Video whale Netflix has cracked 50 million subscribers, doubled international revenue and seems to be swimming towards an Australian launch. Some say the local broadcasters should be worried. But not Ooyala MD John Treloar. At least, not about Netflix.
He probably should say that, given that the company's video technology helps power Foxtel's Presto streaming service, as well as video content for other News Corp and Telstra properties. But Treloar says the threat isn't just from a bigger fish, or the established publishers and telcos investing in video. It's the shoal of piranhas out there that will put the bite on the big beasts. And not just the agile new media companies, but brands themselves.
“Presto, Quickflix [and the others] can have the same content [as Netflix]. There is no reason that Netflix should kill them. Other [Ooyala] customers have a lot of B-grade horror and sci-fi content for which there is a large audience – Piranhas eat New York type stuff. There is appetite for it.”
But death by a thousand cuts is a risk for entertainment channels. And fragmentation is only going to get worse across all sectors.
News companies are beefing-up video teams and their investment in becoming broadcasters is paying off. In the US, the Jeff Bezos owned Washington Post video portal, PostTV is, aptly, “very TV like” and gaining traction says Treloar. Locally Fairfax is already attracting bigger video audiences than some subscription TV channels, he adds. “SMH TV has a lot of documentaries (515 as of 22/07/14) and some of its audiences are bigger than some Foxtel channels.”
Likewise, the Australian Open (Ooyala did a deal with Tennis Australia two years ago) has made the governing body a broadcaster. “The average live view is 40 minutes and at times there are more people watching that website outside of Australia [than locally].”
The major sporting codes have already flagged that they want to take control of their digital video rights in the future but the less commercialised sports can be more nimble.
It could be a netball channel monetised by sports suppliers that is the next to take eyeballs and a chunk of advertising revenue from traditional sports broadcasters, says Treloar. While new media sites “would need a marketing campaign to get people to those sites, netball TV is not hard [to do because the fans and players are already there]”.
Brands are next, Treloar reckons, and while they might start out on the big platforms such as Facebook or YouTube to gain traction, brands will likely look at taking their content onto their own channels “because they want the data and ownership” and because they control the monetisation.
That could create competition for brand-funded shows and platforms. Using food as an example, Treloar is a convert to Taste.com.au, because “it is substantial in what it delivers”. But then Ooyala works with Taste. Treloar though says the current crop of celebrity shows and spinoffs could “face competition from smaller chefs that create their own channels on YouTube and then take them back to their own sites. It is such an easy thing to create. Or they could buddy up with large food companies. I'm amazed people are not doing it already because it is such an easy way to create compelling content.”
PizzaTV brought to you by Bertolli, or Barbecue TV via Meat and Lamb Australia would be quite easy to build, he suggests.
Similarly “Masterfoods advertises a hell of a lot on TV but could do it for a lot less online. There is no reason brands shouldn't do it. Based on their marketing budgets the cost for them would not be great. They have the content.
"And if they don't do it, somebody else will and they will lose out.”
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