Maybe There Actually Is a Way to Monetize Online Video

Upstart YuMe Can Track Content as It Travels Across Web

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LOS ANGELES -- Because his face is obscured by a black ninja's mask, it's impossible to tell if Kent Nichols ever smiles. More than likely, though, there's no scowl behind his cowl: The 34-year-old co-creator and star of the popular "Ask a Ninja" video blog and website inked a seven-figure deal with online-ad-sales concern Federated Media in January, and a six-figure book deal with Crown Publishing last month.
YuMe Newtworks will announce its latest client next week:, a beauty, fashion and entertainment-gossip video website aimed at teens and young-adult girls that's relaunching this week. YuMe has developed the capability to track and monetize's video content across nearly all distribution partners.

"I'm a filmmaker at heart," Mr. Nichols said, "But the Sundance model was crazy: So few movies ever get distributed that I couldn't lie to my family with a straight face."

Instead, Mr. Nichols hit up "anyone with a mortgage" in his family for dough, scrounged up $60,000, and took his ninja-as-Dear Abby shtick online in November 2005. A couple months later, the blog was featured on Apple's iTunes, and traffic stealthily and steadily climbed.

Deluge of web-video content
But with a deluge of web video -- both ninja and ninja-free -- available today, following Mr. Nichols' build-your-own-brand model might seem a little crazy, too. The most popular online video seems to be from one-hit wonders: That ubiquitous Korean kid playing Pachelbel's Canon on his electric guitar last summer won't be retiring anytime soon, so it's not even worth trying to bottle and sell lightning, right?

Actually, maybe it is -- as of this week.

"YouTube and [Yahoo's] Overture have convinced everybody that the best way to advertise is through them," said YuMe Networks CEO and co-founder, Jayant Kadambi. "But television advertisers don't buy channels; they buy shows that fit their demographics. Yet online, advertisers are forced into specific websites."

If advertisers aren't particularly well-served by the "anything goes" menu of shared-video sites, neither, it seems, are video publishers: For highly trafficked content creators, sites such as YouTube sometimes just leach audiences from what really goes ka-ching: their own websites. (Fully half of Ask A Ninja's exposure comes directly from its own website. Said Mr. Nichols, "It's hard when it goes viral.")

Looking to measure
On Monday, Mr. Kadambi's Redwood City, Calif.-based YuMe Newtworks will announce its latest client:, a beauty, fashion and entertainment-gossip video website aimed at teens and young-adult girls that's relaunching this week. YuMe has developed the capability to track and monetize's video content across nearly all distribution partners -- even shared-video sites such as Veoh or Brightcove. That's something no other content publisher has been able to do.

"We're starting with professional content creators, because they have mass," admitted Mr. Kadambi, "But is really just a proxy for that Korean kid with the guitar."

As such, YuMe is leaving a trail of breadcrumbs for bigger content players, such as broadcast TV networks, who might have the rights to syndicate their content, but don't have the practical means to release it into the wilds of the web and still make money on it.

"As the online economy develops, ad-supported video clearly works better than videos where users have to pay," said Brent Weinstein, head of United Talent Agency's online division, who also represents Ask A Ninja. "That said, the ad dollars only really make sense when you've got the largest possible audience. If you want to sell advertising, it can't prohibit you from reaching the largest possible audience."

Coming to terms with portals
For YuMe and its clients, coming to terms with the web's biggest portals remains a significant problem: If portals such as AOL and MSN are predicated on selling their own advertising, why would they ever want to carry video with someone else's ads?

"There are a few portals that say 'No!' to your selling ads right off the bat," said E.C. Morgan, the CEO of Soma Management. "But right now it's the Wild Wild West: Most sites, like Veoh, are willing to negotiate and split the profits 65/35 in favor of whomever's selling of the ads."

But even the biggest shared-video players' reluctance may be changing in the face of syndicators' success: On May 15, MySpace announced a plan to provide entertainment and news video channels on its site, with ad-supported content via The New York Times, National Geographic and Reuters, though MySpace execs were mum about the advertising model for the videos, and on whether MySpace or its partners would sell the ads. Close competitor YouTube's expressed policy is that video with ads not sold by YouTube is a violation of its terms of use, though YouTube PR execs there declined to speak about the near-term future of that stipulation.

Will content creators forgo mega-portals that won't share the wealth with them?

YuMe's Mr. Kadambi is optimistic: "That's a decision for the content owner. I tend to subscribe to the theory that the content owners have a lot of control."
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