Kate Burns was recently appointed UK MD of video sharing site Dailymotion as the French start-up looks to expand internationally.
We asked the former Google exec about the challenges of monetising user generated content and how she is planning to build up the site's appeal to users and brands.
What have you been focusing on since joining Dailymotion?
My primary focus is to create this hub in terms of content. One of the main aspects of Dailymotion is our MotionMaker programme, which is a platform for unique independent filmmaking. That’s what really excited me about the company. We’ve been reaching out to the filmmaking community, independent production houses and enthusiasts. Not skateboarding cats and dogs, but quite outstanding grassroots creativity.
Alongside that, we are looking to develop the brand within the user community, which is quite a tall order. We have the usual strategies in place – search marketing and a bit of media, as well as partnerships. And then there is the third strategy, which everyone needs to earn a living. We’ve been building up our ad sales. We had just under 2m uniques to start with and we have quite a nice unique bunch of inventory, so we are getting ad sales off the ground. We are extremely busy.
Beyond that, we’re looking to develop some original programming and sponsored content. Already being a video sharing platform, we have a very receptive audience. We have a big community of filmmakers and contacts with independent production houses and it would be almost criminal not to utilise that. We want to bring in the brands as sponsors and I’m opening up those talks now. The feedback I am getting is that brands want to get involved – in the right kind of projects.
Do you have any targets for the MotionMaker programme in the UK?
The majority of our videos are UGC at the moment and the remaining 20% are split between official partners and MotionMakers. A good proportion of our videos are from MotionMakers and I am probably looking to quadruple the number of MotionMakers we have. I would like to have at least 2000 by the end of this year.
To what extent are you looking to distance the site from long tail UGC content?
Don’t get me wrong – UGC is the majority of our site and YouTube is so hugely successful because it is a UGC site. I think that without UGC, there would not be MotionMaker. There is this pyramid effect – UGC is a huge platform of content from which the creative and original stuff rises to the top. So we still absolutely encourage UGC and I wouldn’t people to think that we’re arrogant enough to think that it is not important to our business, because it is.
From a financial perspective, UGC is very difficult to monetise and that’s the reason why Dailymotion was one of the initiators of the UGC principles. We partnered with several companies including MySpace, Disney and Viacom last year to create principles around UGC. This meant we were anti-piracy and we initiated audio digital fingerprinting. We have really cleaned up and we take active and positive measures against copyrighting.
UGC is a very difficult platform to keep clean in that way, simply because kids will create videos and use soundtracks. All video sharing sites have to take a realistic approach to make sure that doesn’t happen for their partners. It is extremely difficult to monetise and extremely difficult to handle. But it is great for the community and in terms of sharing experiences and recording real events, UGC is an important part of the web experience.
From Dailymotion’s perspective, UGC hasn’t been core to our identity. The MotionMaker programme has been core to our identity. While we encourage any kind of filmmaking, we promote independent, quality filmmaking on the site. We prioritise that content even above our official providers like Channel 4 and the large broadcasters. They still get placement on our homepage but MotionMaker content is given the higher priority.
How do CPMs for in-stream video ads differ between your different levels of content?
We give the MotionMaker and the official content the same value because they are both creative, quality content and they are humanly audited by ourselves. In a lot of cases, users will view MotionMaker content as much as official partner content because we give MotionMaker content such a high position on our homepage.
Users will view creative content whoever it comes from. They want to see quality and want to be entertained. Advertisers can see that too. They want to be associated with creativity and independence, particularly aspirational youth and fashion brands. So CPMs for MotionMaker and official channel content are more and less the same.
Do you ever see there being a case for adding in-stream ads to long tail UGC?
My debate is whether in-stream within UGC is the right environment for advertisers. If I’m sharing a video of my daughter’s birthday, do I want to see a pre-roll? My opinion is that if the content is good, has been moderated, is free of piracy and is entertaining, then advertisers can and will be associated with it. It’s difficult if the content is unknown – it poses more of a risky environment for advertisers.
Personally, I think UGC can be monetised within a companion ad environment – banner ads and so on. But personally, I think in-stream can be used in a piracy-free and quality content environment. If the advertiser is sure of the content, then absolutely. Questions have to be asked whether the viewer is receptive to watching advertising within a webcam environment. That’s the question and I can’t answer that.
I would love to see more tests on how users respond to this kind of advertising. Only time will tell. I’m coming from a Google background and am a real believer in contextual relevancy and user experience, and I am taking that to Dailymotion. I still have that DNA and I want to ensure the user experience first. If the users are not responding, it’s not working. If they are responding and our advertisers are having good results, then that will speak for itself.
Have you been doing any research into that yet?
Not yet but we will be. We have just opened the UK office and in France, there are laws against in-stream ads on UGC. But there are clever ways to approach this. With UGC, there needs to be some form of monetisation. Bandwidth costs are huge so we need to find a way to monetise this community.
What are your bandwidth costs and how big a challenge are they in terms of profitability?
It depends. As a company, we serve up over 800m video views a month. So we have high bandwidth costs, but we are also a big user and we get a great deal. Bandwidth costs can range from 50p to £1.50, depending on the provider. We bear those bandwidth costs for every deal that we do. We have to.
I’m a commercial person and I am used to bringing companies into profitability. We are not a fluffy, naive start-up anymore. We are fully-fledged business and we mean business. My track record has been in turning companies into successful operations. So I am working very closely with headquarters to make sure we are creating a viable, profitable business in the UK. I am not doing this for fun.
Recent research by IBM suggested that around 1 in 10 online video users would pay small fees to remove advertising. Does this tally with your findings? Do you have any plans for a subscription option?
No. I can’t answer for the board and you never know, but I am a dyed in the wool advertising person. I hate subscriptions. Maybe I am getting too old, but I think the web should be free and I don’t think that users are naive about the fact that advertising funds the internet.
Going back to my old employer, Google did an amazing job in having advertising fund and become a large part of its experience. It showed that advertising doesn’t have to be a pain. In the right contextual environment, it can actually be a service.
This is what we want to work towards. Advertising shouldn’t be intrusive or hinder user experience. Video is a great example – the adverts are sometimes better than the content itself. This is why I am calling out to agencies and brands to start thinking along these lines. If I offer great experience to users, they don’t care whether it has been paid for or whether it is free.
Is product placement developing into a significant revenue stream for web video?
Product placement is an absolute gem that has been used in traditional TV and movies for years. It is more subliminal but in film, it is not clunky. It is beautifully done and very subtle and in some cases is an enhancement to the experience.
Looking at some of the product placements that have been slotted in to some web and digital series, they are absolutely dreadful. It looks clunky, it’s too obvious and is an insult to the intelligence of the audience. So in an ideal world, the subtlety and contextuality of the product placement is a perfect enhancement to the user experience.
Considering your Google background, are you doing anything to add more relevancy to in-stream ads in videos?
I can’t name any names but there are lots of exciting technologies out there that would allow us to target our video advertising. Image-based search, for example, is very exciting for the video market. We will be looking at some technology partnerships or evaluating them and see how they would fit into our service.
You recently signed a distribution agreement with Neuf Cegetel in France. Have you had any interest from UK ISPs or TV companies?
Absolutely. France is such an incredible market. We can be so xenophobic in the UK. It’s the island mentality. We don’t acknowledge how forward thinking the French broadband industry and users are. Broadband uptake is extremely high and multi-platform uptake is extremely high. Neuf Cegetel has received the MotionMaker programme with open arms.
So absolutely. I’m opening up these discussions now. Growing our MotionMaker community and increasing this content is going to be absolutely pivotal to our strategy. Once we are comfortable that we have a good degree of independent, original content, then we will have a really compelling offering for the IPTV environment.