AOL's Triple-Pronged Approach to Online Video
Few tech companies have had the roller-coaster ride of AOL. Once known as America Online, it was the biggest thing going on the internet. It was the training wheels that helped many people first discover the online world, and people still joke about how it flooded the market with software CDs.
AOL's long decline started shortly after it merged with Time Warner in 2000. Its stock slid from $226 billion in 2001 to around $20 billion 5 years later. People simply didn't need training wheels anymore.
The company left Time Warner in December 2009, then purchased The Huffington Post for $315 million in February 2011. That was just one of the smart moves AOL made as it began its reinvention. Another was betting heavily on online video.
Today, video is central to AOL. More than any other company, it's poised to take off dramatically as IP-based video grows in importance to home viewers and the line between broadcast and online content blurs. The secret to AOL's success isn't in one bold online move, but in three: branded entertainment, HuffPost Live, and AOL On.
While product placement has been a rising, if touchy, subject in broadcast television, branded entertainment has been a part of online video from the start. The brand may sign on as an exclusive sponsor and wrap ads around a program, or it might want its products used in the show in some way. Branded entertainment is fueling much of the growth in premium online video. In April and May of 2012, New York City hosted the first newfront season, in which major properties such as Google, Yahoo!, AOL, and Digitas displayed upcoming shows to brand managers and looked for sponsorships.
AOL is already taking a lead in branded entertainment, both with original video created by its in-house teams in New York City and Los Angeles and with videos created by partners around the world. Karen Cahn, AOL's general manager for branded entertainment, says that at any given time AOL has between 40 and 50 original shows in the works, thanks to brand support. It pushes out hundreds of new videos each day.
"We're always thinking of ways to further engage big brands that want to get their messages out in a very kind of organic way to consumers," says Cahn. "I think there's a lot of banner-blindness out there and we're always thinking of ways to get brands out there and in the experience."
While many viewers are just now discovering online shows, AOL is already partnering with major Hollywood names, such as Mark Burnett, Heidi Klum, and Jennifer Lopez. Cahn has found that a mix of information and celebrity sizzle works best in online programming.
"[With] everything we do and most things we produce we have an eye toward getting people to learn something. Whether it's how-to videos or news and information or what-have-you, it's kind of why people are coming to our platform: to get information, to get their news, to get a little bit that they can take with them, and that's entertaining all the while," says Cahn.
Advertising's role in branded entertainment can be tricky. Viewers understand that premium shows need sponsors, but they don't want to feel they're watching long-form commercials. Integrating brand messages with content in a way that doesn't feel forced is a big part of Cahn's job.
"It's a very fine line between what consumers will not only tolerate, but enjoy and benefit from, to what they'll shy away from and drop off," notes Cahn. "That's our job in this group, to straddle the line between the producers and the original content and the brands, sort of marry the two together to make sure the end product is really something that's useful for users and great for brands. It all works hand-in-hand. If one thing isn't good, then the other isn't going to work, so if we're too heavy-handed in our creative, the users are going to hate it and the brand is not going to be happy, so it all works together."
Producing interesting content is one thing; finding an audience for it is another. Until recently, AOL didn't have a video hub (more on that later). Instead, it uses the reach of the combined AOL and Huffington Post web properties to put content in front of interested viewers. It's a strategy that Cahn finds far more effective.
"Nobody believes in a microsite anymore," Cahn says. "The whole thing behind the Huffington Post CMS is that it's inherently social. We will publish a piece of content, and, depending on where users are, we'll program it all over the Huffington Post wherever it's relevant."
That means, for example, that AOL's new series Digital Justice, where digital forensic investigators solve crimes, is shown on the AOL On Tech and HuffPost Crime pages. The Celebrity Daily, a successful celeb news show, appears on HuffPost Entertainment, HuffPost Celebrity, and AOL Video.
"It's hard to say which area a video's going to take off in, so we don't want to pigeonhole," says Cahn. "We're dabbling in a bunch of different things. We're dabbling in-we know people come to AOL for news, information, how-to, short bits of entertainment news. We're also dabbling in scripted series. Now, at this point, people are not really coming to AOL or Huffington Post to watch a 20- or 30-minute piece of content. They're going to Hulu for that. That's not to say they wouldn't. We are definitely testing what it means to have a piece of content on a hub, program it regularly, and try to habituate people to come back to that page. My personal opinion is that's really hard to do on the internet no matter what, unless you're literally a Hulu which is known for having the same stuff you're getting on TV, you're going to get on Hulu and here's where you come to watch it."
It's a plan that's worked well so far. Rather that becoming known for video, such as YouTube, AOL and The Huffington Post are know for topic pages, which always include video. That gives visitors more variety.
"Our strategy is enabling brands to tell their story through video, distribute them, and get people talking," says Cahn. "When brands come to work with us, it's, ‘Okay, what are you trying to say? What is your story? What are you trying to teach? What are you trying to say about your product? How are you going to differentiate? What is your story and how can we use content to enable brands to tell their story in a very organic way?' That's what we focus on maniacally every day."
The answer to why AOL has been successful so far, and why it just announced an impressive roster of upcoming shows at its newfront event- such as a fashion program with Nina Garcia and Next Door Hero, about Americans with amazing stories-is that it has the reach and the resources that others lack, plus the vision to see where online video is going.
"It's kind of the perfect storm of things to make a strategy successful: we've got the users, we've got the engagement, we've got people who want to watch video, and we actually have the ability to make great video," notes Cahn.
Many sites are active in branded media. With HuffPost Live, however, AOL is doing something completely new. Announced in February 2012 and launching in early summer, HuffPost Live is a live, cable-like network where viewers can drop by whenever they like for a discussion of the topics of the day. The network will launch with 12 hours of live content 5 days a week, with that same content repeating overnight. It will air highlights on weekends. The daily figure will grow to 16 hours in 2013. At some point, the plan is to stream original content 24/7.
It's the combined resources of AOL and The Huffington Post that make this new venture a possibility, says Roy Sekoff, founding editor of The Huffington Post and president of HuffPost Live.
"If this idea had come to me in January of 2011, pre-merger, I probably would have sat up in bed and gone, ‘Oh my god,' and then gone right back to sleep because we wouldn't have been able to do it. But instead, I sat up in bed and went, ‘Oh my god,' and then I thought, ‘You know what? Maybe we could really do this,'" says Sekoff.
HuffPost Live won't create content on its own. Instead, it will leverage the high volume of video and text that AOL and The Huffington Post are already creating as starting points. On-air hosts will discuss major topics, then pull in authors, video creators, bloggers, reporters, and outside experts through webcam video. Viewers themselves will also play a large role in discussions.
"The whole premise is that we put up 1,000 pieces of content a day, between our original reporting, our blogging-our bloggers put up over 375 blogs per day-and some of the content that we aggregate and link out to. Every day, our content is being used as the starting point for conversations on MSNBC, Fox, CNN, many many places, and we'll continue to have that happen. But, we figured, why don't we use that as our real-time script?" asks Sekoff.
HuffPost Live will differ from cable networks in key ways. For one, it won't have shows. Instead, viewers will find a constant stream of discussion presided over by an assortment of on-air hosts. The studio will have multiple sets, rather than one central desk. The decision to not have specific shows or to discuss set topics at set times is Sekoff's; it reflects how he thinks people engage with information on the web. People don't schedule time online, he says. Rather, the net is "controlled chaos," and people surprise themselves with what they click on.
"I think it's never been done in this way, so we're going to try to be as iterative as possible. If things work, we'll do more of them, and if things don't work, we won't. If there's suddenly a clamoring from far and wide that ‘we need to know at one o'clock this is going to happen,' we'll consider it, but I don't think that's the way people engage with the web," notes Sekoff.
Rather than follow a schedule, HuffPost Live will offer free-roaming conversations. Topics and discussions will go on as long as they're interesting, not according to any preset format. While it might not happen, Sekoff imagines a way that viewers can control the flow of topics.
"I kind of have a fantasy that we'll have either a hash tag or something you can click on the page that says, ‘I'm bored,' and if enough people click on it, then we'll say, ‘Ah, time to move on,'" Sekoff adds.
By drawing on the variety of topics available on AOL and The Huffington Post, Sekoff says HuffPost Live will avoid the typical cable news network strategy of talking about one hot topic exhaustively, long after all the information has been shared.
"I don't think we'll do the regurgative, never-ending, oh-my-god we're on one story, that's all we're going to do, we're all-Casey Anthony all the time. If you look at the Huff Post alone, we have, I think, 66 verticals. So there's all these other things we could talk about," says Sekoff.
The variety of viewer involvement will also differentiate HuffPost Live from cable channels. People expect a more involved role online, according to Sekoff.
"People don't want to be talked at anymore. They don't want somebody sitting up on high telling them, ‘Here's what you need to know' -- no offense to Mr. Cronkite -- ‘And that's the way it is. End of story, good night now.' People want to be talked with, and ... what we're trying to do is bring them into the conversation in a central way," Sekoff explains. That means not just reading comments off Twitter, but bringing viewers in through video and giving them a voice.
Just as HuffPost Live takes from the rest of the network for stories and inspiration, so it will feed those channels with video-on-demand content culled from the live stream. As HuffPost Live finds an audience, Sekoff thinks that most people will find its content through VOD shares. His team might take the best minute of an interview, for example, turn it into a clip, and promote it on the appropriate AOL and Huffington Post pages. Eventually, he believes, viewers will get used to the streaming network.
As this is uncharted territory, Sekoff has no idea what kind of reaction to expect. Will viewing spike during parts of the day, he wonders, or will people leave the stream on all day, as with radio? Whatever the case, he'll be watching and making adjustments at the network begins.
If this were a cable network, viewership alone would determine whether or not it's a success. For Sekoff, however, the ratings won't be that important, at least not in the beginning.
"My metric isn't going to be numbers," Sekoff says. "If we're creating buzz, if people are talking about it, then that's a success for me. That's what success looks like."
While AOL has an effective distribution system for its online videos, thanks to a large network of verticals through AOL.com and The Huffington Post, it still needed a central hub to house all that original content. That's why it launched AOL On in April 2012. The hub's launch was organized by Ran Harnevo, senior vice president of video at AOL and CEO of 5Min Media, which was acquired by AOL in 2010.
At launch, AOL On offered 14 channels arranged by topic, such as News, Entertainment, and Style. Eventually that number will grow. A humor channel is already in the works, Harnevo says.
The hub offers AOL original and licensed programming, but no user-generated content. For Harnevo, AOL On is more than a central content hub. It's about creating a brand that viewers can rely on as the prominence of online video grows. If HuffPost Live eschews the traditional television model, AOL On embraces it.
"We really think consumers want content to be programmed, and they want content to be curated, and they want to watch it on every screen and on every site," says Harnevo. "It's all about curation, programming, experiences- bringing back some good old TV flavor to the Web. Then, when you talk about AOL and entertainment, you have the entertainment channel on the video hub, but you also have the entertainment channel being syndicated to all of our properties."
While Cahn understands the value of having a central hub, she believes that verticals are the more effective way to reach viewers.
"At the end of the day, we still need a place for people to go if they just want to tool around and watch videos. Some people get bored at work and they literally just-you know, you've done it-you go to YouTube and you start tooling around, and there's eight jillion videos and you don't know where to go. You need a starting point. AOL definitely needs a great starting point and a great beautiful home and an HD experience to have all of our videos, and I think that's really, really valuable. It's also better for brands, and I think the better the viewing experience the more people will come there and waste more of their time watching videos," Cahn says with a laugh. "That's kind of the idea. But, in general our thinking is create content and syndicate it out to where consumers are and don't force them into a microsite."
With its original shows, streaming network, video hub, and broad reach, AOL is positioned to ride the video wave. If its team keeps making bold and smart decisions, AOL's roller-coaster ride will keep climbing for quite a while.
[This article appears in the August/September issue of Streaming Media magazine, which will reach subscribers' mailboxes and go online as a full digital issue soon.]
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