Online Video: Threat or Opportunity (2012 NAB Show)

O n lin e V id e o M a r k e t : T h r e a t , O p p o r t u n it y , o r B o t h ? A p r i l 2 0 12Andrew TaylorVP of Business Developmentataylor@grab-media.com(773) 450-9461 1

• Video viewership has changed fundamentally• The economics of the business have shifted• There’s hope (for those who want it) 2

Company Investors • Offices: NY, VA • SoftBank Capital • 296MM Monthly Streams* • SCP Partners • 24MM Monthly UVs* • Longworth Venture Partners • Court Square Ventures Media Companies that create content and need reach, brand safety, and increased revenue (with brand and rights control) Publishers that need high quality content, software to create world-class experiences, and new revenue streams Advertisers that are looking for a brand-safe way to reach valuable demographics across distributed outlets* December 2011 comScore VideoMetrix 3

April 10, 2002 April 10, 2012Viewing 22.6MM 2.8MM 3.1MMAudienceCost per $10K? $7MM $4-6MMepisode $20K?PrimaryDistribution 4

T h e n atu re o f vi d e o co n su m p ti o n h as sh i fte d to w ard s “vi d e o sn ack i n g” Proportion of Content Type – Watched in the Past 24 Hours 80% 70% 60% 50% 40% 30% 20% 10% 0% Full Length Movies Full Length TV Shows Short Clips T h e a v e r a g e v id e o v ie w e d o n the w e b w a s 5 m in u t e s lo n gSource: Yahoo & Interpret study as reported on TechCrunch, by Erick Schonfeld, 6/29/2011 5

Despite lots of press, the jury’s still out on the success ofYouTube’s much-hyped professional content channel strategy 7

Distributed media far outpaced growth by destination sites over the last 12 months. It even grew faster than Hulu, Facebook, and Vevo 2011 Growth in Aggregate Video Views by Property Type* 146% 153% 82% 49% 54% 37% 28% 13% 17% Aggregation General Video Content Total Internet YouTube Exchanges Video Ad Syndicators Web Specific Creation Networks Properties Major Media Distributed MediaExampleProperties* January to December 2011. Property types based on Video LUMAscape accessed 2/14/2012. Aol re-classified as Content Network based on preponderance of 5Min streams. 9

O n li n e vi d e o ad d o llars are n ’t flo w i n g to trad i ti o n al m e d i a… th e y’re flo w i n g to th o se th at aggre gate au d i e n ce acro ss si te s comScore Video Metrix Top 20 Properties* 1. Hulu 11. CBS Interactive 2. ADAP.TV 12. Viacom Digital 3. Tremor Video 13. SpotXchange Video Ad Market 4. BrightRoll Video Network 14. ESPN 5. Specific Media 15. TubeMogul Video Ad Platform 6. Videology 16. Adotube 7. AOL, Inc. 17. Google Sites (YouTube) 8. Undertone 18. Grab Media 9. Auditude, Inc. 19. Yahoo! Sites 10. Microsoft Sites 20. ABC Television Aggregation Traditional Media Digital Media* Ad views; December 2011 11

It costs $2-5MM for major media to produce a web series…most often with unclear pathway towards profitability Costs = $2MM Brand Building? Revenue = $0.4MM $300 $10 $96 Own Site Costs Revenues (Net)Source for Partner’s on-site data: comScore Video Metrix 12

Syndication companies partner with publishers & media companies to increase video views up to 20x over on-property volume Monthly Video Views 11.0 Total Views (MMs) 7.0 On Own Via On Own Via Site Syndication Site Syndication 0.5 0.4 Womens Lifestyle Focus News Focus 22x greater views 11x greater viewsSource for Partner’s on-site data: comScore Video Metrix 13

By lowering production costs and relying on third parties for audience, content producers can find profitability Costs = $2MM Costs = $1MM Revenue = $1MM $600 Syndication $300 $10 $96 Own Site Costs Revenues (Net)Source for Partner’s on-site data: comScore Video Metrix 15

3-4x higher payout today 16

But won’t mobile video save the day? “ M o b i l e v i d e o …( r e p r e s e n t s ) 13 % o f o u r d a ily v ie w s . ” - S u z ie R e id e r , h e a d o f A d S a le s , Yo u T u b e + G o o g le D is p la y 17

And social? 0 . 6 % o f v id e o s o n F a c e b o o k a r e m o n e t iz e d **comScore Video Metrix – February 2012 18

Only one major media company* grew their video views faster than the internet as a whole in 2011: AOL 2011 Growth in Monthly Video Views 8 Different Large Media Companies 103% 49% 38% 21% 22% 14% Major Media Major Media -11% Major Media Major Media Major Media Major Media Internet as a AOL #1 #2 #3 #4 #5 #6 whole -30%*Includes only those with at least 25MM monthly streams 20

So what did AOL do? Addressed high content Embraced offsite production costs distribution Acquired Acquired January 2010 October 2010 21

And keep an eye out for the newest player in the space has acquired 22

So what are the lessons to be learned• Lower your production costs – Not all content has to be broadcast quality• Embrace off-site distribution – Produce content that extends beyond your site – Seek technology platforms that enhance distribution beyond your site – Demand ad serving + reporting that integrate easily with third parties – Provide incentives + training for your sales teams 23

O n lin e V id e o M a r k e t : T h r e a t , O p p o r t u n it y , o r B o t h ? A p r i l 2 0 12Andrew TaylorVP of Business Developmentataylor@grab-media.com(773) 450-9461 24

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Online Video: Threat or Opportunity (2012 NAB Show)

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Online Video: Threat or Opportunity (2012 NAB Show) Presentation Transcript