Do US Webcasters set the trends for the rest of the World?

Louisa Ha Bowling Green State University

US Webcast Market Environment

• Grew out of a highly commericialized, media-rich market: $690 billion in 2004 • Leads in ICT, contributed 13% of real GDP growth in the U.S. in 2004 • Advertising is the primary source of revenue for most media

Internet and Broadband Usage

• 81% have Internet access (Arbitron/Edison Media 2005) • Highest number of broadband lines in the world: 3.4

million lines • 25% of home users use broadband connection • Cable broadband slightly led over DSL (60/40) • Unequal broadband usage among cities: top markets up to 70% broadband use • Webcast as killer application for the broadband service industry: webcast content requires high bandwidth for quality delivery  Largest cable companies (Comcast, Time Warner, Cox) offer portal services with webcast  Leading DSL providers (SBC, Verizon & Bellsouth) partner with online service providers

Setting Trends in Web Audience Research

• Data from meter installed on a panel user’s computer e.g., Nielsen’s Netratings • Data from the webcaster’s media server e.g., Accustream

Leading US Video Webcasters

Webcaster

1. America Online 2. Yahoo Launch 3. RealNetworks 4. MSN Video 5. ESPN 6. Stupidvideos 7. MSNBC 8. Windows Media 9. IFilm 10. AtomFilm Source: Accustream 2004

Type

ISP PP PP PP CB PP CB PP PP PP

Streams

(in ’000)

Revenue

292,000 8.7 billion (’04)

Ownership Business Model

Public CA 250.000 3.6 billion 146,000 267 million 43,705 892 million 34,865 25,600 n.a.

n.a.

Public Public Public CA CA CA Public BC Private BC 24,309 17,712 17,619 3,000 n.a.

n.a.

n.a.

n.a.

Public Public CA CA Private CA Private BC

Leading US Radio Webcasters

Webcaster Type AQH Revenue Ownership Bus. Model

BC PP 18,481 n.a.

Private

Digitally Imported – di.fm

AccuRadio.com RadioIO.com

EnergyRadio.fm

BoomerRadio.com

Beethoven.com

3WK.com

90sFM.net

WolfFM.com

80sFM.com

PP PP PP PP PP PP PP PP PP 10,033 5,119 2,317 2,215 1,758 1,295 1,224 1,196 894 n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

Private Private Private Private Private Private Private Private Private BC BC BC BC BC BC BC BC BC

Webcast Business Practices

• Most leading webcasters are pure-play native Internet media brands: highest proportion of pure-play brand leaders in the world • - conflict between offline and offline media (fear of cannibalization) • - deep pocket support from publicly traded portal sites (in video), copyright problem of offline radio stations (in radio)

Webcast Business Practices

• Dominated by commercial webcasters who try to make a profit out of the webcasts • Branded Content most commonly used model, despite the top webcasters are all content aggregators

Ha and Ganahl’s (2004) ACR Webcast Business Model • Accessibility (technical standards and transmission methods) • Content Strategies • Revenue Sources

ACR in US Leading Webcasters

Accessibility

• 65% only uses one transmission method • Live streaming most popular, and used by all radio webcasters • Interactive features commonly found on webcast (e.g., games, chat rooms, ratings)

ACR in US Leading Webcasters (cont’d)

Content Strategies

• Very few original content (25%) • Mostly repurposed content (52%) • All web radio simulcast their content • Most choose specialized strategy, concentrate on one or two genres (75%) • Low cost content and short video clips are the norm

ACR in US Leading Webcasters (cont’d)

Revenue Sources

• 70% have more than one revenue source • Advertising is the most popular revenue source (90%).

• E-commerce second most popular (60%) • Direct payment by consumers only 40% of all leading webcasters.

• All direct payment services are tiered

US Leading the Trend?

• Leadership of Pure-Plays is different from the rest of the world • Commercial media leadership instead of public broadcast leadership in Webcasting • Technology development set the trends for the world: Media players (Domination of Windows Media Player and Real Player) • Tiering of content services: High quality content is not free • Pushing technology limits: High definition DVD quality video or CD quality radio content • Diversification of revenue sources: setting the trends for other countries • Continues the commercialized media tradition in the U.S.

• Partnership between broadband service providers and webcasters: a worldwide trend not set by the U.S.

Globalization of US Leading Webcasters • Only a few leading Webcasters establish local versions in other countries and become one of the leaders in host countries e.g., Yahoo (Canada, United Kingdom, Australia, Japan, and Taiwan), MSN (Germany, Japan, and Taiwan), AOL (UK, Canada), RealNetworks (Japan) • Local versions, not the US versions are the leaders: showing preference of local contents.

• Local versions follow the format, but the content is locally supplied.

• US versions seldom have foreign language choice for users (little interest in foreign users)

Outlook of the Webcast Industry • Clear diversification of revenue sources. Non-direct payment still the dominant mode in the U.S. – abundance of media choices. • Online advertising growth can fuel the development of webcast content for mass consumption • Increasing broadband penetration will increase demand for webcast content • Future depends on traditional media’s embracement or resistance toward webcast of their content – Webcasting as alternative delivery medium or stand-alone media service • Booming webcast industry in niche and professional markets such as Maritime TV, TV Worldwide, Internet TV for Assistive Technology • Combination of Webcasts and Webconferencing • Portable devices increases outlets for webcasts such as PDAs and cellular phones • Integration of technologies increase utilization of Webcasts such as VOIP, IPTV, Interactive programming guides.

• Integration with games and toys increase the market of Webcast.