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Amazon Web Services, YouTube Kick Off Streaming Media West 2008

Keynotes from two of the biggest names online—Amazon and YouTube—kicked off Streaming Media West in San Jose, Calif., this morning. The show runs through Thursday at the McInery Convention Center in downtown San Jose.

Amazon: "Ahead in the Cloud"
Amazon is still best-known to the general public as an ecommerce site, but according to one of its execs, that’s not really what the company is all about. "Amazon is a technology company that just happens to do retail," said Werner Vogels, CTO of Amazon Web Services in his Streaming Media West keynote "Ahead in the Cloud: The Power of Infrastructure as a Service." Vogels traced the development of the Web Services offerings, including the pay-as-you-go content delivery service the company introduced last week.

He opened with a video montage from Animoto, a startup company that uses algorithms to match music to images. "Why are they so unique? Animoto owns no servers," Vogels said. Amazon Web Services provides all the processing power for Animoto’s upload, analysis, rendering, distribution. "This whole pipeline, no matter how many customers, should have a fixed SLA. If you upload images, within 4-5 minutes, your video should be delivered to you." Vogels also showed examples of other Amazon Web Services customers including Vimeo, RenderRocket, Mogulus, and the Indianapolis Motor Speedway.

On April 16, Animoto launched a Facebook app and started signing up 25,000 customers an hour, Vogels said, and went from using 50 servers to nearly 5,000 servers in about a week. "You’re not likely to find a VC that will invest in 5,000 servers for your company," Vogels said. "And if you do, you’re not likely to have much equity left." By using infrastructure services, Vogels said, companies can move it from a capital expenditure to an operating expenditure.

"So why am I telling you this at a media conference?," Vogels asked. "Because of the revolution we’ve gone through in the past decade. Consumers are now instantly aware of all the content choices available to them, which makes it highly uncertain that your product, whether it’s software of entertainment, will reach an audience. So you need an absolutely reliable infrastructure to make sure it’s immediately available to anyone who wants it."

YouTube: "The Video Monetization Equation"
Jordan Hoffner, director of content partnerships for YouTube, began his keynote by asserting that even though the company is the leader in online video, it needs to take "not just market leadership but thought leadership."

"I’ve got good news and bad news," Hoffner said. "The good news is that online video is now mainstream. 75% of people who use the internet use it to watch video. We’re now in the fabric of behavior for most folks, especially young folks." The bad news, he added, is that advertisers aren’t flocking online in the same numbers as are viewers, and so "people aren’t getting paid. The question is ‘why not’?"

Hoffner theorized that "monetization equals standardization plus innovation," and bemoaned the fact that there’s still no standard agreement on what a click or a view is. "I don’t know if we’ll ever get to the point where we’ll agree on what a gross rating point is online," he said. "Everybody knows what a TV rating is. Once there’s a standard that people can plug in (for online viewership), then the money will start coming in."

On the innovation side of the equation, Hoffner said that needs to happen on three levels: the consumer, the media company, and the advertiser. He pointed to YouTube’s video fingerprinting as an example of an innovation that benefits both media company and advertiser, and the company itself as an innovation that benefitted the consumer.

All Streaming Media West sessions will be available for viewing on demand within two weeks of the end of the show.

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