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Futurewatch: Media & Entertainment

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Community Platforms
The second major platform category that gelled in 2007 is the community platform. Community platforms like KickApps, Ning, Prospero, and Pluck make it easier to build branded destinations with deep community features including profile pages, comments, ratings, blogs, forums, and chats. Where the social networks build community at a single destination, community platforms let thousands of destinations develop around specific interests, topics, niches, and brands.

Community platforms are largely complementary to internet TV platforms, and we see most of our customers using both along with a content management system to build out their web properties. But there is some competition around the area of user-generated content (UGC). Many of the community platforms support services for accepting video uploads from consumers or they integrate with these services from internet TV platforms.

Über-Ad Platforms
If you weren’t online in the spring, you might have missed the buying spree that happened as the first-generation ad serving platforms were bought up by major online media players. The flurry of acquisitions was part of a much larger trend around the development of what we like to call über-ad platforms.

Google, Yahoo!, Microsoft, and AOL are the four big players in this category. They’re all focused on building über-ad platforms that provide a one-stop shop for access to ad serving, ad networks, and all sorts of strategies for optimizing yield. The über-ad platforms will deliver ads in every major format across every major medium, and they are waging a battle that will reshape the technology and media industries in fundamental ways.

The reason is simple: Bits plus ads is a winning combination. We all spend more and more time with digital media whether that’s on a computer monitor, TV, phone, game console, radio, etc., and the ability to deliver ads in these environments has become a massive business that will continue to grow. By integrating across screens, ad formats, targeting capabilities, and sales strategies, the über-ad platforms hope to control how the digital world is monetized and, of course, participate along the way.

The über-ad platforms are just taking shape. While they come online, niche ad network and technology players are battling each other with either unique technology strategies or specific genre and category focuses.

Trends in 2008
As video content owners and website publishers walk into 2008, we expect several major trends will shape their strategies in the internet video market.

Branded Destinations
Nothing about the internet changes the fundamentals of media—value is created by controlling the content or controlling access to the audience. Media companies with established brands and new startups will continue to build successful branded destinations so they can control the access to audiences. We expect these destinations will leverage internet TV platforms, community platforms, and ad platforms to compete with the major aggregators by offering consumers a more focused and differentiated experience, including exclusive content, and by giving advertisers a better environment to build their brands.

Audience Networks
Because of the power of the big aggregators to reach new audiences, content owners will continue to develop distribution strategies that place elements of their content library into wide distribution, in most cases with advertising attached. Because there won’t be a one-size-fits-all solution, content owners will depend on internet TV platforms to help them manage the complex policy and technology challenges associated with implementing internet distribution strategies. They will use audience networks to bridge the gap between aggregators and their own branded destinations, which will make the web as a whole a much more interesting place.

Audience Monetization
To date the advertising focus in the internet TV market has been on monetizing video streams. But this focus is both shortsighted and not nearly as effective as thinking about how to monetize audience. By developing audience-centric strategies, content owners will look for new ways to blend ad formats, insertion policies, and targeting tactics across pages, short-form video clips, long-form shows, and open distribution. While they are more difficult to plan and execute, these ad strategies deliver greater yield and a much better user experience, which means better sustainability. These strategies will also take advantage of both direct selling and integration with über-ad platforms.

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