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Lunch with Paul

December 14, 2007

A couple of weeks ago, I had lunch with Paul Kontonis, CEO and founder of For Your Imagination Studios. It’s amazing how much you can learn during a one-hour sit down session. Paul was very informative, and incredibly knowledgeable about the online video business.
 
A few helpful nuggets highlighted from Paul:

  • Advertisers buy in bulk which is why it’s impossible to sell an individual show that doesn’t have at least a million of plays. That’s why the aggregator companies package the shows and views together for advertisers. They need to reach a critical viewership mass
  • Full sponsorship (including overlays, banners, post-roll) range from $40-$100 CPM
  • When a page loads, the video is considered “viewed” but a lot of advertisers pay out on “plays”, meaning only if the video is played. This is why content creators are usually disappointed when their revenue is a lot lower than what the “view” number suggests (note: I’m not sure if this is always the case)
  • Auto-play vs. Play: sites that auto-play a video when you go to it will have about an 80% play rate (meaning nobody stopped the player when it loads), while sites that have no auto-play only get a 10% play rate. The reason not everybody does auto-play is user-experience. For example, a site that wants to showcase multiple videos on one page wouldn’t have all the videos start once the page is loaded. This does bring into question how advertisers are measuring CPMs and how one can maximize the number of plays
  • Most online video is not making money at the moment. Companies, such as FYI, are making more money off of branded content and other licensing agreements
  • The metric that is most commonly used to measure audience is views per month, not views per episode. The implication is that having more frequent shorter clips will likely result in higher views per month than less frequent, longer clips
  • Generally, you’ll have the highest viewership on Monday, then it trails off over the week, then spikes back up on Saturday
  • When launching a series, best practices indicate that having 3 episodes in your inventory during your big promotional period/announcement stage will lead to an exponentially higher view count than 1 episode. In other words, for example, if you have 100 people, and one episode, you’re likely to get 33 views. If you have 100 people and three episodes, you’re likely to get 250 views. If you have 100 people and five episodes, you’re likely to get 275 views. So the optimal point based on Paul’s experience is 3 videos in inventory since there’s diminishing returns after that. While this logic seems confusing at first, it makes sense. One video alone may not be enough to attract someone to watch the series. However, if there are three videos with three separate thumbnails, etc., there’s a higher likelihood that one of the videos is intriguing enough to cause someone to start watching the series
  • For serials, Paul recommends having a showplayer default start at episode one, with a link to the newest episode. This makes it easier for new viewers to start at the beginning. Otherwise, they have no context for the newest episode. This has been my concern for The Hayley Project. Without earlier context, it could become difficult to attract new viewers
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