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!