SMWest 2006: Is there money in podcasting?

Steve Safran October 31st, 2006

Streaming Media West 2006 Panel

The Business of Podcasting and Video Blogging

Moderator: Molly Wood, Executive Editor, CNET.com, CNET Networks Inc.

Bob Fogarty, VP of Sales and Development, PodZinger
Andy Plesser, Founder and CEO, Beet.TV
Robert Scoble, VP of Media Development, PodTech Network

Moderator: Is there money to be made from podcasting?

Scoble: Rocketboom is getting about 300,000 viewers. Ze Frank is getting CPMs between $20 and $80 – closer to $80. The cost of streaming it is about $14 per thousand. FM Media just saw its first million dollar sales month last month and they pass along 60% of that to their clients.

Plesser: If you establish a great niche audience, you will do well. More and more companies will sell post-roll video. Video blogging as I see it is an entirely new publishing platform that can be embraced by companies, too. PR clients want to get on television. Guess what? It’s very difficult. Why don’t you start your own TV platform? It’s very simple to do. As a consulting firm, it’s very simple for us to do. Using video is a great way to unlock the intellectual capital at firms.

Scoble: By building a sizeable audience, you will get better search engine placement. Linking behavior is strong on videos. When the Internet Explorer team introduced RSS, we did a press release, a standard site and a video – and my video got 20 times the views the others did.

Fogarty: We’re aggregating the world’s content and funneling it, and even there we don’t have huge reach. The reach is coming and we’re working to grow the traffic to provide the content people want to see. More important is the ability to associate your brand with someone like Mr. Scoble. I don’t know a CPM model is the best way to quantify it. Sponsorship is taking the leading edge. More of a bidding scenario and an open market may come through.

Plesser: It’s like the early days of television where you had one sponsor for a whole show. Let’s talk about format publishing: I publish in Flash, Scoble does not.

Scoble: I’m a loser!

Plesser: Flash is ubiquitous now – 95% of the browsers. But it’s not on iPods.

Scoble: Getting videos onto PSPS, WindowsMedia Center, iPods, it goes on and on.

Moderator: Aggregation vs distribution… is the model RSS, aggregation, both, neither?

Plesser: Since we publish on a blog page it’s very searchable and we get a lot of metadata. I interviewed Chad Hurley when YouTube was purchased, and a search came up with Beet.tv at the top.

Scoble: Even if you do the video badly, linking behavior can drive you way up. Your listing is based upon linking behavior.

Fogarty: We’re used to text search. Our eyes are pretty good at scanning search results. What we’re finding at PodZinger is – because we’re exposing a snippet of the clip – it’s really allowing the user to have a quick assessment. In our player there are downloads and RSS buttons. But people aren’t really using that. They’re spending 35 minutes in PodZinger looking for video.

Moderator: Returning to the money – is there a viable subscription model or are we talking about ad-supported only?

Fogarty: I don’t think ad-supported will work.

Plesser: Could be some premium sites, but mostly ad-supported.

Scoble: There is the porn industry… (laughs). Look at Ze Frank – Revver is putting an ad at the end of his podcast and they’re getting a $15 - $16 CPM. He’s getting his audience to join his community and now he’s selling advertising to his audience as “duckies.” He collected $10,000 last week. There’s a battle of numbers going on between Ze Frank and Rocketboom. Rocketboom says it has 300,000, Ze says he has 30,000. I found I got more of a response when I was on Ze. There needs to be a better way of measuring interactivity.

Fogarty: We found that young men don’t mind advertising if it’s entertaining. They’ll even download it. We need to develop better ads for the niche audiences. We found that users couldn’t tell the difference between 7, 9, 10 second ads. 15 second ads are the threshold. 16 seconds might as well be 30 – they go away. Showing them a timer that counts down the ad also helps engagement.

Plesser: Google is doing a deal with Coke surrounding the Mentos/Diet Coke explosion. There is a huge demand for video. Downloadable for pay is going to happen – a site called Savory Cities lets you save a video for a dollar.

Moderator: CNET found the audience accepting of an ad in the middle of an audio podcast. But the advertisers still wanted a 30 second preroll ad in front of video.

Plesser: Preroll is kind of dicey. Postrolls are an option. There are going to be different ways of advertising.

Moderator: We still have the problem of metrics – we can sort of track the number of downloads, but can’t prove that anyone listened to the podcast.

Scoble: There is a fourth metric: engagement. My friend went on a 50 minute podcast and late in it he mentioned he’d give a free download to people who were still listening. He had 450 downloads as a result of that mention, so that gave him a metric.

Plesser: We as content developers are going to have to prove the worth. Advertisers will know if there is practical feedback either through direct action or brand awareness.

Fogarty: I like the engagement metric.

Question from audience: is there an ideal length for a video podcast?

Scoble: I’ve been asked to cut mine down but they usually run 45 minutes and I have 4 million viewers! I want to go in-depth and find out about businesses and get demos. I can see that people have downloaded our files, and they are big – about 200 megs.

Fogarty: Our average video blog is about eight minutes.

Plesser: (To Scoble) Why such a large file? Why would people download a 200 meg file from you, Robert?

Scoble (joking): Because I’m sponsored by Seagate and I have to fill up your hard drive! (Laughs). Most viewers are watching in a browser, so you can watch the metric about the completion of a video download.

Question from audience: does the demographic drive content?

Plesser: Whether people have time to download – some do, not everyone does. About a third of the people who come to our site do. The young people, college kids – they’re going to take the lead.

Question: What are you doing to keep streaming costs down?

Scoble: If you’re hosting it on your own servers you have to be a ferocious negotiators. We’re hosting it on Akamai and getting a much better deal. There is negotiating power. One way is to use free services like blipTV or revver and giving up a little of the revenue. Working with ad rep firms helps, you have to decide if you want to collect all of the revenue or some of it.

Plesser: The cost is very low. There are free services, you can publish your own Flash, it depends on how big the files are and how popular you are. The tools are simple now. The cost to entry is low. I would urge everybody to get a digital camera, bring it back to your office, open an account with a file sharing site and do it.

Scoble: There’s a good site called freevlog that explains that.

Plesser: When you think about publishing video – publish it on a video blog. Open it on TypePad or whatever, drop the code right in and magic – the player is right there.

Scoble: Blip TV automatically writes the code and shoves it over to WordPress.

Question: How important is it to you to control the distribution of your content?

Scoble: It totally depends on your monetization model. Ze Frank hates it because he wants you to be a part of his community. At Microsoft we put it all out on Creative Commons because it helped us. At PodTech we’re still arguing about it.

Moderator: (Molly Wood) At CNet, one of the big complaints was that our videos were not sharable because they were wrapped in advertising.

Question from the audience: What is the range of CPM advertising?

Moderator (Wood) Everyone’s still arguing the CPM question and nobody even knows if it’s going to be the model. My feeling is that it won’t be the model because of the metrics issues we still have.

Fogarty: If you partner with an ad network, you’ll see $2 - $4 for video ads. If you sell it on your own, it’s $20 - $40. We have a sports radio partner, and the CPMs there are much higher.

Question from audience: Explain more about the metric of “engagement”

Scoble: It’s tough. My friend Buzz at Active Words had a five star review on USA Today and had all of 32 downloads. I linked to him and he got 430 downloads. When I was on Leo LaPorte, people called me from around the world and I hadn’t gotten that reaction from other podcasts. But again, how do you explain that to an advertiser?