Social Video - Social Networking Sites: Key Innovation Partners for the TV and Video Industry

IDATE, April 2010, Pages: 103

Social networks appear as new video content distribution and promotion channels and provide also innovative community-based solutions to both TV channels and online video services. An analysis of the main trends of social video highlighting how social networks have become powerful partners for both traditional and new audiovisual players.

Key questions

- How can TV channels integrate social networking sites into their broadcasting strategies?
- Can social networks help free online TV and video services pull in enough additional advertising revenue?
- Will the social graph be a new performance driver for pay-VOD recommendations systems?
- How can social networks gain from these closer relationships with players in the TV and video industry?
- What strategies are being used by the key TV channels, free online TV and video service providers, pay-VOD players and social networking sites?

1. Executive Summary
1.1. Mass use of social networks and online video sites has given rise to new Internet titans
1.2. Social networks can enhance TV and video services in many ways
1.3. Challenges and strategies for the TV and video industry and social networking sites

2. Methodology
3. Social Networks and Online Video: New Mass Consumption Patterns, New Leaders on the Web
3.1. Social networking sites have taken usage to the masses and created new Internet titans
3.1.1. Now a major Web activity
User numbers keep rising
A growing proportion of online time
Every generation is involved
3.1.2. A handful of top sites see the most usage
Facebook has elbowed out MySpace
Twitter takes flight
Broad variations by region
3.2. Changing video viewing patterns
3.2.1. A booming online video market
More and more Web viewers
Web users of all ages watch videos online
Online video consumption intensifies in volume and duration
3.2.2. A market dominated by YouTube
YouTube, the online video leader in number of Web users…
…and in video views
New consumption patterns, new content
3.2.3. Viewers are developing a taste for catch-up TV
Catch-up services growing at full throttle
Catch-up TV drawing more and more viewers
Examples of successful catch-up TV services
3.2.4. VOD takes off
Definition of VOD
More services launched each year
Usage and revenue growing strong
VOD is essentially a rental market based around the TV set

4. What Social Networks Bring to TV/Video Services
4.1. Social TV: what happens when TV sets make room for social networks
4.1.1. Internet-TV convergence has arrived
Operators offering Web content and services in their IPTV packages
Strategy
A wealth of interactive applications on U-verse TV
Strategy
“Widget Bazaar” on FiOS TV, an innovative service launched in 2009
Social networks also available on television using TV sets with integrated software solutions
Beginnings
Key features
Accessing social networks
Portal devices and over the top (OTT) set-top boxes round out the options for accessing the
Internet and social networking from the TV
4.1.2. Social networks bring added value to the TV viewing experience
Burgeoning demand for social networking on the TV
Social networking sites give rise to “social TV”
4.2. Social networking tools at the service of free TV/video site users
4.2.1. Social networks offer data portability to third-party sites
4.2.2. Integrating social functions makes it easier to generate ad revenue
4.3. A new distribution and promotion channel for video content
4.3.1. Video viewing on social networks is on the rise
4.3.2. Video sharing on social networks is initiated by members…
4.3.3. …but also by media firms
4.3.4. Heightened visibility for TV and video companies and their content
4.4. VOD recommendation systems: the social graph improves performance
4.4.1. The social graph is ripe with economic potential
A network of social networks
Key elements still lacking for completing the social graph
Data portability
Platform interoperability
Looking ahead: extending the social graph to the World Wide Web
4.4.2. The social graph as a new performance driver for VOD recommendation systems
Recommendations are an important tool for on-demand services
The social graph generates more relevant recommendations
Early social recommendation solutions available for IPTV and cable

5. Challenges and Strategies
5.1. Television channels
5.1.1. TV channels are losing ground
Economic and structural factors are causing an erosion of major TV channels’ ad revenue
A mature TV advertising market faces pressure from the dynamic nature of the Web
5.1.2. To face these challenges, channels are focusing more on interactivity and less on community
networks
Upstream in the TV value chain, channels are investing in interactive television but not social TV
Two methods for integrating social networks into TV programming
Social TV initiatives by channels are still few and far between
5.1.3. Channels must become stakeholders in social TV
Social networks can help channels capitalize on their program lineups
Yet social TV does represent new challenges for channels
5.2. Free online TV and video services
5.2.1. Web sites offer community-based features, but not usually the same ones that are available on existing social networks
Duplication of social networks’ defining features
Only a few free TV/video sites incorporate social networking tools
Permanent integration still primarily a US initiative
5.2.2. Distributing content on social networks: the advertising challenge
Advertising is the primary source of revenue for online TV and video services
Ad formats used by TV and video sites
How advertising on online TV/video services is priced
In-stream video advertising still underdeveloped
Free online TV/video services must arrange for their content to be broadcast on social
networks
5.3. Pay-VOD players
5.3.1. Recommendations increasingly based on preference analysis
A filtering device used by all types of VOD services
Quality of recommendations varies by platform
5.3.2. Services turning to opinion leaders for recommendations
5.3.3. Online pay-VOD services are starting to offer social recommendation features
Social recommendations play little or no role on the TV
Online VOD services rely on community recommendations without truly integrating the social
graph
The right to privacy: TV/video players must use the social graphic with caution
Opt-in formats, transparency and user guidance are essential
5.4. Social networks
5.4.1. Natural partners for the TV and video industry
While a few social networks are commissioning certain programming directly…
When fiction and reality merge
Revenue generated through product placement
With success just around the corner…
…the AOL reorganization put an end to Bebo’s content strategy (for good?)
…most position themselves as tool providers and distributors of third-party content
5.4.2. Video as a source of ad revenue for social networks
Video expands the social networking audience
Content players are helping build ad inventory
Ad partnerships with the video industry
5.4.3. Community solutions for TV and video services: an additional revenue stream for social
networks
Important, yet insufficient, advertising revenues
Monetizing the social graph with the TV and video industry

Index of Tables
Table 1: Social network penetration by age in the United Kingdom, May 2009
Table 2: Top three social networks by country, 2009
Table 3: Growth of Facebook in major European countries and the United States, 02/08-02/2009
Table 4: Growth of online video consumption habits by country
Table 5: Top three online video sites by country in number of monthly unique visitors
Table 6: Top three online video sites by country in number of video views per month, 2009
Table 7: Growth of VOD’s share of the video market in the United States
Table 8: Internet services available on TV sets
Table 9: Interest in social networks on the TV, by age group, in the United States, October 2008
Table 10: Growth of video viewing on Facebook and MySpace in Europe and the United States
Table 11: Primary initiatives in data portability on the Web
Table 12: Overview of the two main API platforms on the social Web
Table 13: Primary types of recommendations used by VOD services
Table 14: Change in TV and Internet advertising markets, worldwide, 2006-2013
Table 15: TV channel initiatives in connected/interactive television
Table 16: Key free TV and video sites with a permanent solution for data portability from a social network
Table 17: Key features of above-the-line and below-the line advertising used by online TV/video sites
Table 18: Advertising pricing systems on online TV/video sites
Table 19: Examples of social recommendation features on online VOD services
Table 20: Definitions of the opt-in and opt-out personal data collection modes
Table 21: Advertisers who have signed a product placement agreement with Bebo to fund its Web series
Table 22: Selection of content partnerships signed by several major social networking sites

Index of Figures
Figure 1: Change in the share of active Web users age 16-54 who have created a profile on a social network, by country and worldwide, 2006-2009
Figure 2: Traffic on the top social networks worldwide, July 2009
Figure 3: Change in the share of time spent online each month on community sites in the United States, 2008-2009
Figure 4: Breakdown of MySpace and Facebook users by age category in the United States, September 200
Figure 5: Number of unique visitors on Twitter, worldwide and in the United States, February 2008-February 2009
Figure 6: World map of the most popular social networks by country, December 2009
Figure 7: Change in the share of active Web users age 16-54 who have watched videos online, 2006-2009
Figure 8: Online video usage by age category in the United States, January 2009
Figure 9: Change in the percentage of programs picked up by the primary catch-up TV services in France, 2009
Figure 10: Increase in the number of catch-up TV users in France
Figure 11: Proportion of online catch-up TV users in the United Kingdom by age group
Figure 12: Strong growth of M6 Replay since its launch
Figure 13: Number of monthly TV requests on the online BBC iPlayer service, 2009
Figure 14: Growth in the number of unique visitors on Hulu in the United States, 2009
Figure 15: Growth in the number of video views on Hulu in the United States, 2009
Figure 16: Change in the number of VOD services in Europe, 2002-2008
Figure 17: Breakdown of annual VOD sales in the United States, 2008
Figure 18: Breakdown of annual pay-VOD sales in France, 2008
Figure 19: Twitter and Facebook widgets on Verizon’s FiOS TV service
Figure 20: Twitter widget on Yahoo! TV Widgets
Figure 21: Facebook application on the VUDU Apps platform
Figure 22: Media multitasking and Web browsing: a common practice among teens
Figure 23: Change in the average weekly television viewing time by age in France, 1997-2008
Figure 24: Integration of Facebook Connect and Sign In with Twitter on the CBS Web site
Figure 25: The most common ways of sharing videos online in the United States
Figure 26: Video published to a Facebook profile from the site TF1.fr
Figure 27: Sharing features on Spanish channel Antena 3’s Web site, on YouTube and on Hulu
Figure 28: Login window prior to sharing a Dailymotion video on Facebook
Figure 29: Hulu on Twitter
Figure 30: Excerpt from an episode of How I Met Your Mother posted as a sneak preview on the series’ Facebook page before it was broadcast on American channel CBS
Figure 31: Official Store tab on Lost’s Facebook page, where fans can directly link to ABC’s e-commerce site
Figure 32: Notification from the How I Met Your Mother page in a Facebook fan’s News Feed
Figure 33: Notification from the Dexter page in a Facebook fan’s News Feed
Figure 34: Representations of the social graph
Figure 35: MySpace and Facebook advertisements targeted based on users’ social graphs
Figure 36: If CanalPlay offered recommendations based on the social graph
Figure 37: How Affinity works
Figure 38: VOD recommendations from friends on Compass
Figure 39: Social recommendations on ContentWise
Figure 40: TF1 widgets on Samsung screens
Figure 41: Rerun of Fox’s Fringe in partnership with Twitter
Figure 42: Creating a profile to join the RTL community on the German channel’s Web site
Figure 43: The “Strictly Social” page on the BBC site
Figure 44: Integration of Facebook status updates on CNN.com
Figure 45: Integration of Facebook status updates on TF1.fr
Figure 46: Inviting Facebook friends to Hulu
Figure 47: Examples of in-stream advertising formats offered by Hulu
Figure 48: Hulu Watch Now on Facebook
Figure 49: "Certified Fresh" award for the best films, from Rotten Tomatoes
Figure 50: Reviews from the Rotten Tomatoes site integrated into VOD service VUDU
Figure 51: Movie recommendations suggested by director Robert Guédiguian on VOD platform CanalPlay
Figure 52: “Our TV Picks” on Fancast
Figure 53: Example of a Beacon update appearing in the News Feeds of a Facebook member’s contacts after she rated a video on the Blockbuster site
Figure 54: Example of a notification generated by Beacon on the Facebook page of a user who has rented a Blockbuster video
Figure 55: Ad for Married on MySpace
Figure 56: Bebo profile of the character KateModern, who died at the end of the first season
Figure 57: Cadbury product placement in Bebo's Web series KateModern; the candy brand is sponsoring the second season
Figure 58: Breakdown of advertising spend on online networks in the United States 2009

- ABC
- AT&T
- BBC
- Beacon
- Bebo
- Blockbuster
- CanalPlay
- CBS
- CNN
- Comcast
- cyworld
- Dailymotion
- Facebook
- Fancast
- Fox
- Hulu
- M6
- MySpace
- Neptuny
- Netflix
- Orca Interactive
- Pro Sieben
- RTL
- Seachange
- TF1
- Twitter
- Verizon
- VUDU
- Yahoo!
- YouTube

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