Today I went to the MassTLC unConference. It was an interesting structure for a conference, where the entire agenda is created by the audience on the day of the actual conference. It brought together a great mix of entrepreneurs, investors, and technologists for a day of interaction. The structure (or rather unstructure) allowed anyone to create a session on any topic by simply writing it up on a card, picking a time and a room, and posting it on the central board. Then people could review the “agenda”, and pick the topics that they were interested in. It worked better than it sounds, and better than I was expecting.
In the morning I went to a session on digital video on the internet. We talked a little bit about the technology, but ended up focusing on business models and monetization. The biggest challenge right now for web video is monetization. One investor specifically commented that they are staying away from web video currently for that reason. One of the biggest challenges is getting ad buyers to understand and get comfortable with the new mediums. It’s a dollar to dimes issue that the video industry will have to come to terms with. The newspaper industry is already dealing with this. Essentially, for every dollar of revenue that newspapers (and soon broadcasters/cable companies, video producers, etc.) are losing, they are only seeing 10 cents of revenue from their online equivalent. There are two ways to address this: lowering production / overhead costs to make that 10 cents more valuable, or increasing that 10 cents through innovative advertising channels. There is a lot of creativity going into that space now, but Madison Ave. hasn’t caught up yet.
We also talked about the monetization potential of different content types. Niche sites generally have more loyal audiences and higher CPM rates, but are harder to scale. Premium content with higher production value has a larger total audience potential, but needs much more advertising revenue to support that higher production cost and higher paid actors.
At YouCastr, our sports focus makes our web video addresses many of the concerns with distributed video. For one, large brand advertisers like Nike and Coca-Cola will be comfortable associating their brands with high school and college sporting events, which are safe. Second, sporting events are long and have natural breaks, meaning people are willing to sit through a short pre-roll if they are going to watch a 2 hour event, and ads during timeouts and halftime are generally accepted. And third, we are not planning on producing the content, which means we can monetize an audience of 1, versus ESPN which needs tens of thousands (if not more) viewers to pay for the production cost and opportunity cost of showing something on a cable channel (fixed distribution inventory). Fourth, sports fans are LOYAL. I can go on about the business merits of focusing on sports, but maybe I’ll have to devote an entire post to that.
I also had a couple of interesting lunch sessions. The first was with James Geshwiler from Common Angels. We talked about angel fundraising, key challenges, and the key differences between angel and VC financing. The second lunch session was with George Bell of General Catalyst. He was truly energetic, offered short but insightful feedback, and gave us all a good inside perspective about the impact of the overall economy on VC’s investment strategy. Generally, new investments are down in order to reserve cash for future deals and existing portfolio companies. The environment is definitely tough right now, but that’s also the topic for another post, this one’s already getting long.
In the afternoon, I led a session about attacking the Long Tail, which in our case means reaching long tail content creators (high school and college sports broadcasters) and content consumers (the small niche audiences for each sport). We had some interesting dialog about the challenges to reach them, and some effective ways to actually do it.
Overall, the day was great. Got to meet some really interesting people, and to experience a different type of conference that was very refreshing and created a lot of opportunities for chance encounters and casual conversation.