In late October, DAVE Networks, a company that has provided the technology for Internet social community video platforms (iSPOT, April 11), launched Next.TV, a 50-channel Internet video-on-demand service in an exclusive distribution deal with Hewlett-Packard. The first viewers of Next.TV will be HP laptop owners, although DAVE Networks will launch a web portal early next year that will offer most of the content to a general audience. There will be a variety of advertising opportunities, from pre-rolls to TV :30s. Next.TV is the latest Internet TV offering, which may present a better advertising opportunity than the competitors, because of the large audience, according to Rex Wong, CEO of DAVE Networks.
iSPOT: When did Next.TV launch?
Wong: It launched late October on most HP notebooks. If you had a notebook that shipped from January of this year, you got an update that added the TV function to what was originally called QuickPlay, which is the way you play DVDs on the notebook. When you click on TV, we launched about 50 channels, which will be about 100 channels a few months from now. The content includes everything from CBS, CNN and AP news to National Lampoon and Endemol as well as channels from around the world from 40 countries. You’ll see live streaming broadcasts of Canal 9 from Argentina.
iSPOT: Each channel is represented by a different publisher?
Wong: Yes.
iSPOT: How did you make the arrangement with HP?
Wong: We’ve had a relationship with HP that goes back a couple of years. They were trying to do this project themselves and they couldn’t quite get it up, so they brought us in and we collaborated to build the function into HP notebooks. There’s a growing trend where video goes from analog to digital and the bandwidth goes up on the Net. Companies that make digital devices, which is the interface for digital content, are becoming the new outlet and distribution of content because they control the interface and they’re in front of the users. In terms of HP, they are the number one PC manufacturer in the world and have a number of digital devices, not only PCs, and a great retail presence. They wanted to differentiate their products from let’s say a Dell on the PC side. If you look at notebooks, they revamped the design and they’re called entertainment PCs that come with remote controllers with video outputs. This a digital convergence device, a smart set top box–you can use it to lean forward in front of the computer using your keyboard or mouse or you can you use the remote control for a lean back experience and even plug it in to your big screen TV. It’s meant to bridge the PC/TV experience that’s been the missing link to date.
iSPOT: Isn’t it your goal to bring Next.TV beyond HP, so other computers can access it?
Wong: In Q1 we’ll launch a Next.TV web portal that will have most of the content with more of a web experience. The difference will be it will be more webcentric than tvcentric. The quality of the video will be a little lower because on HP we have a downloaded piece of software that enhances the stream. On the web we’re not making people download anything, so the stream will be a little better quality on HP.
iSPOT: Will the same content partners be available on the web?
Wong: About 80 percent, some will not and some will be there that won’t be on HP. CBS will be there. Our strategy has been to go after consumer electronics manufacturers. Next.TV will be available on LCD TVs which will come with optional boxes to access the channels.
iSPOT: What kind of advertising opportunities will be available with the programming?
Wong: One of the interesting things on HP is we’ll have two types of programming. We’ll have linear or streaming TV and more on demand. What’s shipping today is the on demand piece of it and the streaming part is launching in Q1. Once streaming goes into place, it will be like TV. It will allow channels to stream so people will access it like TV. You’ll have standard 30 second blocks of commercials. The key difference will be there will more tracking and targeting for the advertising. For users there will be more choices and commercials can be dynamically addressed to each user so different users watching the same programming can get different ads. It happens through the software we have that’s loaded. Users can opt in to get the information they want to see and if they don’t opt in they’ll get run of network advertising. The on demand programming will get 15 second pre-rolls and there will be different things inside the content like interstitials and pop-ups that will be targeted against the content and come up at relevant times.
iSPOT: How long is the content that plays and how will that determine what kind of ads play?
Wong: We have everything from short form clips to 30 minute or one hour shows and movies, and ads will play in association with the content. You won’t see 30-second commercials against a three-minute clip, but you might see it against a 30-minute show. The ads will be customized for each type of content, but nothing is set in stone. We’ll try out things and fine tune as we go.
iSPOT: Will your company sell the advertising?
Wong: We are going to be selling it and some content owners will sell their own ads. CBS has a large ad sales force but groups like Endemol have never had one so we’ll help them with it.
iSPOT: Is there a revenue share?
Wong: Our models are revenue share with content owners and HP.
iSPOT: Have you sold any advertising yet?
Wong: There is some advertising from AT&T and Coca-Cola, but those weren’t direct campaigns but with groups we’d been working with.
iSPOT: Can you compare Next.TV with other Internet TV services like Joost, Veoh and Babelgum?
Wong: The key difference is it starts with a 10 million reach, because it’s available on 10 million notebooks. It’s a key difference for advertisers because it’s a much bigger number because of the HP relationship. They have a big Q4 push and a global launch in 90 countries. Even though the mechanics might be the same as Joost with a downloaded application, the user doesn’t have to download it because it’s already on the HP notebooks. That experience will appeal to less the techie, while other services speak to the tech geek who can download the software and load and install it. The seamless experience is the key to integration with HP.
iSPOT: How does Next.TV extend internet TV?
Wong: It’s more the integration with the hardware. We worked with HP on integration and making sure it worked, so it’s a lot more seamlessly integrated product. Notebooks have TV outputs and HP will try to position it. HP is a consumer brand so it’s a lot easier for them to do it than an upstart. The key for us and the content owners is we’re starting with a big base and it will grow over time because they sell a million PCs a month. It’s a big key for advertisers because they want critical mass and TV type numbers. A million isn’t even the worst show on the CW network. You have to talk of tens of millions for critical mass. Most web video is snack size two to five minutes clips, this is more about real content that is typically watched on bigger screens.
iSPOT: What kind of ad packages will be available?
Wong: Different packages based on the clips. Shorter run on demand streaming will be more like TV. When we talk to advertisers, one of the problems with 15 seconds and under is a lot of advertisers don’t have the creative so you’re talking about a subset of advertisers who have the creative outside of TV to fit online. You face a lack of inventory, which is one of the big problems. So :30s fit and we wanted it to appeal to a wider range of users and the average user is used to it on TV. So it’s similar to TV and we benefit from the integration with the hardware.
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