FreeWheel and the new wave of on line advertising.Friday, May 8th, 2009 by Giuseppe Piersantelli
Video content distributors and aggregators, like YouTube, are currently looking for new, profitable business models in order to monetize the million videoclips distributed everyday for free. The current ad-funded models, most of them based on the display of some advertisements, banners and sponsored searches, aren’t helping video portals to pay the bill of servers, bandwidth, distribution and storage (not to mention some major legal issues).
Reporetedly, News Corporation’s Mr. Murdoch said today that in the future some on line newspapers won’t be available for free anymore: readers will turn to subscribers if they want to access content like news and videos.
Personally, I believe that many other websites and companies will follow Mr. Murdoch’s advise; users will be supposed to pay some bucks in order to get quality and premium content. But on the other hand, new sets of ad-insertion systems will be developed for video content.
A good example is FreeWheel, a on line video advertising service and technology which looks very similar to AdSense.
According to multimedia consultant Phil Leigh
The FreeWheel service provides four functions.
- First, it identifies sales rights. That means that it determines what companies have the right to sell a piece of content. It assures content owners that their ads are not pre-empted by ads sold by others.
- Second, it pinpoints the right ad to run. Given a number of ad sellers, CPM rates, and display platforms, FreeWheel pinpoints the ads that will drive the highest possible yield. All this happens in milliseconds.
- Third, it serves the ad. The FreeWheel ad server can accommodate any video format and works with any video player.
- Fourth, it automates the financial accounting. Content owners, distributors, and third-party sellers are automatically assigned their rightful share of ad revenue.
Let’s face the reality: most of the future of web content is all about video. People are increasing their consumption of video content on the web. More than 60% of the data traffic on our IP infrastructure is generated by video content, which is progressively replacing still pictures on many websites and newspapers.
Despite of its dramatic increase, it is now very hard to monetize videocontent on the internet. Content providers, service providers and TLC operators are sharing similar difficulties. People are not willing to pay for video content, specially when it comes to short clips and UGC. Aggregators can’t monetize the little adverising they display on websites. Carriers must invest a lot of money in their network infrastructure to satisfy the increasing bandwidth demand but they are not getting any extra revenues in exchange.
For these reasons, many players in the digital imaging ecosystems are searching new ways to monetize their assets. As far as I am concerned, I believe that in the future we will see a mix of subscription-based model and ad-funded models, mixed together: this propbably will allow people consume premium video content, and providers and carriers continue distrbuting and aggregating videos making some profits.