Jim Louderback Speaks Out on Broadband Video and Revision3 Network

"We are in the first inning of the real online video game," says former Ziff Davis and TechTV editor Jim Louderback. "We are still early in the game. It's where the Internet was in 1994 with text graphics and photos." In an exclusive interview with JackMyers Media Business Report, Louderback offered insights and advice for online video content producers, advertisers and distributors.

Last July, Louderback joined Revision3, which he describes as "an actual TV network for the web, creating and producing its own original, broadcast quality shows." The network currently offers 15 series, including Diggnation, TheGigaOM Show, The Totally Rad Show, iFanboy, Tekzilla andInDigital. In addition to www.Revision3.com, the series are distributed through a diverse network of platforms including iTunes, YouTube, BitTorrent and PyroTV. Last week, Revision3 launched The Digg Reel, showcasing the highest rated user-submitted videos on Revision3's Digg.com.Hosted by Jessica Corbin, the weekly series is being sponsored by Dotster for their Domain.com product.

"We are beyond the trial phase of online video advertising," says Louderback, pointing out that advertisers who are looking to reach the 18 to 34 audience that is opting out of traditional media, will increasingly look to online video for both their customer acquisition and brand marketing messages. "Marketers are seeing real success with branding and customer acquisition campaigns," and he cautions marketers, "if you are not trialing already, you better start very soon. There is a huge audience with more and more people watching every day. If video is not a part of your [media] mix for 2008, you need to rework the mix."

Target Younger Audiences

"Internet-delivered video is a new medium, just as cable was different from broadcast," says Louderback. He believes broadband video will evolve from the current predominant focus on short clips to increased viewing of "repeatable content that's entertaining or hosted by someone you trust." He also advises that ad standards haven't yet been written and "we don't yet know what will work." He believes new forms of broadband video content are just now being developed and it has not yet been defined which formats will generate revenues for content developers. He also recognizes that the early adapter audience is considerably younger than audiences that will evolve in a few years. At Ziff Davis, he points out, the magazine audience average age is about 45, website audiences average 35, and the core audience for online video is 18 to 35 years old. "The audience that can access online video has moved their life to the Internet. They are young. They skew more affluent and educated." In ten years, he adds, the audience for online video will be more consistent with the U.S. population, but in the meantime video content creators need to target younger audiences.

Fiction Series and Trusted Hosts

Online video is also "in a flight to quality," Louderback says. "Grainy images with bad audio will give way to more quality video that approximates TV viewing quality and audio. Content will be more engaging and the medium will move from 'spectacle' to 'story'. User generated content is fascinating but we are moving to fiction-based stories told in engaging ways." In addition to several Revision3 fiction series, he points to Prom Queen from Michael Eisner's production company and Quarterlife, from Ed Zwick and Marshall Herskovitz. On the non-fiction side, Louderback believes online video will evolve to "engaging hosts talking about things you are passionate about, real authentic people who you want to watch day after day, week after week." (Oprah? Ellen? Regis, Jon? Steven?) Louderback believes the of host-as-spokesperson sponsorship model -- similar to Howard Stern and, from the early days of television and radio, Arthur Godfrey, Ed McMahon and Ed Sullivan -- will help "make online video an actionable and highly effective medium." He points to a Revision3 survey of viewers on unaided recall that found one-hundred percent could remember at least one sponsor and over 40% had purchased from a sponsor. "There's incredible engagement with absorbing messages, and viewers are taking action." Because online video is evolving with a universal access model rather than a digital rights management model, Louderback believes sponsorships embedded in the content are the most viable for monetization.

Consistency and Continuity

Diggnationbrings to life the pages of the DiggSocial News Service, focusing on the top stories on Digg for several hundred thousand weekly followers, at a small fraction of the cost of a cable or broadcast production.Diggnation and other series are not bound by the time restrictions of traditional TV, with outdated scheduling requirements lifted as viewers have the freedom to watch whenever they want. But, Louderback warns, "there must be a standard of mission, audience, timing and frequency. Online video series need to have a mission and purpose and stay true to that mission. Programs have to be consistent from episode to episode and deliver on their promise. Producers must set a frequency and be true to that frequency. Don't tell the audience it's weekly and then deliver monthly. Deliver at the same time and deliver high quality, good looking well lit productions. And," he adds, "the most important thing is the sound has to be good. If sound is bad, it destroys everything."

Revision3 is launching a new slate of 'modern culture' programming that appeals to

people who are impacted by the loss of their favorite TV series as a result of the writers strike. Eleven new series are planned for 2008 and Revision3 is "seeing an uptick" in brand advertising with campaigns from GoDaddy, Addagio Teas, Southern Comfort, VM Wear, Netflix, Microsoft, Verizon, WebEx, Adobe and Virgin America, which promoted a two for one ticket offer on Diggnation and generated a response that far exceeded expectations, says Louderback. Sony Playstation Network made a significant investment in the 4th quarter for advertising that appeared in multiple Diggnation episodes, and hosts Alex Albrecht and Kevin Rose produced a custom demonstration video for the PS3 as part of the package. Sony has repurposed the video for distribution on other websites. (http://psncentral.ign.com/digg_hookup.html )

Revision3 was founded in 2005 by Kevin Rose, Jay Adelson and David Prager, with Louderback joining last July as CEO. Last June the company closed a Series B round of funding with primary investment from Greylock Partners, following angel investments from a group that included Netscape founder Marc Andresson.

For more information, contact Jim Louderback at jim@revision3.com. The debut episode of The Digg Reel is available at www.thediggreel.com. Subsequent episodes will become available every Wednesday at 4 p.m. ET.