How Yahoo! Can Become the Global Leader in Episodic Video

/ Jun 20, 2013

yahoo-home

(Here’s an example of how Yahoo! could distribute episodic content with an emphasis on subscription loops.)

Yahoo! has all the pieces to dominate episodic video distribution.

For non-obvious reasons, I’ve been bullish on Yahoo! for a long time. They’ve always been more experimental in video than most people give them credit for (Bill Maher headlined Yahoo!’s Comedy Channel) — and they’ve proven that they can successfully distribute episodic content far and wide (“Burning Love”). Coupled with one of the best branded sales teams in the business, they have all the ingredients to create something special within a monstrous market (the global TV advertising market is projected to hit $214 billion in 2017).

But that’s not what excites me most about Yahoo!’s opportunity in video.

What really gets me going is Yahoo!’s triad of targeting technology, raw scale, and Homepage user experience (I love the new direction they’ve gone with the endless scroll). I’ll get into each of these elements later after I explain where the money is.

Why is episodic content so valuable? Brand advertisers and agencies covet predictable, scalable, and highly-engaged audiences. That’s beyond elusive in today’s world of smartphones, tablets, a DVR-first mentality and decaying cable/broadcast franchises.

This abundance of choice is fracturing attention — fraying once tightly wound audiences — into millions of pieces. It’s a VOD world now. Furthermore, appointment viewing is largely dead outside of sports and event driven content.

Because of the aforementioned factors, large audiences are worth far more per viewer to advertisers than ever. When there’s a bona fide hit like “Two and a Half Men” (CBS is on fire as of late) or “Mad Men,” advertisers are forced to pay a hefty premium.

I can’t underscore enough that episodic content was once solely about appointment viewing. Not anymore. We’re now seeing radical new formats like SVOD (binge-viewing on Netflix), crowd-driven piloting (Amazon), and app-based viewing (HBO Go). The great unbundling is upon us.

To put it simply from a business perspective — episodic content is an excellent vehicle for bringing home the message of brand advertisers; thus, it’s still one of the most valuable contexts in media.

So how does Yahoo! fit into this world?

First, Yahoo!’s principal and most important asset is its targeting technology. In fact, it’s some of the best on the consumer Internet. The Yahoo! homepage alone can match hundreds of millions of consumers with relevant content in real-time. Many of these matches come with an email too.

No MSO has this capability. And outside of Google and Facebook, I can’t think of a company that has a richer corpus of demographic and psychographic information on their users.

Second, Yahoo! has massive scale. And episodic series need to find an audience. Remember Seinfeld? Jerry’s masterpiece was famously about to be canceled if not for “The Contest” episode. The lesson here is people need to grow into shows. This process takes time, marketing dollars and a scale platform.

Third, Yahoo! is in a unique position to invest deeply in developing premium episodic content. They can acquire outright, co-produce, and — inexpensively at first — internally develop their own shows and debut them on Yahoo! Screen as a starting point (which they’ve already started to do). I’d also advocate building a myriad of self-serve tools so creators can directly enter their funnel without a formal business relationship. Never underestimate what might walk in through the back door.

Once Yahoo! has this content, they can use their targeting system to distribute shows that show early promise to even larger audiences. And here, the bar for a “successful” series isn’t that high — if they can get roughly 100K dedicated fans of a series (or more), they can serve it up to the Homepage. One might frame this as ongoing piloting. Given the right influx of content, new shows could be debuted on a monthly (weekly?) basis. Consider this an evergreen stream of content with the winners getting super distribution.

Make no mistake, Yahoo!’s Homepage is still the Grand Central Terminal of the Internet. It’s the starting point for the non-millenial demographic and they implicitly trust the brand. These are the people who grew up with episodic content like “Cops,” “Friends,” and “Home Improvement.” It’s time to get them hooked into on new generation of programming.

Yahoo! has already succeeded in taking the first steps to prove this model out. Ever heard of “Burning Love” starring Michael Ian Black? Created by Paramount’s Insurge Pictures (a cutting-edge division within the studio that’s not bound by the traditional playbook) and Red Hour, Yahoo! distributed and marketed the show to millions of people. At the STREAM conference I attended last month, Erin McPherson (Head of Video Programming and Originals at Yahoo!) mentioned “Burning Love” was viewed by over nine million people! The show as later picked up by E!, proving that premium content can start on the Internet.

Not bad.

So how does Yahoo! take a true leadership position and cohesively unify their assets? Here are six steps:

  1. Open the floodgates for small series with a creator-friendly, self-serve platform for Yahoo! Screen. Provide audience analytics, brand advertising matching, and social promotional tools. Hire a small, experienced acquisition team that can identify great talent and series early in the process. (If they don’t already have this; I have no idea how they are staffed internally.)
  2. Push viewers to “subscribe” to shows they like, receiving push notifications and emails leading up an an episode’s release (I’ve already seen some of these tools but it needs to be strongly unified). “Subscribe” should trigger a notification in the new scrollable Homepage feed, an email notification, and a push notification or text message on a mobile device. Start building habits.
  3. Deeply integrate into the graph (it’s cheap distribution). Build on Yahoo!’s success with their Social Toolbar and Facebook OpenGraph implementation to ensure that their shows are being broadcast out to the social Web. Integrate with Twitter Cards where people can watch a show by providing their email address.
  4. Leverage the IntoNow and OnTheAir acquisitions. Cross-promote their original shows to cable and broadcast TV viewers and get them talking about this new content.
  5. Invest heavily in content and take a long-term perspective. I can only imagine Mickie Rosen (a former colleague of mine at FOX Interactive Media) has a tough job balancing who gets screen real estate on the ultra-valuable Homepage. Even if some shows get less immediate views, building an audience over time will prove to be valuable. Traditional networks have taken losses for years on episodic shows until — after enough audience aggregation — they turn profitable. As we all know, video discovery on the Internet is broken, but with great targeting technology and interesting content the experience can certainly improve.
  6. Make mobile and OTT viewing seamless. Invest yet again on an application level (not a hardware, there’s already too many endpoints) and put Yahoo!’s content everywhere. Hulu already did a magnificent job of this — follow their lead. Recently, it seems, Yahoo! has started to address this issue — they’ve unified their video players and fixed some of the internal fragmentation that would have been a huge barrier to this.

Yahoo! has a chance to become a major player in the future of entertainment. It’s going to take focus, bold action, and an understanding of how to take risks within the content community. I am really excited to see where Marissa goes in video.

BrianNorgardSpecial thanks to Scott Hurff on the creation of the graphics and editing help. You should check out his book on product development. It’s going to be excellent.

Brian Norgard is the founder of Chill. Follow him on Twitter @BrianNorgard or on his personal blog at www.briannorgard.com. This post originally appeared on his personal blog and has been reprinted here with his permission.

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