Wednesday, December 17, 2008

Switch Off Day

It's Brightcove switchoff date, where all their free accounts are either converted to paying accounts, starting at $500 pcm, or switched off.

For Brightcove it seems to have been a smart - and inevitable - business move. Some of the smaller players have been using 3 - 5 TB a month of bandwidth, which even at wholesale prices, amounts to $500 a month and it's pretty unlikely that advertising revenues covered this.

Fundamentally, Brightcove has moved from being an ad supported Web 2.0 company to a services company.

I've been contacted by dozens of these channels who feel that they've been left out to hang, but the reality is that it's high time the online TV market matured and developed a hardened commercial edge. 

I suspect that very few channels have made any significant money to date, but that does not mean that the opportunities aren't out there. As I have long preached, the answer is in implementing a mixed revenue business model to monetize the channel's audiences.

These include: banner advertising, instream advertising, overlays, sponsorship, competitions,and gambling (where permissible). Also pay-per-view and subscription can be used selectively if premium content is involved. However, the big missed opportunity is with ecommerce, where I've seen some spectacular successes in terms of revenue.

If you look at the business model now being followed in the music industry, where bands are more likely to make money from t-shirts rather than from track or album sales, it shows where things are going.

For this reason our own video management system, VidZapper, is soon to have an integrated ecommerce engine built in. Two income streams are better than one.

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