Hype and Money

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Hype and Money

I told Will Richmond at Digital Hollywood that I was really enjoying his e-newsletter. He looked quite startled and told me to pass the word along.

So here I am. I appreciated his post on June 5’s VideoNuze about the abundance of money that is plummeting into video aggregators — http://www.videonuze.com/blogs/?2008-06-05/Video-Aggregators-Have-Raised-366-Million-to-Date/&id=1867

By his account, more than $366 million of new funds have gone into companies that are still scrambling around to figure working business models. This makes me think strongly of Gartner’s Hype Cycle, with so much money chasing so few ad dollars…and video consumers still trying to figure what ad deployment they are willing to tolerate in front and surrounding their videos. A banner CPM with low clickthrough doesn’t pay for a video environment…yet. And advertisers are trying to pieces together the data they get back and the diverse opportunity sets.

As noted in the LA Times, Bit Player Blog, citing comments at the recent Advertising 2.0 event in NYC:

“As Roger Lee, a general partner at Battery Ventures, put it, the online video field is ‘dramatically overfunded.’ Lee said that there are more than 200 companies in the online video market and more than 200 in social media.”

And Metacafe spoke at that same Digital Hollywood saying that only 25% of their visitors were coming through their home page, making aggregators like this more like Quicky Marts for social-network referenced videos instead of viewing destinations.

Or are they hybrids, with vastly diverse time spent, hoping to convert our average of 64 videos viewed and 143 minutes/month for April 2008, according to the just published Nielsen Online figures, into “real time”. We’re pouring funding into time spent so far of about 1/2 of 1 day of average TV viewing per person in the U.S.