By Brad Spirrison
Interview with Matt Spiegel
Appeared In Chicago Sun-Times
As Microsoft and Google chip away at YouTube's market share for distributing video over the Internet, Chicago-based television executives look to the Web for revenue growth and new programming opportunities.
San Mateo, Calif.-based YouTube launched its game-changing service last December, and currently streams more than 100 million videos a day. Traffic to YouTube.com is growing at 20 percent a month. Typical of many pioneering Internet-based applications, it is unclear how the service and others like it will ultimately make money. Clearly, though, more individuals are tuning into the Web for video. Research firm eMarketer forecasts a $650 million market for video streaming in 2007 and $1.7 billion by 2009.
"It is definitely happening, and it is affecting consumer behavior," said Larry Wert, general manager of WMAQ-Channel 5 in Chicago. "The way to monetize this activity is still evolving. Spenders are figuring out how to allocate their budgets."
Wert will be on the bill Thursday when the Broadcast Advertising Club of Chicago teams up with the Chicago Interactive Marketing Association to look at "The Intersection of Broadcast and Interactive" at the Hyatt Regency. Joe Uva, CEO of OMD Worldwide, will keynote the program, which will also include presentations from Deanna Brown of Yahoo! Media Group and Mike Aronow of the CBS Radio Digital Media Group.
Searching for revenue
"Every content distributor is trying to figure out ways of how to generate revenue," Wert said. "And consumer-generated content is really starting to emerge."
The NBC5.com Web site features video footage and information that appears on the television station combined with viewer-submitted and alternative programming better suited for the Web. A "My Video" segment invites viewers to submit footage a la YouTube and America's Funniest Videos. Moreover, expanded highlights of high school sporting events and episodes of the offbeat Nude Hippo show, which have a more natural place in cyberspace than on the TV dial, can be viewed on the site.
But is there any real money to be made selling ads around streamed video relative to what is earned from selling 30-second spots on the air?
"That is the billion-dollar question," Wert said, "and the one that all companies are asking themselves several times a day."
Joe Ahern, a veteran Chicago broadcast executive and current WBBM-Channel 2 general manager, believes streaming video "is very quickly evolving into a business that can make money."
Ahern, who ran San Francisco's top station during the Internet boom after an earlier run at WLS-Channel 7, believes technological advances empower the viewer. It is his station's job to recognize and respond to this new viewing behavior.
"We are not your father's Oldsmobile," he said. "The customer is our viewer. We need to ask how their personal needs are changing to learn how we can better serve them. If we crack the code on that, then that would really set us apart from the competition."
Channel 7 General Manager Emily Barr says her station's Web site is in many ways "an extension of what is on the television station." Barr positions the site as a vehicle to reach users when they want to be reached, and attract advertisers that otherwise wouldn't advertise.
"Cost does preclude certain-sized advertisers," she said.
Pat Muller, general manager of WFLD-Channel 32 and WPWR-Channel 50, sees promise in the Web, but acknowledges that "virtually all of [the stations'] revenue is from broadcast rather than the Web sites."
Fox 32 to go streaming
Earlier this month, Fox 32 launched MyFoxChicago.com to air longer-form interviews with athletes and celebrities, and will eventually stream live stories, Muller said.
Marketing dollars will steadily increase as video on the Web becomes more ubiquitous, according to Matt Spiegel, president of Chicago Interactive Marketing Association.
"Chicago is ripe for a lot of growth because of the big traditional marketers that are in the Midwest," said Spiegel, also a founder and managing director of search engine marketing firm Resolution Media. "These clients are slightly slower to engage, but when they do figure out what works for them, they have deep pockets to test and explore."
Spiegel added that Thursday's program will be an opportunity for his constituency to click with a new and lucrative market.
"By far most advertising dollars are placed offline," he said. "If we can highlight how those dollars can be made more effective through an integrated campaign, then we are doing our job of helping the community expand."
Brad Spirrison is a local technology reporter and president of MidwestBusiness.com.
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