Late last month MSNBC.com added a new feature to its Web site that lets viewers upload their own photos, videos and stories. The network’s foray into user-generated content is significant because it underscores an issue that networks increasingly face as they swim further into the online video business: whether to buy or build the technology.
In this case, MSNBC chose to develop the tools for its “FirstPerson” feature internally rather than contract with any of the growing legion of technology providers who are angling for a cut of the business from TV networks as they expand into multiple online video extensions.
The build-versus-buy quandary is intensifying as the number of technology firms that offer the tools to deliver Internet video grow in stature and importance. Firms such as Brightcove, Permission TV, Move Networks, the Platform, Extend Media and Entriq have been striking deals with broadcast and cable networks as well as with smaller production companies. But many of those technology companies say their biggest competition is not each other—it’s the networks themselves.
John Edwards, CEO of Move Networks, which serves up online video for Fox, E! and The CW, said he regularly faces off against the networks’ efforts to build the products and software in-house to deliver their shows and clips online.
That’s because many networks employ sophisticated software developers who can build to the precise specifications a network wants. ABC, for instance, chose to develop its ABC.com video player in-house, a project in the works only 60 days before its initial launch last May.
“We have that expertise in-house and it didn’t seem to make sense to go out when we have people to do it,” said Albert Cheng, executive VP for digital media at the Disney-ABC Television Group.
Also, he categorizes the player itself as content, and that’s something ABC likes to do itself. “Our core competency is creating content,” he said. However, ABC did contract a design vendor to help with the look of the user interface.
MSNBC.com’s FirstPerson feature is the inaugural item in an ongoing rollout of user-generated content on the Web site. The network wanted to maintain some control over the submissions process for the material users upload. Developing the tools internally allowed the editorial team to filter out comments or material that could be considered offensive or irrelevant, said Travis McElfresh, VP of technology at MSNBC.com. He evaluated products from vendors, but none fit all the criteria the network needed.
“There are a lot of platforms out there if you want a YouTube-like site, where everyone is uploading their content and it’s a free-for-all,” he said “We wanted to make sure whatever we got in front of consumers was highly relevant, so we needed it strongly filtered.”
Sharing the Load
In some cases, networks choose to outsource portions of an online video project but retain other segments in-house. For instance, Turner Broadcasting built the CNN Pipeline service that delivers CNN news clips to a specialized video player by licensing Windows Media technology from Microsoft and then building additional capabilities on top, explained Scott Teissler, chief technology officer for Turner Broadcasting. Turner added the ability to deliver four video streams at once in separate small screens on the player.
Like Disney, Turner draws on its existing resources and staffers for these new projects. Turner also has been developing online tools for CNN.com for more than a decade, giving it a foundation on which to build new services. “Anyone who has a big anchor-tenant Web business that’s been around and is an early entrant has people in-house who are used to working together. … It’s typically easier to make incremental modifications to what you already have done and add a particular feature,” Mr. Teissler said.
But Turner outsources, too. For instance, most of its networks’ sites feature a search bar that lets users search either the site or the entire Web. That functionality has already been refined by experts such as Google or Yahoo, so there’s no need to develop that, he said.
Other tools that make sense to farm out include community features such as message boards, because those features tend to be fairly standard and already have been tested in the marketplace. ABCNews.com turned to technology provider Neighborhood America for its social-networking tools. “We know what we are good at, and we can’t do everything in-house,” Mr. Cheng said.
Right now, user-generated content is the flavor of the moment, but it could be a fad that peters out. “You don’t want to commit to building infrastructure until you know it’s working,” he said.
Blogs are also a simple feature. Because blogs are hot right now, networks often need to move quickly to deploy them, Mr. McElfresh said. When speed is of the essence, selecting an existing tool can be the safest bet.
But oftentimes the speed to market can be the same when creating tools. Mr. McElfresh said product development for more sophisticated online projects can take five to six months, about the same time frame as working with a vendor.
Networks often turn to their own staffers first simply because that’s easy, said James McQuivey, principal Forrester Research analyst. IT departments usually opt to develop the tools in-house, he said. “The IT people aren’t looking outside, they are looking inside,” he said.
But vendors are picking up steam because their solutions have now been tested and proven in the marketplace, said Will Richmond, president of broadband video research firm Broadband Directions. He’s found that most cable networks, for instance, choose vendors to develop their broadband channels.