Cable Playing Catch-Up

Nov 21, 2005  •  Post A Comment

As mainstream broadcasters and cable programmers begin providing well-produced streaming video online, they are going to find they can’t just waltz into the broadband space and begin plucking customers immediately. They will face real competition from Internet incumbents-existing online services such as Break.com, AtomFilms.com and Heavy.com, which owned online video before it was trendy and which have harvested massive, loyal audiences.

Last week Break.com featured as one of its top videos a minute-long clip of a group of college kids pushing a friend in a shopping cart down the stairwell in their dormitory.

Admittedly, it was sophomoric-a typical college stunt. But it was also pretty funny.

That’s why it’s one of the leading videos on online video channel Break, a Web TV venue that is generating massive traffic to its assortment of user-created videos. Break is on pace to attract nearly 10 million unique monthly visitors watching more than 100 million video clips this month. According to Nielsen//NetRatings, the site generated more than 5 million unique visitors in the first half of November.

That’s about three times Comedy Central’s 3.3 million monthly unique visitors. Comedy Central’s newly launched broadband platform MotherLoad had close to 50,000 unique visitors the week of Nov. 7. Because Break is focused on comedic short videos, it’s right in the Comedy Central competitive arena.

AtomFilms lures between 5 million and 6 million unique visitors monthly.

To compete, cable networks will have to develop the same following online that they have on-air, said Will Richmond, president of research firm Broadband Directions. “There’s no question there will be competition. These earlier-stage Internet-only brands have a lot of flexibility to create their models on the fly because there is not an incumbent business,” he said. But he added that cable networks do have advantages in their promotional ability.

And even though the videos on Break.com are all “user-generated,” they’re the good ones-the kind that the Internet avant-garde set forwards to friends at the pace of about 6,000 videos daily, such as video of Norwegian soldiers singing “Kosovo,” a parody set to the tune of the Beach Boys’ “Kokomo,” or a clip of a girl setting the world record for, of all things, cup stacking.

People Are Watching

Not only are the videos actually entertaining, which can’t be said for a lot of user-generated content, they are also being watched. The site’s 10 million projected visitors this month is up from 3 million in January and 600,000 in June 2004, said Keith Richman, CEO of Break.com.

Break.com, then, is well positioned to make its mark on the newly developing market of user-generated content, said Mike McGuire, a research director with Gartner. “I am certain and am sure [cable networks] are very well aware,” he said. “It’s competing for time.”

But the real reason a service like Break should be watched keenly by the big brands is because the content is good. Break.com recognizes that despite the fact that anyone can create content in today’s world of cheap and easily accessible tools, not all content deserves an audience. “We are saying everybody can do it and we can provide a filter,” Mr. Richman said. “The Internet has been fantastic at allowing everyone to have a voice, but there’s so much there that someone has to take the time to be the first filter.”

So Break.com programs like a network, operating as a meritocracy. The site receives more than 9,000 submissions per month. An internal team rates and ranks the videos and posts the best 120 to 130 monthly. The service also posts at regular times-about five a day, six days a week.

“The reason we have been able to build to this level and sustain is because of our programming formula,” Mr. Richman said.

Break.com pays about $100 for each video that makes it onto the site and will begin paying a posting prize of $1,500 for the top-ranked video, based on user ratings and how many times it is seen.

Rapid Growth

The service has grown astronomically over the past year because of the accessibility of tools for people to create content, whether it’s making a song parody, taping a friend doing an MTV “Jackass”-style stunt or capturing one of those everyday moments people wish they had recorded and now can.

“Amazing things happen all around. You just don’t usually have a camcorder in your pocket. But now you do [with phones and digital cameras],” Mr. Richman said.

That means Break.com gets to participate in one of the most attractive business propositions user-generated content affords-getting to sell ads against content you don’t have to create. Break.com is profitable through its sponsored ads and banner links.

Next year, Mr. Richman said, Break.com plans to integrate video ads. But the ads will also remain true to the content of the site. “We could [post a] make-your-own Nike commercial and have people invested in the brand and have Nike be the judge,” he said. “[It could be] ‘Tell us your best story about your Nikes’ and let people create the ads.”

Break.com content is also available on wireless phones through the youth-oriented mobile service Amp’d Mobile. Amp’d members can also submit videos to Break.com through their phones.

Like Break.com, AtomFilms pays for and licenses content, but has focused on the professional or semi-professional market, trawling for material on Web sites, at film festivals, with production houses and via submissions.

“Submissions [are] a good source, but it is only one part of the equation,” said Mika Salmi, CEO of AtomFilms. He added that the amateur category is an area of potential expansion for his company.

The Internet Video Playing Field

Cable programmers must cultivate an online audience while confronting competition from entrenched online video sites. Here’s a sampling of some Web video sites that have already built a following.

Heavy.com: Attracts about 6 million unique monthly visitors to its broadband network of irreverent content that includes animation, live-action shorts and some user-generated content.

iFilm.com: Recently purchased by Viacom, it delivers more than 30 million streams per month of movies, short films, TV clips, music videos and viral videos.

Youtube.com: Allows anyone to submit, upload and share videos online.

Break.com: Formerly Big-Boys.com, this user-generated content service is on pace for nearly 10 million unique visitors this month.

AtomFilms.com: Attracts 5 million to 6 million unique monthly visitors for animation and short films. -Daisy Whitney