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AOL On: Where Are Online Video's Breakout Series?

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AOL has invested heavily in original online video, and while its shows often generate basic cable viewing numbers, it hasn't yet had a breakout hit that leads to mainstream awareness. Years into the online video age, few shows have enjoyed mainstream awareness. In a red carpet interview at the recent Streaming Media East conference in New York City, Ran Harnevo, senior vice president of video for the AOL On network, talked about online video's breakout moment.

"The metaphor I'm hearing all the time is 'Mad Men.' When are you going to have your 'Mad Men' moment? And I think it's a process," Harnevo said. "First of all, I think 'House of Cards' was a blessing for the whole industry. Even though they're living on subscription and Netflix has a different business model, et cetera, I think it was kind of like the first declaration that digital is capable of -- and it was an expensive investment."

Given all the creators producing online video series, whether independent or with a network like AOL On, it's a given that mainstream success will come. But how long does the industry have to wait?

"The next question is 'When are we going to do it?' I think the whole industry is going there. I think it's a matter of time, because if you look at the amount of money that was invested in content in 2013 versus 2012, not the same ballgame, right? I think 2014 you're going to see the same kind of trend of us getting more into content, learning. I feel that every show we create takes us to that moment, because we learn," Harnevo said.

To hear more about the evolution of online video content, watch the full interview below.


Troy Dreier:  Hi. This is Troy Dreier, senior associate editor for StreamingMedia.com, coming to you from Streaming Media East 2013 in New York City. I'm joined on the red carpet today with one of the thought leaders of our industry, one of the bigwigs of the online video space. I'm very pleased to present Ran Harnevo of AOL and AOL's On network and formerly of 5min Media, which was your baby.

Ran Harnevo:  Yeah, 5min Media was our baby. It got acquired, and we thought that the 5min platform together with the assets that AOL had made it a new brand and positioning, so the AOL On network was launched actually in NewFront 2012, so we're one years old.

Troy Dreier:  So the AOL On network-- and that's On.aol.com-- that really felt like the hub that the whole AOL video experience needed that everything centers around.

Ran Harnevo:  Yeah, that's correct. I mean, we created massive scale for distribution almost from day one, but we got to a point where we had so much great content from so many consumers that AOL really needed one video destination that centralized the whole experience. We actually launched the AOL On network a year ago together with the video hub, and we have over 150 million video views on the destination only at this point, so we're growing both on the distribution side but also on the consumer side really rapidly.

Troy Dreier:  Very impressive. As we record this you just had your upfront for 2013 a couple weeks ago, and I was there, and it was a star-studded event. You guys always put on a great show. Why don't you tell me about some of the shows that were just announced that you personally are really excited about?

Ran Harnevo:  So we launched 15 shows, and we also launched a few data deals that we can talk about afterwards. One show is already on air, and that's "#CandidlyNicole," which is kind of a deep dive into Nicole Richie's Twitter feed. She has four million followers, which she takes through the journey on AOL. I'm a huge fan, because I think you're seeing a Nicole Richie you didn't meet before. She's funny. She's actually hilarious. She doesn't take herself too seriously. We have three episodes live less than two weeks, and we already have more than three and a half million views, which for me are cable numbers, right? So we have almost three million unique viewers to that experience. The show's just started. I'm a huge fan. We're going to have 15 shows until end of fall. A few things that I'm-- like my favorite-- Hank Azaria...

Troy Dreier:  That was the one that really I thought I've got to see. Tell people about that.

Ran Harnevo:  So Hank Azaria kind of never wanted to be a dad, and then at one point like all of us he decided that he would be, and he decided to take a camera and kind of document the whole thing, like really going to all of his friends, some of them are very well known, ask them about fatherhood. And then he also had-- and that's a spoiler, but his kid was born really early, and I think it's a very kind of like sensitive piece around fatherhood that both men and women would identify with. We're launching it end of summer. We have an amazing show, kind of like a docudrama around New York City Ballet that Sarah Jessica Parker is basically narrating and leading. It's her production company. She's on the board of New York City Ballet, and it's really the first look, like cameras going into a very conservative place, kids that have the peak of their career when they're less than 20 and the whole kind of like athleticism aesthetic kind of work and competition, which-- I'm really, really excited. We're going to launch that in October. A few things that I kind of really like from a personal standpoint-- Scott Schuman, who is an amazing photographer who basically goes and takes photos of like ballsy fashion statements that people bring to the street, is going to take us to kind of like his inspiration and how he thinks about stuff and how he gets them rolling. And we're doing kind of the same thing with Jonathan Adler on the design side. I don't know if you've seen his store in Soho, but he is a funky kind of like-- I think he has a lot of sense of humor in what he does. And overall, I mean, two things we kind of lay down with our slate and the whole kind of purpose of us approaching production is, A, authenticity. We think that that's really the biggest differentiation between television content, cable content and Web content. Like I always say, if you see a sitcom on TV and you hear the laughs you kind of buy the deal. If I give you the laughs online you're going to leave immediately. There's something in the medium that needs to be really authentic. And then another thing that we added to it is we want to work with digital native power, so it's not a coincidence that we work with Nicole Richie that has four million followers. A lot of people speak about promotion and how do you get people into the content and how do you develop audiences, and we work with iJustine, who has three and a half million followers on YouTube, and we work with Scott Schuman that has his own site and with people that really have a lot of digital audiences that they can bring to the journey with us. We're going to heavily promote it, they're going to heavily promote it, and we hope to really make some hits and create some franchises.

Troy Dreier:  And then you said there were some content deals that were announced that you wanted to talk about?

Ran Harnevo:  Data deals, yeah, because one of the major things that I think is missing in the online video space is shows are amazing, and more than 100 shows were announced during the newfront. We basically also thought and expressed it onstage that we need to plug TV measurement into online video, because at the end of the day you have a huge buying community that is buying TV, which is not growing, prices are going up, and I see a big, genuine will to move the money to our industry. And one of the major obstacles is measurement, so we announced I think two meaningful partnerships, the first one with Nielsen, that really we are going to get measured by Nielsen the same way we're going to get measured by ComScore, which means we're going to fire a pixel of every impression to Nielsen with OCR the way we do with ComScore, and Nielsen is going to acknowledge our reach on an apple-to-apple basis. So if you're a buyer you would be able to plan your buy with AOL against any other TV network.

Troy Dreier:  That's got to be huge for buyers.

Ran Harnevo:  Yeah, that's exactly why we did it. It's kind of like we can educate thousands of buyers across the country that digital measurement is better, or we can just plug our systems into their pipes and help them feel comfortable with what we do. So on top of Nielsen and kind of almost at the same time we announced a deal with Mediaocean and FreeWheel where all of our inventory is basically going to be available in Mediaocean's platform. And Mediaocean is-- $40 billion out of $65 billion in TV are being bought through this software, so almost every TV buyer in this country and every media buyer in this country uses Mediaocean. The fact that AOL inventory would show up in Mediaocean with a Nielsen measurement on top of it really turns us into a TV network, a cable network and starts to really bridge the gap between these two siloed industries, because it's not in our incentive to run a siloed industry. I think that content is getting there, pipes should get there, and at the end of the day it should all be one big ecosystem of premium content.

Troy Dreier:  I want to jump back to what you were saying about creating breakout hits, and you guys have launched a lot of shows that have done amazingly well, and you have other ones coming up that are certainly going to do millions, like you said, like cable numbers. But I think we're kind of missing shows that break out into the mainstream. It feels like for online properties you could still count on one hand the ones that really broke through to mainstream consciousness. And what is it going to take, and what is it going to take for AOL to have that kind of hit?

Ran Harnevo:  Yeah, so the metaphor I'm hearing all the time is "Mad Men." When are you going to have your "Mad Men" moment? And I think it's a process. First of all, I think "House of Cards" was a blessing for the whole industry. Even though they're living on subscription and Netflix has a different business model, etcetera, I think it was kind of like the first declaration that digital is capable of-- and it was an expensive investment. And then I agree with you. The next question is "When are we going to do it?" I think the whole industry is going there. I think it's a matter of time, because if you look at the amount of money that was invested in content in 2013 versus 2012, not the same ballgame, right? I think 2014 you're going to see the same kind of trend of us getting more into content, learning. I feel that every show we create takes us to that moment, because we learn. A lot of people expect us to do marketing the way TV is doing marketing. They want us to buy ads on bus stations and on buses and on TV, and I actually think that we don't want to replicate the same methodology. We need to find our way to get a lot of audiences, and we're going to get there. And I just remind everyone that Justin Bieber was not born on TV.

Troy Dreier:  Justin Bieber is kind of a good example, because I feel like the biggest things to come out of online video are things that came out of a single creator or a very small studio of people who are really passionate. It feels like we haven't seen enough hits from the big content producers like AOL. Are big content producers able to say what's going to be a hit online, or is it going to come from the small passionate people doing their own projects?

Ran Harnevo:  No, I think it's going to come from us collaborating with them.

Troy Dreier:  With them.

Ran Harnevo:  And I think it's going to come from people that really understand distribution and people that really cranked kind of like the digital code. But I also think there needs to be a level of I wouldn't even say patience, though. I think it's evolution. Cable didn't start with hits, right? ESPN didn't start with shooting the NFL. There is a process of aggregating audiences and aggregating knowledge and getting into the content business, and I can just finish with Reed Hastings, which is an amazing CEO. They asked him "Are you competing with HBO for Netflix?" And he said yes. And they asked him "Why are you so confident you can do it?" And he said "I think Netflix can become HBO way faster than HBO can become Netflix." And I thought it was a great way to put it, and I think the path that we have is clearer and more achievable than the other side. And the minute we're going to have an Apple TV and a Google TV and we're going to see huge disruption on the bundling side of cable, et cetera, I actually think that there's a much bigger opportunity for digital folks than there is for TV folks to maintain and grow like huge businesses to 2020, 2025, etcetera.

Troy Dreier:  With TV Everywhere I'm seeing the premium content owners lock-up their content online more than ever, and it feels like there's going to be less and less of that available for free viewing without authentication. So it seems like we're going to get to a place where we have two online video areas, one for people with authentication and one for people where they can enjoy premium-quality content without authentication. Do you see it evolving that way, and is that something that you can…?

Ran Harnevo:  First of all, it's a good assumption. I think first of all it's the biggest opportunity for digital. I mean, the fact that the cable content stays under bundling gives us the opportunity to really invest big-time, because I actually think that when Apple and Google and Samsung are going to launch their TVs-- and I always say that an iPad is the greatest lab for what's going to happen on TV. We have a huge opportunity there. If you look at Huff Post Live, which is AOL's biggest investment around news, I believe that if you're going to buy a TV and Huff Post Live is going to be an app on your home page you're going to see massive migration to this product, because it's an amazing product, and right now it's not bundled into any buy. So I would say, A, it's an opportunity. B, I think that appification is inevitable, and I don't think cable are going to get disrupted. It's not going to be like music, that in one day it's all gone, but I think you're going to see more and more appification versus bundling, right? And the more technologies would allow cable networks, TV to go directly to consumers and to get their fees from the consumers and not in a bundling way, you're going to see more and more content companies going directly to their consumers with an app instead of with a package of 100 apps, because right now cable is a package of 100 to 300 apps. John McCain has issues with it. We'll see. It's an interesting play. But the minute the UI of TV is changing and TV becomes more of an iPad from an experience perspective-- and I think it will-- then I think a lot of major companies will have to ask themselves "Are we going to keep being bundled and that's it, or can we go directly to the consumer?" Can HBO go directly to consumers and let them buy their app and make more money than being a part of a bundle? And I think that's going to be the real dramatic moment.

Troy Dreier:  That's the bold move. Everyone's wondering if it's going to happen, and you're saying you think it will.

Ran Harnevo:  Yeah, but we're waiting for hardware, right? Because the way I look at it, if you look at mobile before Android and iOS and Windows 8, the carriers had a lot of power. It was really hard to build something and scale, because you needed to have deals with everyone. Standardization wasn't there. That's where we are with connected TVs at this point. The minute everything gets simple and we're going to see two or three operating systems that are kind of like going across all the TV hardware that you're buying that's the best time in the universe to be an entrepreneur, because then I think we break the rules the way they are, and the opportunity there from a content perspective is just unbelievable.

Troy Dreier:  You want to give us a timeline?

Ran Harnevo:  I don't know. I hope it's 2014.

Troy Dreier:  That'd be great. Well, great talking to you as always, Ran. This is Troy Dreier coming to you from Streaming Media East from the red carpet. 

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