Technology

Online TV Sites Battle for Viewers


Sites like TV.com, Hulu, and Joost that feature much of the same content are hoping that social-networking features will put them ahead of the crowd

On TV, content is king. But on the Web, community may reign supreme. Throughout television history, the way to lure most viewers was to air the best shows. It doesn't necessarily work that way on the Web, where many shows can be seen on multiple sites.

Take the recent announcement by CBS (CBS) that it would begin airing shows like Showtime's Dexter and Sony Pictures Television's (SNE) Bewitched on TV.com, CBS's online site for full-length video. But none of the more than 1,000 new programs are exclusive to TV.com. And the episodes of Bewitched, the classic sit-com featuring the nose-wrinkling witch Samantha, are already on rival Hulu, the joint site of NBC Universal and News Corp. (NWS). "Every major studio right now is following a nonexclusive strategy" online, says Arash Amel, senior analyst with London-based media researcher Screen Digest. "The question for these sites is beginning to be, 'how do you differentiate yourself beyond the content you have?' "

The answer for TV.com and others is to encourage users to form a community. Host sites including TV.com, Joost, Sling.com (SATS), Veoh, Fancast (CMCSA), and Hulu are letting users post reviews, build profile pages, form fan groups, vote in interactive polls, and share activity logs with friends.

boosting advertising value

Like newspapers and other media outlets hoping social networking elements will foster loyalty among users, TV sites want to find ways to keep viewers on the site longer and get them to recruit friends. It's too early to tell what impact the new features will have on the bottom line, but the aim is to entice more content producers to put programming on their sites—and to boost the value to advertisers.

Building online communities for video sites has been tried before. The standard-bearer for online video, Google-owned YouTube (GOOG), came into prominence partly because of its focus on community. Its multitudes of short, often whimsical clips uploaded by users are well suited for commenting, rating, and sharing with friends. But YouTube's lack of professionally produced content has also deterred advertisers.

With the market for online video advertising set to grow to $850 million in 2009, from $587 million last year, YouTube is expected to cede some its share of the market to the growing number of sites with studio-produced content. "The professional sites are one of the main drivers for that 45% growth this year," says David Hallerman, a senior analyst at researcher eMarketer.

Mixed Results

TV.com and its ilk are borrowing some of the social tools that made YouTube a hit. On TV.com, users can comment and review videos, enter discussion forums with topics like "How/When did you start watching M*A*S*H*," create their own personal blog, make friends with other users, join groups, and edit Wikipedia-style reference pages on shows, episodes, and actors.

Yet the site has had mixed results since its acquisition by CBS, announced in May. Anthony Soohoo, senior vice-president and general manager for entertainment and lifestyle at CBS Interactive, says the site counted some 125 million votes for its Best of 2008 Awards promotion in December, and that "activity on the site is significantly up from last year" in areas such as the forums and wikis. But CBS won't share its internal metrics on these hard-to-track activities. According to comScore (SCOR) Video Metrix, TV.com's unique viewers dropped 55%, to 160,000, in November 2008, from last May when it had 355,000. The analytics firm also tracked big declines in videos per viewer, minutes per viewer, and minutes per video for the site in the same period.

Many of those viewers are flocking to Hulu. Since its May launch, Hulu has become one of the top online destinations for videos, drawing more than 22 million unique viewers in November, who spent an average of two hours on the site over the course of the month. Experts say Hulu owes most of its success to the elegance of its design and the strength of its content, including hit shows from Fox and NBC (GE) that air exclusively on Hulu.

Outsourcing Community to Facebook Connect

But Hulu also relies on elements that help engage viewers. Registered users have the ability to rate clips, shows, and films, and to engage directly with one another in discussion forums. According to data compiled for BusinessWeek.com by Compete, a Web analytics firm, some 25% of Hulu's overall visitors engage in video-rating—a huge lead over YouTube's similar feature, where only 0.5% of users pitch in. Hulu users also can vote on whether comments were helpful, similar to a feature on collaborative news sharing site Digg.

Hulu says it's careful not to inundate the site with social features. "We thought about creating an entire social network around our video player," says Hulu Chief Technology Officer Eric Feng. "But our users already have homes online on social networks, and to ask them to recreate that on Hulu would have been a lot of work."

Instead, Hulu will tap into the networks that already exist on Facebook. In coming months, the site will roll out Facebook Connect, a tool that would let Hulu users interact with friends from the popular social-networking site. After watching a video they particularly enjoy, users of Facebook Connect can embed it on their social-network profile and direct any comments they make about it to their Facebook activity feed. TV.com told BusinessWeek it also plans to launch Facebook Connect on its site in coming weeks.

The recently relaunched video site Joost has already plugged its users into the Facebook tool. More than 27,000 Joost users have set up Facebook Connect, the highest number of any of Facebook's 1,000-plus Connect partners. According to Compete, over 18% of Joost referrals come from Facebook. "Part of the challenge of making video social on the Internet is not just hooking it up to a Twitter feed or a social graph, but making features that recreate the Golden Era of television, of watching a program on the couch," says Joost Chief Executive Mike Volpi.

The Bottom Line: Targeted Ads

Volpi says the social interactions on video sites like Joost will eventually prove invaluable to content creators and advertisers. Currently, he's tapping user data to help content partner CBS determine the average age of its Joost viewers on a particular program; by checking the age of viewers of the show against their profiles on Facebook, he says he can offer them a more accurate idea of the demographic than the numbers Nielsen might give them for a TV audience.

Eventually, video socializing might also benefit advertisers. "As the prevalence of quality on these sites becomes broader, advertisers will be looking to drill down and target individual users," says Mark Trefgarne, chief executive of LiveRail, a San Francisco-based startup that develops platforms for monetizing online videos. "If you put one commercial across the entire site, you might see an average click-through rate of 1%. If you're targeting it down to those particular users on the site, you can very easily double that performance," Trefgarne says.

For the time being, these sites don't have the critical mass for targeting by demographic to make sense, according to Tod Sacerdoti, chief executive of Brightroll, a large online video ad network. Adds eMarketer's Hallerman, for now, "the advertiser is mainly just seeking an audience who's going to spend more time on the site."


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