Citing a lack of demand for user-created clips, the online video site is abandoning amateur content in favor of professional shows
Drew Massey launched Web video site ManiaTV in 2004 with an idea so fundamental in the media world that it had become cliché: Content is king. Whatever the medium, audiences and advertisers want high-quality, professionally produced programs. Schlock doesn't sell.
Then came video-sharing site YouTube, throwing such age-old wisdom out the window. Online audiences and advertisers didn't care about production quality or established talent after all. They wanted raw footage served up on sites where users supplied the shows. The Web was about skateboarding dogs, not Tony Hawk.
So ManiaTV added channels where users could upload their own videos alongside live shows with established performers, such as comedian Tom Green. The site grabbed traffic—more than 10 million viewers a month, according to ManiaTV's internal statistics. But, strangely, more than 80% of viewers—and all of the advertisers—tuned in for the professional content. "People liked good quality entertainment and advertisers liked quality branded entertainment," says ManiaTV Chief Executive Peter Hoskins, who took over from Massey this year. "Advertisers wanted to distance themselves as far as they possibly could from the user-generated content."
Amateur Hour Is Over
ManiaTV learned its lesson. This week, the site is relaunching itself, sans 3,000 channels of user-created content. Instead, ManiaTV will focus exclusively on original, professional programming. The new site will feature myriad ManiaTV-produced shows, including Dave Navarro's weekly interview show, Spread Entertainment, and programs by Hollywood partners such as Nielsen's Billboard magazine. The company also plans to open its own Hollywood studio in November to film more original shows with professional talent.
ManiaTV's experience serves as a warning for hundreds of other video-sharing sites hoping to cash in on the seemingly never-ending supply of free, amateur content flooding the Web. While user-generated videos offer an ample supply of inventory to sell to marketers, at little cost to the Web host, most big brands don't want to associate with it. And, without strong demand, the clips quickly become cheap commodities—making it difficult for all but the largest sites, with hundreds of millions of videos and viewers, to wring much money from them. "There are definitely supply and demand dynamics at play here," says Michael Walrath, founder of Right Media, an advertising exchange acquired by Yahoo! (YHOO) (BusinessWeek.com, 3/6/07).
For many major brands, user-generated video content poses additional risks. For one, much of it emanates from largely unknown and untrustworthy sources, and it varies wildly in quality. As a result, advertisers who buy on user-generated pages can't be guaranteed their brand will appear next to content with which they want to be associated. A family-film advertiser, for example, doesn't want to risk having its G-rated movie trailer appear beside a poorly shot video of a college kegger or a would-be Playboy bunny modeling provocative clothing. "Advertisers are afraid their ad will show up next to racy content," says Tim Vanderhook, chief executive and co-founder of Specific Media, an advertising network that uses Web-surfing information to better target and raise the price of ads on Web sites.
Some of the quality concerns surrounding user-generated video content will subside as sites' ability to automatically identify video subject matter improves. Already, there's technology that screens videos for too much flesh color, an indicator that a clip may contain porn. Audio identification technology can identify video subjects and match videos against potentially copyrighted material that could expose Web companies and advertisers to lawsuits. But identification technologies are far from perfect. Audio tracking technology, for example, can't necessarily distinguish between a video discussing sport-utility vehicles and, say, a critique of SUV carbon emissions.
And there's a bigger problem for video-sharing sites. Much of the amateur video on the Web simply isn't all that good and doesn't attract much traffic. A recent unscientific scan of the most watched videos on YouTube showed more professional and semiprofessionally produced videos than amateur ones. "The user-generated world was dumpster diving for gold, and we didn't find any gold in the dumpster," says ManiaTV's Hoskins.
An Easier Sell
ManiaTV has little problem selling its professional shows, says Hoskins. Advertisers such as Wrigley (WWY) have already worked with the company. As in the early days of television, single brands typically sponsor a show or certain episodes of a show. The company designs ad campaigns for individual brands, offering product placement, short ads within the video itself, and interactive advertisements on the sponsored show's home page.
Google (GOOG) executives appeared to acknowledge the demand for professional content over user-generated material when they announced their plans for advertising on YouTube (BusinessWeek.com, 8/21/07). Instead of putting ads on all videos, YouTube says it will start by placing ads primarily with professionally produced videos from partners. However, Google does plan to place ads on some amateur clips and has announced a revenue-sharing deal with select content providers (BusinessWeek.com, 5/9/07).
As for the users who had their content on ManiaTV, Hoskins suggests they bring it to a competitor with a higher volume of videos. "We would love for them to go to YouTube and have great success there," he says.