Who am I to say Robert Scoble and Mark Cuban are wrong?

Just read two excellent posts on the advantage of long term video. I first read Robert Scoble’s analysis who then pointed me to another good article by Mark Cuban.

Robert says that long video will win over short video big time. The reason for this is engagement. If someone is willing to sit out a long video, he must be engaged with the topic:

But why is YouTube going longform, which is what Silicon Alley Insider just reported?

Easy: it’s much tougher to monetize short videos of, say, kids doing skateboard tricks, than it is to put some ads into a long video like the ones I do at FastCompany.tv.

Advertisers also will pay a lot higher rates for those long-form ads.

Why?

Because someone who’ll watch a 30-minute video is HIGHLY ENGAGED. They are far more likely to become a customer than someone who just watches a two-minute entertaining video.

Robert is making a valid point here. Watching a video on the web for 30 minutes needs engagement. So assuming that the people that watch them have a genuine interest in the topic at hand is probably a good guess.

Mark Cuban approaches it from a bit of a different angle. He notes that Hulu is kicking YouTube’s ass in two ways. First, Hulu uses YouTube as a free distribution platform for short teaser video’s which are pre- and postrolled with Hulu bannering. This free service of YouTube drives traffic to Hulu. But more importantly, Hulu can actually generate revenues on each video on the Hulu Platform:

Which leads us to the one area, OK lets say two areas that Hulu is just stomping all over Youtube;
1. Revenue Per Video
2. Revenue Per User

Hulu has one HUGE advantage over Youtube, it has the right to sell advertising in and around every single video on its site. It can package and sell any way that might make its customers happy. Youtube on the other hand, has that right for only the small percentage of the videos on its site that it has a licensing deal with. For probably 99pct or more of the videos on the site, Youtube isn’t supposed to know what they even are.

Mark is probably right about that too. It sounds like the best business model a video service can have.

The thing that nags a little here for me though is that both Robert and Mark are talking from the service provider’s point of view. Robert produces video’s for Fastcompany and notes that they can monetize advertisement much better on those video’s because of this engagement of the user. Mark syas basically the same thing. But what about the user?

Just because he is engaged and is eager to watch a video for 30 minutes or more, that doesn’t mean he is also interested in watching advertisement. From the perspective of the investor, the entrepreneur and the advertiser it seems obvious that the engaged watcher is the to go for with profiled and contextual advertisement. But for the user point of view, it might just be someone interested in the video, not in possible ad harassment to go along with it. We have seen this business model a long time ago BTW. It’s called tv, and most of us use a TiVo-like service or the remote control to get around those advertisements.

It is such a difficult balancing act. Advertisement and customer engagement. I am convinced that on-line advertisement ONLY makes sense if the advertisement itself provides the watcher with value. Robert provides the perfect example of this.

Oh, and don’t even start thinking about the buying process. If you do, you’ll see why Gary Vaynerchuk is the most brilliant marketer out there right now for starting Wine Library TV. I’m going to do a whole post soon just on what Gary is getting that even Google and Facebook aren’t getting.

Watching someone talk passionately about wine (or food in general 😉 ) makes anyone remotely interested in the subject hunger for it. So providing wine advertisement there makes perfectly sense. It monetizes the direct need of the user to get his hands on a great bottle of something.

But that example doesn’t hold for a lot of the more tech oriented video content Robert produces. People might enjoy watching them, they are produced with fun, passion and craftsmanship. But I doubt it makes the user crave for something immediately. Technology makes us gadget lovers tick, but it hits the fourth step in the Maslow pyramid. Wine or food addresses our basic need for survival. No competition there.

In the case of Hulu it’s worse. There are engaged watchers there, but these are not targeted the way Gary Vaynerchuk’s audience is targeted. These are TV lovers, they merely switched their behavior to an on-line environment. And when they get advertisement that in itself doesn’t provide the watcher with any value? They will either use the remote control or get a TiVo like service to get rid of the advertisement.

So, from the perspective of the advertiser and the service provider I get the business model. But from the user’s perspective? Who am I to say Robert Scoble and Mark Cuban are wrong?