That’s a lot of videos! As usual, no word on financials, profitability, etc. But there is plenty of congratulatory back-slapping here and here.

Best part, by far: A brief anniversary message from Conan O’Brien, in which the comedian connects YouTube’s rise with America’s decline: “Nobody actually makes anything anymore. We’re all watching monkeys in propeller hats flush themselves down a toilet. And that’s why India is kicking our ass. And China, and pretty much everyone else. Switzerland, kicking our ass. Guam, way ahead of us.”

And he effectively sums up Web economics, or lack thereof:
“That’s not the point of the internet. It’s not to make money. It’s for someone you’ve never met, who’s a nerd, in Palo Alto, to make money.”

O’Brien also offers up his five favorite YouTube clips. Here are four of them. To see the fifth (something inscrutable and German) you’ll have to visit the site. If you’re time-pressed, definitely go with the cat.

But Adobe (ADBE) says the majority of the Web’s video uses its Flash standard. And if you surf the Web via Apple’s (AAPL) iPad, you’ll quickly find clips that don’t work on the Flash-free device. Instead of video, you’ll confront the dreaded blue box.

So who’s right? Depends, of course, on whom you ask. But the answer is probably somewhere in the middle.

Earlier this month, Encoding.com said that 66 percent of the videos it processes are in iPad-friendly H.264, adding that this number reflects the wider Web. But MeFeedia, a video search engine, which says it catalogs millions of videos from 30,000 sources, pegs the H.264 universe at a much lower number, 26 percent of all clips.

The two data sets aren’t necessarily at odds. Encoding.com is looking at clips it has been paid to…encode. while MeFeedia is looking at a wider range of clips, including lots of old ones that publishers either don’t want to re-encode or haven’t gotten around to re-encoding yet.

And it’s a perfectly rational decision for some publishers with big video archives–say, the New York Times (NYT)–to encode only their newer clips in H.264 for now. Because the new clips are probably responsible for the majority of their views.

It’s also worth noting that MeFeedia says it is tracking videos around the world. So its numbers are skewed by giant video sites like China’s Youku.com and Tudou.com, which are all-Flash.

Still, the H.264 cohort is growing. MeFeedia says that when it did the same tally in January, it found just 10 percent of clips in H.264. Easy enough to explain the jump as an “iPad effect.” And MeFeedia CEO Frank Sinton says that he has seen many publishers move aggressively to make their stuff iPad-ready: He cites Break, Vimeo, CNN and DailyMotion, among others.

No Flash Lego speed design from Tony Gil on Vimeo.

[Image credit: Tony Gil]

Example A: Time Magazine, which is asking $4.99 a week for its app–the same price you’d pay if you bought the paper edition at a newsstand.

The electronic version of the weekly does contain some bonus features, like extra photos and video clips. And some iPad users seem to be okay with it: As I type this, the app is ranked No. 16 on the iTunes “top paid” list.

But to hear the digerati tell it, Time Inc. is crazy to ask users to pony up full price for a digital good that’s available for free on the Web–even for Apple’s (AAPL) iPad browser. What are the people at Time Warner’s (TWX) magazine unit thinking?

I asked them and got this response:

We are offering a compelling, robust and beautiful product. The production of this high quality, fact-checked reporting takes resources. We believe there is a real value to this product and as consumers experience it, they will agree. We are currently only offering single copy sales, just like at your local newsstand–and, the price is the same as the physical newsstand. We will soon be offering subscriptions–both digital subscriptions and print/digital bundled subscriptions. We anticipate these subscriptions will be discounted off the newsstand price.

Two notes:

• We’re less than a week into the great iPad experiment and none of this pricing is set in stone. So it’s entirely possible that Time Inc. will eventually lower the price for some of its iPad apps. But the company can’t do that if it starts low to begin with.
• Note that the publisher says it will offer subscriptions at a discount from newsstand prices–not from paper prices. That’s because magazine publishers famously give away their subscriptions for a fraction of their cost. If you Google “Time magazine subscription,” for instance, the first thing you’ll see is a $20-per-year offer, (“Save 92% of the cover price!”). I wouldn’t be surprised at all to see a scenario whereby the publisher asks subscribers to pay more for a tablet subscription than for a paper-and-ink version, at least for some titles.

Apple (AAPL) has been pushing the TV networks to get on board for the iPad launch, but the industry is in no rush. Like everyone else in media, TV execs are trying to figure out what the iPad means for their pricing power. Which means people who are used to watching lots of free top-tier TV on the Web won’t get the same experience on the iPad this weekend.

Meanwhile, the networks have resisted Apple’s lobbying to drop prices on the stuff they sell at the iTunes store. So if you want to watch the latest episode of “The Simpsons” on your iPad this weekend, it’s still going to cost you $1.99 (and $2.99 for high-def).

And while Hulu is building an app for the iPad, the plan, as I reported in February, is to make it part of a subscription offering. That’s scheduled to roll out sometime this year, but it won’t be ready in two days.

Where things stand now:

• Hulu has the basics of a subscription plan, which includes access to an iPad app, worked out, sources tell me. But it will take a while for the company to negotiate rights clearances. A key part of the plan is to offer users the ability to watch Hulu on mobile devices, and the joint venture needs to wrangle permission from its programming partners to do that. So no Hulu app Saturday. When might we see one? Within “single digit months,” says an insider with a wry sense of humor.
• Apple, which pushed a TV subscription service last fall, switched gears in recent months and tried persuading TV executives to cut their iTunes prices to 99 cents. But executives at two of the big four broadcast networks–CBS and Fox–have told me they’re not dropping prices on their big shows right now. No word from Disney’s (DIS) ABC or GE’s (GE) NBC yet. It’s possible that ABC, which has tight ties to Apple CEO Steve Jobs and is already promoting the iPad on its shows, may drop prices unilaterally. But my understanding is that Apple was aiming for across-the-board cuts.
• As The Wall Street Journal notes, both CBS (CBS) and ABC are planning to deliver free TV to the iPad on Saturday. ABC will do so via an app, and the Journal says it could have a “a large number” of shows at launch. But CBS, which will use a Web site customized for the device, will have only one full-length program–“Survivor”–and some short clips. You can blame encoding issues for the limited offering, but if CBS really wanted to get a lot of stuff on the iPad at launch, it would.
• One intriguing possibility for Saturday: There are reports of a Netflix (NFLX) app that would let subscribers to the company’s “Watch Instantly” service use it on the iPad. That’s not free. But it would be cool.

Google’s (GOOG) video site says this is one of the “biggest redesigns in YouTube history,” but my hunch is that most YouTube users won’t notice any difference at all since they’re paying attention to the video clips and not the window dressing around it.

YouTube is briefing the press a little later today, and a PR rep promises that the email is merely a “condensed sliver” of what the company will be talking about. If true, I’ll update with anything relevant.

UPDATE: Apologies, wasn’t able to listen to the call, after all. If you want to play reporter, you can take a gander at the press materials Google provided (before and after screenshots, metrics to support the change, etc) here.

Dear Partner,

We want to provide you with an update on YouTube’s new video page, which we’ve been hard at work on for the last several months. You can read more about it here:

http://youtube-global.blogspot.com/2010/01/video-page-gets-makeover.html

http://youtube-global.blogspot.com/2010/02/latest-changes-to-video-page-new.html

On Wednesday, March 31st we’re happy to let you know that we’ll be transitioning all YouTube videos to this new video page.

As a result, we’d like to highlight a couple items that will be of interest to you:

* The channel banner placement will change: Branding on the video page moves to a more prominently placed (albeit smaller) banner on top of the video, substituting for the text channel name and link. Please upload a graphic with the following dimensions: 25px (height) by max 170px (width is flexible up to this amount). Instructions on how to edit or change the
banner are here:

http://www.google.com/support/youtube/bin/answer.py?&answer=172994

This banner will continue to link to your channel. Please update your banner if you have an arrow pointing to the subscribe button or another area on the page.

* The “Subscribe” button will move to a more prominent location at the top of the page: As you can see in this blog post:

http://youtube-global.blogspot.com/2010/02/latest-changes-to-video-page-new.html

The “Subscribe” button will now be at the top of the page, to the right of your channel banner…so it will stand out even more :)

* We’re introducing a new “see more videos” pane: This new “more videos” area on top of the video allows for seamless exploration of content from your channel; click on the arrow next to the number of uploads to access a grid displaying all of your channel’s videos. This makes it easier for users to browse your whole library while watching one of your videos.

This new video page makeover is one of the biggest redesigns in YouTube history–and we’re excited to make YouTube a better place for you and your content!

Lastly, we want to remind you that YouTube sends occasional product-related email communications that are relevant to our Partners. To ensure that you’re eligible to receive our updates, check your Email Options settings within your Account and opt in. You can see the instructions on how to do this by following this link:

http://www.google.com/support/youtube/bin/answer.py?answer=176643

Still reading? Okay, here’s your Easter egg, a classic Spencer Davis Group YouTube recommended to me this morning:

[Image credit: Kevin Dooley]

Remember those Microsoft ads starring Bill Gates and Jerry Seinfeld? The ones that confused and upset the blognoscenti and vanished from TV after just a brief stint in 2008?

All part of the plan, Microsoft says now. David Webster, chief strategy officer for Redmond’s central marketing group, tells TechFlash that the ads were supposed to be confusing. So you’d pay more attention to them, and to the next several campaigns Microsoft had loaded up.

“We figured that that sort of obscure nature of the communications would make people lean in a little more closely to see what we were going to next,” he says. “And that part certainly worked, in the sense that everybody leaned in, and they paid a lot more attention to our subsequent work than I think they might have had we just started with it.”

This actually sounds like a plausible explanation to me. And I seem to be in the minority of people who actively liked the ads. Still, Webster and his co-workers certainly seem to have had their feelings hurt by the public raspberries the ads generated. Check out the defensive tone here:

But you know, it is what it is, and they will live forever in Internet posterity as being either something that people treat as a cult classic, or as a random curiosity. But I still get mail from people saying, “Hey, could you guys do that as a sitcom? I’d love it as a web series, I think they had great chemistry, I’d like to see them do it in the future.” Like anything, things become cult classics for some people for some reason, and there’s a core group of people who really wanted to see us go further with those.

It’s also interesting that many of the original clips of the ad have disappeared from YouTube, though you can still find a few that give you a good sense of what Microsoft was trying to. Go ahead and refresh your memory:

The important takeaway, which I’d basically deduced on my own: He’s definitely not Ben Folds.

Merton declines to identify himself for Mashable’s Brenna Ehrlich. Though I gather that once his identity is unmasked, it won’t be anyone you’ve ever heard of anyway.

Ehrlich’s Skype chat with Merton runs 15 minutes, and if you’ve got time, I suggest watching the whole thing, because it’s both fascinating and charming. It also rubs off just a bit of charm from the phenomenon, though. Because the truth is always a bit less fun than the story you cook up in your head.

If you’re time-pressed, here are my notes:

• Merton plays piano all the time, though it’s not clear if he’s a professional. He’s not in a band. He primarily does improvisational stuff in the “brooding, introspective” vein of Keith Jarrett and Tori Amos.
• He filmed the Chatroulette videos over two nights, in three-hour sessions. He and his pals edited the footage to three five-minute clips.
• He put the clips up on YouTube as a lark and initially kept them private. Now they’re approaching five million views, but he says that wasn’t his intent. “i didn’t give it some huge web site like College Humor… i guess that’s why they call it viral.”
• He did a new session a few days ago, and not surprisingly “my experience was very different because everyone knew who I was…it’s more fun one way, and a little less fun another way.”
• What about all the naked dudes Chatroulette is famous for?  “I’m not deeply creeped out by those people.” But he understands why other people might be. “I don’t think there should be any children on Chatroullete ever, for so many different reasons.”
• He loves Ben Folds’s tribute, of course. He also understands why casual observers might think the two men were the same person. “We’re both white guys who play the piano.”
• Putting the stuff up anonymously “wasn’t really a strategy,” but it was “empowering.” Merton knows this can’t last forever. “Eventually, someone’s going to find me out, and that’s fine…I’m pretty sure that I would have the most fun if i went undetected for as long as possible.”

Not addressed in the interview: How is Merton going to cash in on this? And why did Google (GOOG) force him to take down his clip yesterday?

I think I can answer the latter question. It seems that some of the Chatrouletters in the clip made privacy claims, and you can figure out which ones when you watch the re-edited video.

I’m not exactly sure why Viacom dug up YouTube’s profit-and-loss statement and balance sheet from its pre-Google days, but I’m glad it did. You can see the entire thing, which covers YouTube’s birth in the spring of 2005 through August 2006, at the bottom of this post.

But these excerpts give you a very good snapshot of what was going on in the company’s early days–hypergrowth, followed, eventually, by revenue (click to enlarge):

Some context: Chad Hurley registered the YouTube domain in February 2005, but the site wasn’t up and running for a few more months. Co-founder Jared Karim uploaded YouTube’s first video, “Me at the zoo,” in late April 2005.

By December 2005, users were uploading 6,000 clips a day, and the site was streaming 2.5 million videos a day. By February 2006, those numbers had jumped to 20,000 and 18 million, respectively. In July 2006, YouTube users uploaded 2.1 million clips and watched three billion of them.

Which explains the skyrocketing Web-hosting bills. But do note the burst of revenue from direct sales in August 2006, which allowed the company to generate a gross profit. A lot of people assumed that YouTube had to find a buyer like Google (GOOG) a few months later because it couldn’t pay its own bandwidth bills. But these numbers suggest that this may not be the case.

Also of note for Web video and Web ad nerds/historians: Check out the detailed breakdown of YouTube’s ad revenue and hosting costs, both real and projected, circa December 2005.

youtube pl

balance sheet

Because if you’re trying to handicap the way the copyright lawsuit pans out, today’s document dump won’t do much to help you. There are revelations here, but they’re of the minor and historical variety, and I’ll get to some of them later.

No smoking gun, though. Just a lot of chest-beating and desk-thumping as both sides talk past each other.

Still, it does make for fun reading if you’re of a certain troubled mindset. If you’re not, here’s a summary:

Viacom’s case: YouTube was full of content that wasn’t supposed to be there, and both YouTube and Google knew it.

Of course they knew it! Anyone who visited the site in 2005 and 2006 knew it. The problem was what to do about it.

And that’s the most interesting part of the emails and IM exchanges Viacom has dug up: They let you watch YouTube’s co-founders, and later, Google executives, argue over the best way to keep the site growing like a weed while fending off the lawyers.

Actually, they knew the lawyers would show up eventually. “Ok man, save your meal money for some lawsuits! ;) no really, I guess we’ll just see what happens,” co-founder Chad Hurley tells partners Steve Chen and Jawed Karim via email in July 2005, as the three men decide to leave some copyrighted stuff on the site.

As as YouTube boomed, Google (GOOG) was trying to figure out how its lackluster Google Video site could compete. The big debate, according to former executive David Eun: “Whether we should relax enforcement of our copyright policies in an effort to stimulate traffic growth, despite the inevitable damage it would cause to relationships with content owners.”

Google’s eventual answer, of course, was to buy YouTube. But it went in with open eyes. A due diligence report estimated that just 10 percent of the “premium” stuff on the site was authorized.

Google’s case: Viacom–which talked about buying YouTube–was perfectly happy to use our site to market its movies and TV shows. Until it wasn’t.

Of course it was! In 2005 and 2006, all of the entertainment companies were desperately trying to get their clips in front of the site’s huge audience. Even more so at Viacom (VIA), whose youthful audience was spending lots of time on YouTube.

And the fact that Viacom executives, who had lost MySpace to Rupert Murdoch (remember when MySpace was a world-beater?), were thinking about buying YouTube–in part so Murdoch wouldn’t get it–shouldn’t be surprising, either.

Google makes a lot of the fact that Viacom “secretly” uploaded videos to YouTube, either via its employees or from marketing shops it hired. But I don’t get the impression that the “secret” uploads were supposed to dupe YouTube. I get the impression they were trying to dupe YouTube users into thinking the videos were edgy and cool.

“The goal is to make it look “hijacked,” an executive at Viacom’s Spike network told the producers of a mixed martial arts show, describing a video he gave them so that they could seed it on YouTube. The idea was to make the clip “look as though it was leaked out by production.”

Viacom’s embrace of YouTube does bolster Google’s case in one way. Google shows, fairly effectively, that Viacom’s lawyers have had a hard time figuring out which YouTube clips the company authorized. If Viacom can’t figure out what’s supposed to be on the site, Google argues, how do you expect YouTube employees to know?

So. Strip out all of the depositions, documents and emails, and we’re back to where we started. This case will hinge on the way the court decides to interpret federal copyright law.

Viacom argues that YouTube is a video version of Napster or Grokster–designed to profit from intellectual property it knows is stolen. And Google argues that it’s doing exactly what the Digital Millennium Copyright Act tells it do–asking its users to behave, hoping they do, and taking down offending clips when their owners ask them to.

So pay attention to that ruling–it’s going to be really important. But unless you’re paid to keep an eye on digital media, you can ignore most of today’s paperwork.

[Image credit: Michele Hubacek]

Another sign that mobile ads are still in their infancy: Google isn’t using its favorite video ad format on the YouTube ads.

Boot up your Apple (AAPL) iPhone or Android handset to m.youtube.com today and you’ll start seeing ads like these:

But while you may see banner ads on YouTube’s mobile home, search and browse pages, you won’t see ads on the clips themselves.

Those will come eventually, Shishir Mehrotra, YouTube’s director of monetization, told Advertising Age, but in the near term, it’s too difficult for the company to pull off. That’s because there are too many handsets, with different standards and requirements, to support.

That’s a bummer for the Google (GOOG) unit, since it is particularly fond of the “overlay” ads that run on the bottom third of many of its clips. Then again, mobile is still a tiny market opportunity for YouTube: The company says it serves “tens of millions of views per day,” which sounds like a lot until you consider that the main site is serving a billion views daily.

Note that YouTube doesn’t seem to be advertising yet on its specialized iPhone app. Wonder what to make of that…

The biggest hit so far: An ambitious novelty called “I Am T-Pain,” which allows users to record songs using the rapper’s sort-of-trademark “autotune” voice processor. If you don’t know what that means, best to check it out here. (Or check out the demo clips of T-Pain and other Smule apps at the bottom of this post.)

All this success has translated into real money–more than four million paid downloads, at something like $2.50 a pop. And this has allowed Smule to quickly raise $13.5 million in venture money from the likes of Shasta Ventures and Bessemer Venture Partners.

I assumed that some of that money would be earmarked for moving apps to other mobile operating systems, particularly Google’s (GOOG) Android OS. Nope, says Smith–he’s working exclusively through Apple (AAPL).

Smith is part of a small but vocal chorus of app developers who say they don’t want to move to Android, even though it is growing quickly. His complaints: He doesn’t like the way the store merchandises its wares, and he doesn’t want to have to create different apps for each handset Android supports.

In fairness, Apple has its share of vocal app developer critics as well, and that group got louder this month during the iPorn imbroglio.

And if you wanted to be overly cynical, you could point out that Smule has been a featured Apple partner for some time. Smule’s products have gotten stage time during Apple product announcements and have been highlighted in the company’s press releases.

But Smith isn’t betting the future on Apple, either. His business plan involves generating revenue from other places besides the iTunes app store. I’ll let him explain in this interview, which we taped during Billboard’s Music & Money event yesterday.

]]> http://allthingsd.com/20100305/an-apple-app-star-explains-why-he-wont-work-with-android/feed/ 0 http://allthingsd.com/20100304/did-web-video-just-stall/ http://allthingsd.com/20100304/did-web-video-just-stall/#comments Thu, 04 Mar 2010 22:46:47 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=17003 Did we finally get our fill of Web video?

Maybe, according to comScore: The Internet traffic counter says Americans’ appetite for Web clips actually shrank in January.

ComScore says 173.4 million people watched 32.4 billion streams that month. That’s down from 177.6 million and 33.2 billion respectively, in December.

A minor dip, to be sure. Bear in mind that the number of videos streamed is more than double the total we saw a year ago.

And maybe you can chalk the month-to-month drop on the Christmas holidays, which give people lots of downtime that they tend to spend on the Web.

Still, given that we’ve been consuming ever-increasing amounts of video for quite some time, it’s worth noting.

It’s also worth noting that comScore’s (SCOR) numbers don’t mean exactly what you think they do.

When comScore says that Hulu streamed 903,078 videos in January (down 10 percent from December), it doesn’t mean that Americans watched 903,078 shows. It means they watched some combination of 903,078 clips and advertisements, because comScore counts them both as streams.

In other words, a single episode of say, “The Daily Show,” could count as multiple streams, depending on the number of ads Hulu showed.

There’s nothing wrong with counting this way as long as we all know what the numbers mean. But comScore itself acknowledges that it’s confusing. And the company says it plans to break out ads and content at some point in the nearish future.

ComScore’s competitor, Nielsen, meanwhile, already distinguishes between the two. (If you want more on this, check out Hulucination, an awesomely obsessive blog by Big Money writer Chadwick Matlin).

Back to the numbers. Beyond the dip, pretty much the same thing we see every month: Hulu–owned by News Corp.’s (NWS) Fox, GE’s (GE) NBC and Disney’s (DIS) ABC–streams more video than anyone. Except for Google’s (GOOG) YouTube, which dwarfs everyone.

Meanwhile Vevo, the “Hulu for music videos” owned by two of the big music labels, shows up on the Top 10 list in its first full month of operation.

In other news: Did you know you can choreograph a figure-skating routine to “Smells Like Teen Spirit”?

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