche, commercial, amateur, etc. The reason that Brightcove (and its underlying open distribution model) potentially changes the way we watch TV, is because we are aiming to redefine what TV is. It needs to be about a lot more than just passively viewing predictable content. It needs to be about allowing consumers to choose, interact, and participate in the sharing and consumption of video content anywhere and any way they want.

Sgambelluri: Can Brightcove bring content to your television?

Gerber: Technically, yes. Content that is formatted for the [Microsoft] Media Center platform can be pushed to a television screen today. And we are working with other hardware, connectivity, and content partners to ensure we are a central capability they develop around as the IP-PC-TV convergence gains momentum. Over time, as the IP distribution platform is embraced, we envision Brightcove facilitating a substantial amount of content delivery directly to the TV either via our real-time streaming, or downloadable solutions.

Sgambelluri: Over the last month, we've seen an extraordinary sea change in the way television networks are making their content available (for pay). There's also BitTorrent which spreads video content (for free). What niche will Brightcove carve out in this environment?

Gerber: It's interesting. First, I have to say I don't think we are going to be carving out a niche. I truly believe we are going to be a leading provider of video services to publishers, consumers and marketers.

Here's the issue with pay for play, and P2P solutions like BitTorrent. They don't provide an end to end solution, and they aren't easily acceptable to the masses. Sure, large groups of people will pay for individual pieces of content. But I'd like to remind folks that the average person in the U.S. watches well over 1000 hours of TV content a year -- and no matter which study you look at, people aren't interested in shouldering additional cost for their media.

Video will continue to be, generally, a mass, ad supported experience. We're just all going to be watching/interacting with different things, on a variety of devices. For advertisers, there has to be a level of commonality/scalability even in a fragmented world. Advertisers need to be able to aggregate up-- and ensure they are reaching a viable number of consumers in an accountable way. And more importantly, we have to innovate how we deliver advertising so that clutter is minimized, relevancy is increased, and new formats engage viewers.

The recent pay-VOD distribution deals are interesting because they represent the first efforts by large scale networks to recognize the reality of how their viewers are evolving. But you'll notice none of the announcements effectively addressed common standards/models for advertising. In fact, the trials are all over the map. Some with advertising, some without, some just re-playing linear ads. And none of them dealt with ad accountability! BitTorrent, while trying to deal with DRM issues and make themselves attractive to content owners, really doesn't have a full publishing, monetization or consumer tools strategy. As of now, they are a form of efficient distribution that can be leveraged by content owners, or individuals. At the end of the day, I believe Brightcove is positioned to be a leading internet TV services provider-- for the broad publishing and broad advertising marketplace. I really don't see any other companies out there trying to do what we are doing.

Sgambelluri: Where's the advertising play?

Gerber: The advertising play is actually quite exciting. If you think about television today, it is quite limiting in terms of how it has shaped people's view of what "video" is. We (consumers) think of TV as 30 and 60 minute "shows" that fall into a fairly small number of content genres: news, sports, drama, comedy, etc. Advertising, as a result, has been confined. We've also been constrained to a one way, analog platform for the past 50 years!

The opportunity for Brightcove is to help content owners and marketers broaden consumers' video experiences and make them a much more dynamic, engaging behavior. And yes, I know those are the words of the moment-- dynamic and engaging. But I think we are differentiated from others who talk about these changing needs because we are building a solution grounded on publisher and consumer's control. At the end of the day, that is our mantra. We help publishers build content packages and distribution models based on the value of their content, and consumer demand; and, we are driving development of robust consumer save, share, interact, and re-publish tools that will enhance the control behaviors they have learned from initial web and digital cable experiences.

Why is this important from an advertising perspective? Because as the new media landscape evolves, we believe strongly that advertising will be most valuable when integrated into content that users view as relevant and which they are involved in. The Brightcove advertising play, specifically, will evolve over time as the marketplace matures. There is no way to predict what role we will play years down the road. But I can tell you this: in this initial phase of video expansion to the web and to new digitally connected devices, Brightcove will drive advertising innovation in a number of areas:

  • Most importantly, we will be delivering compelling web-based video opportunities to agencies and marketers to drive quality supply in an underserved marketplace.

  • We are building a highly valuable network of content that offers advertisers both breadth in terms of reach, and contextual relevance through vertical channel opportunities.

  • We'll be innovating how sites within the network are packaged, and how they are brought to market. That means everything from the level of control advertisers have in "building" their network, to the types of ad formats and integrations we innovate.

In an unconstrained distribution environment, there are limitless categories of vertical content that can blossom to create a viable marketplace. It's interesting, DVD's (to a degree) have offered a transitional solution to content owners, but packaging, distribution, and retail-related costs often make all but the most mass un-economical. That changes in an internet-driven video distribution world, where scale and efficiency can be driven through a network effect. At the same time, we will be developing solutions that create new communication solutions for marketers. There are a variety of video-based opportunities that make sense for advertisers, which are not financially possible in today's TV economic model.

For example, building a syndication platform that allows marketers to directly distribute video content to partners, affiliates, or the general marketplace. Or, having content-rich marketers serving consumers directly with value-add content. Take a company like Kohler, or Pella windows. Anyone involved with a home renovation would love to access a video library of ideas, instructional content, best practices, etc. Brightcove facilitates easy, syndicated or direct-to-consumer distribution of this content in a way that marketers have never benefited from before.

Sgambelluri: Do you foresee an explosive evolution in advertising (both creative and planning) to leverage internet TV? If so, please describe.

Gerber: I don't necessarily think it will be explosive, but rather incremental and iterative. If there is one characteristic people probably associate me with, its being pessimistic. In fact, I remember a Jupiter conference when I think someone in the audience referred to me as the "angry media guy," because I was questioning many of the industry predictions about the end of TV, and shift of all ad dollars to digital platforms by 2005 (I'm exaggerating just a bit to get my point across).

Bottom line is that the ad business is fairly mature. It's not going to change over night. There are very large businesses dependant on today's structure and workflow. You can't just tear that down-- it has to be reshaped slowly.

I think you are going to see a transition over the next 5-10 years by creative and media agencies to incorporate the flexibility and interactivity of the digital medium into their broad creative development processes and media planning and buying practices. A big part of the challenge will be simply getting organizations to change structurally so that they can accommodate a totally new way of doing business. Clients and agencies need to reshape organizations to support engagement-driven communications. That requires capability, personnel, process, and automation and its not going to be quick or easy. You'll see the "early believers" start doing interesting things this year. Ad evolution will act like a wave: there will be lots of experimentation going on below the surface, and we won't truly see the magnitude of change until the wave gets much closer in to shore.

Sgambelluri: To the extent that you can answer, what would you describe as your biggest success working on the P&G account at MediaVest? Through this experience, what's the most important lesson you learned with regard to interactive marketing?

Gerber: I can't really answer with any specificity to P&G, or their business. What I can tell you is what I've observed through my experiences at Digital Edge and MediaVest over the past six years, and at traditional agencies before that.

At the end of the day, success comes down to having passionate people on both the agency and client side who are willing to break down barriers. We are in a time of change, and the best ideas require existing processes and expectations to be modified, if not drastically changed. It's easy for TV and Print advertising to basically "happen by itself." It's understood, and it's formulaic to a certain degree (for the creatives in the audience, I don't mean the ad concept and idea are formulaic, just the business implementation of planning, buying and executing).

Interactive marketing is new, it's dynamic, and it's unpredictable. As an agency, you have to make sure your clients understand this and are excited by it. As a client, you have to be open to more risk. At the end of the day, though, the upside is much more valuable: it's an investment in the future.

Sgambelluri: In an October 21, 2002 interview with iMedia, we asked you, "What remains the industry's biggest stumbling block?" You answered,

  • Non-traditional ad delivery, reach & frequency evolution, impression measurement, bigger ads/less clutter, improved branding research, email marketing clean-up, creative unit/technology standardization, and terms & conditions.

Which of these do you feel we've made progress with? Are any of there bigger problems today? And what new stumbling blocks have emerged recently?

Gerber: I think the industry has made good progress in a number of areas. Thanks to efforts primarily of the IAB, we now have a global ad measurement standard, and proposed audit and certification guidelines. This work will become a core foundation for future advanced TV/video accountability standards as things are looked at more holistically.

We also have seen what I think is great progress in the area of ad format/unit standardization, Again, the release by the IAB of their Universal Ad Package drove this, and work by key publishers, agencies and rich media companies to align to it made it a success.

I think we've made some progress on T & C's (terms and conditions). We have a document that's been negotiated by the IAB and 4As. Unfortunately, some agencies and publishers continue to try work outside the bounds of those guidelines. One reason for that may be that we have new, evolving issues that need to be incorporated into the document related to data, video, interactivity, etc.

Luckily, I think the email issue has become a non-issue-- at least for large scale marketers using it for acquisition purposes. Legislation related to spam along with new filtering technology has made email marketing a much less attractive option. But it still has tremendous value from a CRM, and opt-in perspective.

I still think we have a good amount of work to do in the area of branding research, reach/frequency and next-generation metric accountability. Those are tough areas. We have a basic understanding of online media's branding impact thanks to work by Dynamic Logic and Rex Briggs (Marketing Evolution). We need to dig much deeper to understand its relative value versus other potential investments -- especially in the area of video. In terms of reach/frequency, in my opinion, we are on the cusp of really having the current approach to video measurement fall apart. Nielsen data is just not going to be able to keep up with growing fragmentation across programming outlets, devices, and on-demand experiences. For marketers who are activating video in linear TV, via the internet, and through on-demand platforms like iTunes, there just is no platform agnostic measurement solution. Project Apollo has promise to get us there, but it is not intended to be a currency driving platform. It will be interesting to see how this measurement area evolves.

Sgambelluri: Anything you wish I would have asked you?

Gerber: I think I've already taken up too much space, don't you think! Seriously, we could go on endlessly about how our business is changing. Hopefully, I've made a little bit of sense with my answers, and sparked some thoughts amongst your readers.

Sgambelluri: Brightcove seems poised to offer both consumer generated and mainstream content. Could you describe the implications to advertisers?

Gerber: I'm not sure the two are mutually-exclusive. I think the real issue you are talking about is that Brightcove is poised to facilitate much broader and deeper distribution of video content than currently available through traditional cable and satellite offerings. What the internet does inherently well is it allows for on-demand availability of massive amounts of customized content and information to individuals in fairly easy and global ways. That reality just doesn't exist in today's video distribution model of the MSO (multiple system operator; cable) or DBS (direct broadcast satellite) provider.

Our first priority and focus is facilitating content rights holders and producers to deliver their content in new ways to the largest possible audience. Today, by definition, most of the scale related to this type of content resides in the hands of existing media companies. So naturally, we are gravitating to service that market. We also, however, believe in the shift to a more democratized content development landscape, and we are working with independent producers and small start ups that are focused on highly specialized and vertical content for specific audiences. From a consumer generated media perspective-- we absolutely want to be part of that phenomenon, but in a way that recognized the potential value of content.

Sgambelluri: What level of consumer engagement can marketers expect from internet TV? Will it be closer to the internet (active) or television (passive) side of the continuum? Or something completely different? If so, please characterize.

Gerber: Unfortunately, there is not one easy answer to this question. What we all have to start doing is recognizing that "we" (content owners, marketers, etc.) are no longer in the driver's seat. We can't push a model or solution into the marketplace and just expect consumers to react in a predictable and universal fashion.

Consumers are in control, and consumers have individually driven motivations. I think you are going to see some internet-based video (which could either be displayed on a PC, TV or mobile device) evolve similarly to today's passive TV because there just are going to be things people want to keep watching passively.

Bottom line, people are going to want to continue to "veg out" in front of their video display device at times. But there will also be numerous video-based activities that evolve as much more active behaviors (controlling sports broadcasts via camera shots, replays and real-time inputs; consuming cars and real-estate content; actively participating in community-based content; engaging in next-generation and real-time reality-based programming; etc.). These new behaviors are going to open up a variety of new advertising opportunities that allow the marketer to become a much more active participant in the video experience, and value exchange proposition to consumers.

Sgambelluri: Streamingmedia.com suggests, "we're now at a tipping point in the convergence of television and the Internet." Do you agree? If so, how close are we to a tipping point in online ad spending?

Gerber: Well, I'd agree we're at one of many tipping points that will drive a continued convergence between one-to-many, one-way terrestrial TV and truly internet driven on-demand interactivity. Let's be honest with ourselves - the TV and internet are not going to be connected in any simple, meaningful way for consumers for a number of years. Yes, those of us who want to spend extra money and time making the connection can. And slowly, we will see distribution companies evolve set-top-boxes to incorporate internet based functionality. But whether those solutions are open, or gated, remains a big question.

We are seeing "tipping point 1.0" in my opinion. There is enough technological reality now to actually facilitate convergence-- so we are seeing early adopters do it, media companies experiment with it, and the press write about it. My guess is that after all the excitement of late 2005, we hit a bit of a barrier in 2006 as folks really dig into business model implications, rights issues, standardization, etc. To me, "tipping point 2.0" probably comes a year or two from now once a lot of the business issues begin to be dealt with and we see programmers begin to legitimately program for the internet video platform as opposed to just repurpose content. Then comes "tipping point 3.0" - probably by 2009 or 2010, when you start to see significant erosion to the traditional TV ad marketplace and a shift in ad dollars to new video platforms. I think we are going to see strong year over year growth in internet video advertising, but we are starting from an exceptionally small base (about $225 million, projected for 2005). There are a number of things that have to happen before a converged internet video marketplace reaches a tipping point.

Sgambelluri: I don't have cable. However, I love specific cable channels and shows, and I would pay to get these a la carte. (I should also note that I'm a podcast fanatic.) Does a service like Brightcove's stand to change my media habits? (My MP3 player has.) How about your own media habits?

Gerber: Absolutely. A service like Brightcove makes it easy for programmers to get their content directly to consumers who are passionate about it. So in a way, Brightcove facilitates on-demand -- or a la carte as you put it -- content access. I prefer not to use a la carte because I think it has some fairly specific connotations related to traditional cable distribution and I'd rather not get wrapped up in that. To put it simply: the internet as a distribution platform will allow cable programmers (and others) to offer specific content to viewers on an ad, subscription, rental or ownership basis.

In terms of my media habits - it's amazing to think back 10 years and evaluate how I've changed. I get virtually all my news content online-- more and more via video. I don't think of media experiences as platform specific anymore. When I go online, I now expect text, video, audio and interactivity as potential engagements. I see this affecting my traditional TV experience as well-- both from a control perspective, and an expectation perspective. I don't listen to the traditional radio anymore. I have Sirius in my car and an iPod with me when I travel. I watch virtually all of my TV on a DVR. It's a far cry from 1995. Just imaging what it's going to be like in 2015!

Adam Gerber is VP, sales development and marketing for the ABC Television Network. He was named to this position in March 2011 and reports to Dan Longest, SVP, ABC sales marketing. Gerber leads a team supporting the ABC sales organization focused on...

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