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  1. 1. W H I T E P AP E R 3 6 0 - D e g r e e Ap p r o a c h t o V i d e o : H o w B r a n d s C o n v e r g e O n l i n e , M o b i l e , a n d S o c i a l Au d i e n c e s t o B u i l d C o m m u n i t i e s w i t h K yt e ' s P l a t f o r m Sponsored by: Kyte Melissa Webster June 2010 I D C O P I N I O N As the audience has moved online, global brands and media and entertainment companies have followed, investing heavily in the online channel. That online channel, however, is fragmenting: In addition to creating compelling destination sites with engaging, original content, brand owners and media companies need to reach out to consumers who access the Internet using their mobile phones and to digital natives who spend their day on Facebook or another social networking site. In addition, the very nature of that online channel is changing. Gone are the days of the static one-way Web site: Today's Web is interactive, participatory, and visually rich, with plenty of video. It's about community, and building a two-way conversation, and that requires new types of video content: not just professionally shot and produced video but also "authentic" video captured in the field and user-generated content (UGC). The need to easily and quickly create and publish all kinds of video to all of today's online touch points for a 360-degree view of the consumer is driving spending on online video platforms (OVPs). IDC believes that large organizations, including global brands and media and entertainment companies, should look for an OVP that can: Publish video to the broad variety of mobile devices that consumers are using to connect to the Internet, via both the mobile Web and mobile applications Publish video to social networking sites, via widgets, to reach the audience where it is already engaged Manage the workflow for different types of content, whether professionally shot, authentic, or moderated UGC Provide a reliable, scalable, highly available service with comprehensive reporting and analysis capabilities and a full set of APIs that enable it to be integrated with other enterprise applications GlobalHeadquarters:5SpeenStreetFramingham,
  2. 2. 2 #223929 ©2010 IDC S I T U AT I O N O V E R V I E W As the world moves online, the Web is quickly becoming the primary channel for global brands and media and entertainment companies that want to engage consumers and build customer loyalty. By IDC estimates, 1.6 billion people worldwide are already using the Internet, and by 2013, a third of the world's population will be online — some 2.3 billion people — with the greatest growth in Asia and other emerging markets. Increasingly, the online experience is also a mobile experience: Most of this growth will come from mobile users accessing the Web from laptops and handheld devices. By 2013, there will be nearly 4.9 billion mobile subscribers worldwide, and a growing percentage of them will have smartphones capable of delivering a good Internet video experience. Media tablets such as the iPad will also see tremendous growth during this period. In fact, the number of Internet-connected devices will grow even faster than the online audience will: It will almost double, from an average of one device per Internet user today to 1.7 devices by 2013, as more people connect to the Internet via mobile devices, media tablets, and new consumer electronics products (e.g., connected TVs). The Web experience has also become a social experience. As IDC research shows, more than 60% of Internet users in the United States regularly access one or more public social networking sites, and IDC expects the number of Internet users creating blogs or participating in online communities will more than double between 2008 and 2012. The challenge for marketers is leveraging the power of the Web to reach that online, increasingly mobile, and increasingly social audience. Web sites have certainly evolved very quickly over the past few years from static, information-oriented pages to fully dynamic, interactive applications that transact or entertain, and the continued shift of the marketing budget to the online channel is reflected in the growth in spend on Web content management, Web analytics, search engine optimization, and other tools that help marketers optimize the effectiveness of the online experiences they create. Video is becoming a key component of these online experiences: Video is compelling and immediate, and marketers can tell a story more persuasively with video than with any other medium. As our Web site investment survey shows, nearly half of large companies (those with 1,000 or more employees) across a broad range of industries rate "making Web sites more interactive/engaging via video, audio, or rich Internet applications (RIAs)" an important priority. Certainly, the percentage is even higher among global brands and large media and entertainment companies. T h e R i s e o f O n l i n e V i d e o P l a t f o r m s The need to quickly deploy new online experiences using video in creative ways has given rise to a new solution category: online video platforms. Online video platforms address the myriad challenges inherent in publishing video and make it easy for Web site owners to add video to the online experience they are creating. OVPs host and manage Internet videos and provide transcoding services; typically, they include a customizable video player that Web site owners can use to easily embed video in their Web pages, and they provide a scalable, high-performance, and highly available infrastructure that ensures a good playback experience.
  3. 3. ©2010 IDC #223929 3 This very vibrant, competitive space is seeing tremendous innovation: Literally dozens of OVP providers in the marketplace today are addressing different market segments. At the low end are inexpensive, bare-bones solutions with simple video publishing tools for lower bit-rate video catering to smaller organizations; these OVPs typically make most of their revenue from the markup and resale of wholesale content delivery network (CDN) bandwidth. More advanced OVPs offer sophisticated publishing and syndication tools geared to global brands and media and entertainment companies; because most of these customers already have CDN relationships, bandwidth markup is a minimal component of their revenue model. O V P R E Q U I R E M E N T S F O R G L O B AL B R AN D S AN D M E D I A AN D E N T E R T AI N M E N T C O M P AN I E S High-quality content is core to the value proposition of global brands and media and entertainment companies — it's an important part of how they differentiate themselves. They need an OVP that enables them to publish high-quality video to the Web with a good playback experience. They also need the OVP to help them reach and engage the increasingly mobile as well as social audience through a compelling, customized experience. This requires a combination of rich, built-in functionality and platform extensibility. Let's look at these requirements in more detail. B r o a d R a n g e o f C o n t e n t T y p e s : A u t h e n t i c , U s e r G e n e r a t e d , P r o f e s s i o n a l l y S h o t First, the OVP needs to make it easy to create and publish all types of content, including high-quality, professionally shot and produced video; professionally shot "raw" video captured in the field, also known as "authentic" content; and user-generated, user- uploaded video. Typically, a brand Web site, campaign, or "show" will blend two or even all three of these content types to create an engaging experience. Although online video platforms all support professionally produced content, not all online video platforms support high-quality video. As desire grows for high-definition content, we can expect to see that change. Today, the ability to deliver high-quality video is closely tied to the online video platform's scalability, transcoding capabilities, and ability to support the ever-broadening range of viewing devices. We can think of authentic content as UGC created by professionals. Like UGC, it's casually shot — often using mobile phones or other portable devices — and minimally edited. It may be a TV personality or celebrity chronicling life, or a journalist capturing breaking news at the scene using an iPhone for near-real-time playback. Ease of upload and customizable workflows enable quick time to publish — ensuring that the content is fresh, persuasive, and distinctive. Ease of publishing is also important for UGC to contain production costs for the increased video inventory that UGC provides. Equally important is the ability to moderate that content to protect and support the company's brand. The OVP also needs to enable viewers to comment on and rate content to help foster the community around the content and generate buzz.
  4. 4. 4 #223929 ©2010 IDC Live and On-Demand Video Most online video platforms do a reasonably good job delivering short-form video clips on demand via progressive download. Not all of them, however, are suitable for longer- form content. This is changing as more OVPs add support for HTTP streaming, which provides many of the benefits of true streaming via adaptive bit-rate technology. Global brands and media and entertainment companies need an OVP that can deliver both short- and long-form high-quality video with an optimized playback experience. We believe that global brands and media and entertainment companies also need support for live streamed video. There are many use cases for live video — whether breaking news, sports events, concerts, or some other type of real-time content. Ideally, a single platform supports both uploaded and live content with a consistent user interface and feature set. T h e M o b i l e W e b a n d M o b i l e A p p l i c a t i o n s The OVP must provide out-of-the-box publishing for mobile, and it needs to support both the mobile Web and mobile applications. Whereas we continue to see a preference for applications among smartphone users (given their phones' smaller screens), viewers using media tablets (like the iPad) are more likely to engage via the open Web. Regardless, mobile use is growing and mobile devices are quickly becoming the primary way younger viewers connect to the Internet. The ability to create a branded, high-quality mobile experience is essential for global brands and media and entertainment companies. T h e S o c i a l W e b The explosion of social networking has profoundly changed the way we think about building online experiences. It's one thing to build a great destination site; it's quite another to take it viral, and the way to do that is through content syndication — taking the content to the audience where it is already engaged. Today's online video platforms need to provide robust capabilities for content syndication to Facebook and other popular social networking sites via widgets and other built-in features. A n a l y t i c s , R e p o r t i n g , M o n e t i z a t i o n In addition to publishing capabilities for the Web, mobile devices, and social networking sites, the OVP needs to provide integral analysis and reporting capabilities across all of these touch points. Marketers need insight into how their content is consumed across the Web, and they need actionable information to help them continuously improve the experience they deliver. E x t e n s i b i l i t y Finally, large organizations need an OVP that is easy to integrate with a broad variety of back-end systems so that they can manage rights, profile users and customize the user experience, tie in advertising platforms and ecommerce systems for monetization, and so forth.
  5. 5. ©2010 IDC #223929 5 C O N S I D E R I N G K Y T E Privately held Kyte ( is headquartered in San Francisco, California, with offices in New York, London, Hamburg, and Zurich, and has approximately 55 full-time employees. Kyte's customers include global brands and media and entertainment companies such as ABC, Armani Exchange, Clear Channel, ESPN, Fox News, HomeAway, MTV, Monster Energy, NATO, NBA Digital, Nokia, and Tyra Banks. Kyte was funded by Draper Fisher Jurvetson, Steamboat Ventures, and other venture funds, as well as the investment arms of several major wireless corporations. Kyte's cloud-based white label online video platform supports the publishing of all three kinds of content — professionally produced, authentic, and user generated — and provides delivery of both live and on-demand video. The company was founded in 2006 with the goal of providing online video platform services for the mobile and social Web: Kyte recognized early on the impact that increasing adoption of smartphones and social networking sites would have on the way online video is created and consumed, and we believe that Kyte is well-positioned to benefit from the explosive growth of both. Kyte Console is a graphical Web-based interface that lets users upload and manage media assets and playlists, create and manage channels and players, moderate user- generated content to ensure against inappropriate content, and access Kyte's extensive reporting and analytics on video production, distribution, users and consumption, and monetization. Kyte Player is an embeddable, skinnable, fully customizable player with built-in community features for social video sharing, commenting and content rating, multimedia chat, and so forth. Kyte's platform has particularly strong support for mobile video: Its innovative Mobile App Frameworks make it easy and quick to develop mobile video applications for iPhone, BlackBerry, Android, and Nokia. Kyte has equally strong support for the social Web: In addition to its player's features for social video sharing and multimedia chat, Kyte offers application frameworks that speed development of widgets that embed Kyte video on social networking sites. Kyte provides extensibility at two levels. Kyte application frameworks are turnkey solutions that let developers quickly deliver native applications based on a fully customizable set of prebuilt functional modules core to the Kyte platform, including video playback, video creation for UGC campaigns, real-time social interactivity, location-aware events, Twitter and RSS readers, and more. Kyte SDKs give developers a comprehensive set of APIs that enable them to incorporate Kyte-powered video and interactivity into existing applications, and they facilitate integration of third-party solutions for ad management, analytics, ecommerce, rights management, and single sign-on, among others. As a cloud-based (SaaS) solution, Kyte is quick and cost-effective to deploy and is engineered for Web- scale performance and availability (see Figure 1).
  6. 6. 6 #223929 ©2010 IDC F I G U R E 1 K y t e ' s O n l i n e V i d e o P l a t f o r m Source: Kyte, 2010 Kyte is committed to evolving video standards such as HTML5: If you use Kyte, your video will play on iPhones and iPads. Kyte is also committed to the three-screen experience: It already supports "connected TV" devices from Boxee, with Roku in the works and Google TV planned. As video publishers think about how to get their content onto these new devices, Kyte intends to be the facilitator, whether via an optimized Web video experience or platform-specific application.
  7. 7. ©2010 IDC #223929 7 C AS E S T U D I E S : K Y T E I N AC T I O N We spoke with two Kyte customers to learn firsthand how they are leveraging Kyte's online video platform to help them create and publish diverse kinds of content and deliver an engaging experience across the Web — including the mobile and social Web. M T V N e t w o r k s Viacom's MTV Networks runs cable networks — including the MTV channels (MTV, MTV2, VH1), Comedy Central, Nickelodeon, and others — that reach over 640 million households in more than 160 countries. On air, MTV Networks is the number 1 rated full-day ad-supported cable network for people aged 12–34. averages 25 million unique viewers per month and is seeing double-digit growth in visitors — and strong growth in video streams as well. We spoke with MTV executives responsible for Internet video in New York and Berlin about their use of Kyte's platform to deliver video streams for a variety of innovative and successful online shows. Of course, as a top-tier media company, MTV Networks has made significant investments in its own Internet video delivery capabilities, including its own branded Internet video player, which is heavily customized to meet MTV's specific needs around content protection, ad sales, and financial management. The expectation is that MTV's online programming teams will utilize the internally developed platform whenever possible. Kyte, however, offers MTV Networks some unique capabilities that help it deliver on its promise of being a "dynamic, vibrant experiment at the intersection of music, creativity, and youth culture … that entertains, informs, and unites." Kyte's platform is quick to deploy, and its modular design also allows MTV to take advantage of selected Kyte services as appropriate. MTV in the United States has used Kyte in a number of interesting projects to enable sharing across the social Web and to deliver video to mobile devices — especially the iPhone. Most recently, MTV tapped Kyte to develop its Hope for Haiti Now iPhone/iPod Touch application. Hope for Haiti Now was a two-hour global telethon to support relief work in Haiti in the aftermath of the devastating earthquake that hit Haiti in January 2010. The benefit — by all accounts, the most watched telethon in history — was organized very quickly: The global broadcast took place just 10 days after the quake hit, and speed of deployment was critical. Thanks to Kyte's Mobile App Framework, the application — which let mobile viewers watch live and make donations in real time — was written in less than a day and certified for the iTunes App Store just in time for the telethon. According to Michael Scogin, vice president of wireless for MTV, "We're doing a ton of iPhone apps, and Kyte gives us a low-cost, quick-to-market solution for these projects." MTV US also used Kyte for It's On with Alexa Chung, a live, interactive "variety show" hosted by model-turned-TV-personality Alexa Chung in 2009. It's On was designed as a sort of mashup of TV and the Web and made extensive use of Facebook and Twitter to reach out to younger audiences who have drifted away from TV. The show used the Kyte player to deliver both professionally shot and authentic content to its Web site, and Kyte's Get & Share functionality enabled viewers to share the show's content via the social Web.
  8. 8. 8 #223929 ©2010 IDC In addition, MTV US used Kyte for the 2009 MTV Movie Awards to create an engaging iPhone application that delivered iPhone-optimized video of the awards, reaching out to mobile viewers via notifications, Twitter, and RSS blog feeds. Recently, MTV US released a version of its MTV News iPhone application that uses Kyte's transcoding services to produce all its iPhone content — including a dedicated section of videos for the 2010 MTV Movie Awards. MTV Germany has been using Kyte for about two years. Its first production using Kyte was Joko's Roadtrip. Joko, a popular MTV VJ in Germany, set out from Berlin at the beginning of June 2008 with a car, a phone (Sony Ericsson was the show's sponsor), and a little pocket money to attend the European football championship in Vienna at the end of that month. According to Jürgen Hopfgartner, senior vice president for digital media at MTV, "Joko only had about $50 in his pocket, so he needed to enlist the help of MTV viewers — it was a great opportunity for direct engagement." Fans made him offers of help — lodging, a meal, gas for his car, or something more entertaining — by uploading a video or multimedia "pitch" (UGC) using Kyte. The audience picked its favorite pitches (winners received prizes) and thus had a hand in determining the course of Joko's trip. About 10,000 people helped Joko on his quest in one way or another. Joko chronicled his adventures from the road, uploading a couple of short, authentic videos from his cell phone each day. A longer, higher-quality video summary was also posted to the Web site at the end of each day, and snippets from those summaries were also put on the air — a great example of "Web-first" content creation. As Hopfgartner observes, "Moving into 2010, and into 2011, it's time to break down the barriers between the digital media world and television." MTV Germany has since used Kyte in several additional projects. For example, MTV Germany used Kyte to deliver both professionally shot and authentic content for one of its new hit shows, Das Haus Anubis — a mystery soap on Nickelodeon Germany targeted at young teens. The Web site lets fans watch back episodes, or view the trailer for the following day's show, and post comments, and it has been very successful — with 50–100,000 show views per day. MTV Germany has also used Kyte for, a television series on the VIVA channel. The show is moderated by Nadine Vasta, one of MTV Germany's VJs, and Vasta used Kyte to capture and upload video from her mobile phone to document her urban, Web 2.0-ish lifestyle — continuously updating her blog and Facebook page. Collectively, these projects highlight Kyte's ability to publish all types of content — whether highly produced, professional content, authentic content, or UGC — to the mobile and social Web. P u b l i c i s Publicis Group is one of the world's largest advertising and media services companies. Headquartered in Paris, France, Publicis serves customers in more than 100 countries on five continents. The company had $6.6 billion in revenue in 2009 and employs approximately 45,000 people. Publicis in the West, founded in 2001, is part of Publicis USA (www.publicis-, the North American regional operating unit of Publicis Worldwide, which in
  9. 9. ©2010 IDC #223929 9 turn is the largest global advertising network within Publicis Groupe. Its Seattle team has created award-winning comprehensive campaigns for clients such T-Mobile, Citi, HP, UNICEF, Coinstar, RealNetworks, and the Washington State Lottery. Publicis' tagline is "creating contagious ideas that ignite and change conversations," and its campaign for this past spring is a great example of doing just that. wanted a campaign that would not only build brand awareness but also really get a conversation going, and Publicis came up with a creative and playful approach to telling the story about the limitations of the hotel market and the advantages of the home rental market. It created a series of entertaining Webisodes starring Chevy Chase that chronicled the hotel misadventures of the Griswolds and advertised the "movie" Hotel Hell Vacation via a Super Bowl TV spot. Publicis and knew they needed a Web-scale solution, but they didn't want just another static YouTube experience: It wasn't about sending viewers off to YouTube to watch video; they wanted a destination that would let them really engage users — with high-quality content, a moderated UGC component, and social sharing. Kyte enabled them to customize the experience, skinning the player and adding surrounding content, and provided the UGC capability. Users shared their stories of hotel horrors in words, images, and video in exchange for a chance to win a $10,000 vacation rental, and they could comment on, rate, and share the Webisodes on Facebook and Twitter using Kyte's integrated social and interactive capabilities. Publicis and keenly wanted to make the social-sharing aspect of their campaign come alive — they thought that it would be key to the campaign's success, and it was.'s Super Bowl TV spot was the second most trafficked Super Bowl ad in history, as measured by Web page views on the microsite — with 4.4 million page views and 1.4 million video views in the first 24 hours after the TV spot ran — and more than a third of that traffic came from social sites. Reflecting on the value of using a platform such as Kyte's, Trace Cohen, vice president of digital strategy at Publicis, says that "you need to reach the audience where they are — the audience is out there, consuming media on Facebook or on mobile devices. With Kyte, you get both the distribution and the destination." Cohen says Publicis is looking forward to using Kyte for new projects and putting Kyte's mobile capabilities to use. Among the lessons learned, Cohen notes, "One of the key facets of the success of the program was tapping into the appetite for longer-form content." While conventional wisdom might have dictated shorter, three-minute vignettes, Cohen says that Publicis' creative director "pushed hard for intelligently written 15- to 20-minute [funny!] Webisodes instead." Not only did the campaign prove an unmet need for longer-form Web video, but the Super Bowl spot itself was really a trailer cut from a Webisode — another example of creating content first for the Web, then repurposing it for TV. According to Cohen, "It was really a new way of doing things: Typically, the TV advertising team leads, and then the digital team is asked to support. This was the other way around." Considering that the lion's share of the budget today still goes to those TV spots, that's not a surprise, but Cohen is quick to point out the value of the "incremental" spend on the digital media side: "It really makes no sense to do it without the digital piece!"
  10. 10. 10 #223929 ©2010 IDC C H AL L E N G E S AN D O P P O R T U N I T I E S As a venture-backed start-up, Kyte has all the usual challenges that small companies face in new markets. As noted previously, the OVP space is very crowded and competitive: We've counted more than 80 OVP providers, although from a feature/function perspective, Kyte competes with only a subset. Nevertheless, it can be difficult to assess the strengths and weaknesses of a long list of competitors, and intense competition tends to drive down prices in any market. This means it will continue to be important for Kyte to innovate so that it can strongly differentiate its service from those of its competitors. Kyte has succeeded in opening doors through direct sales outreach as it works to establish its customer base among global brands and media and entertainment companies, and it will need to execute well on the marketing front to get its message heard and ensure that it is included on evaluation lists for new opportunities. We believe that the OVP market will undergo considerable consolidation over the next few years: We're already starting to see acquisition activity. Kyte will want to be well- positioned to take share as this trend gathers momentum. Second-tier media companies and global brands are already adopting OVPs in lieu of investing in custom-built solutions. In large media companies, however, the biggest competitive threat for OVPs in the short term is in-house developed video platforms. The large media and entertainment companies — particularly broadcasters and cable and satellite networks — have already made huge investments in their video delivery infrastructure and staff, and these investments are not yet fully depreciated. Further, these are often elaborately customized systems with deep integration into other proprietary systems. Wholesale replacement of an in-house Internet video delivery platform with a SaaS service may not be an immediate option for some of the large media and entertainment companies that Kyte is targeting, although Kyte reports that it is seeing more RFPs from major media companies looking to accomplish just that. Over the next few years, as both OVPs and cloud computing mature, we will also see opportunity for in-house platform replacement at big media companies. In the meantime, Kyte is finding plenty of opportunity today within these companies for exciting projects. Thanks to its frameworks and SDKs, and its modular architecture, Kyte can be used to extend the in-house platform. Further, new initiatives that require new functionality can place a big strain on those in-house systems: Often, the choice is a lengthy in-house IT project versus a quick and cost-effective Kyte deployment. In an industry where time to market is all-important, it can be easy to justify the decision to use Kyte. We believe that over the next decade, OVP functionality may become a pervasive set of rich video authoring and publishing services that are incorporated into larger and more comprehensive platforms for managing the online experience in all of its flavors rather than a separate offering. If so, Kyte will want to make sure it puts the right partnerships in place to ensure its long-term future and a successful exit if and when this comes to pass.
  11. 11. ©2010 IDC #223929 11 C O N C L U S I O N S AN D R E C O M M E N D AT I O N S As the audience continues to move online, and as demand for video — both live and on demand — grows, the need for an online video platform will become only more acute for any company seeking to engage its customers over the Internet. Large organizations such as global brands and media and entertainment companies require a professional-caliber OVP that can help them create, manage, publish, distribute, and monetize video content of all kinds — whether professionally produced, authentic, or user generated — across all of the touch points for their audience, including the mobile and social Web. We recommend that these companies evaluate their current strategy for publishing video and ask themselves the following questions: Do current systems for publishing video enable the company to quickly launch new campaigns or programming for iPhones, Android phones, or other popular mobile devices? What about the iPad? Do its current systems provide community-building features that encourage viewers to interact and share? Is it easy to launch new online promotions or experiences that leverage authentic or user-generated content? What about moderated UGC? How easy is it to customize its current player for new initiatives? Do its current systems provide comprehensive reporting and analytics that give the company a 360-degree view of its users and how its content is being consumed? Is the organization currently relying on a host of disparate, siloed solutions that require separate skill sets (and personnel) to use and maintain? If the answer to any of these questions is yes, it's time to investigate how an online video platform such as Kyte's can help to accelerate time to market and time to revenue. We are still in the early days of the digital media revolution: Now is the time to seek the help of innovators that can anticipate emerging needs and be ready with functionality and/or provide extensibility to address them. C o p y r i g h t N o t i c e External Publication of IDC Information and Data — Any IDC information that is to be used in advertising, press releases, or promotional materials requires prior written approval from the appropriate IDC Vice President or Country Manager. A draft of the proposed document should accompany any such request. IDC reserves the right to deny approval of external usage for any reason. Copyright 2010 IDC. Reproduction without written permission is completely forbidden.