In September 2017, Oovvuu keynoted at the International News Media Association’s Media Vikings Week in Oslo, Norway, before a select audience of the world’s media CEOs. These are the highlights from that presentation.
The free secret to making video profitable
Breaking news is like cold fusion. Perpetual, free, vast and popular. Nothing stops it. Not weather, not war, not politics or financial meltdowns, not disease nor famine. In fact, the opposite, they drive it. It is endless, dynamic and self-replenishing – and that’s why Oovvuu mines it.
Our company’s mission is to improve the way news is reported by using artificial intelligence to source video from the most trusted sources and stream it to millions of interested people, and in the process combat the scourge of fake news. And nothing stimulates the creation of premium factual video more than breaking news.
Our opportunity has been made possible by an explosion in news consumption, soaring video viewing and the arrival of practical, affordable AI.
Now, if a mine collapses in Venezuela, or a jet ditches in the Hudson, Oovvuu can source a quality video and embed it in a matching news article anywhere in the blink of an eye.
We believe this will be transformational in creating a video-led news of the future and replacing the flat words and pictures of the past.
That’s a big vision. So how did we get here?
…and the world was reeling from the global financial crisis. In Australia, media company Fairfax, publisher of The Sydney Morning Herald, was innovating strongly in video. It had 22 producers creating 1,000 news clips a month. Half of all online Australians were watching and it was the envy of its rivals. But success was costly. Losses were in the millions, and pressure was mounting. Into the maelstrom, Fairfax hired some of the Oovvuu team to get its head above water.
Analysis soon revealed that 80% of Fairfax’s video revenue was coming from just 30% of the videos it published. Niche, vanity projects were soaking up unjustifiable sums while the real money was being made from news video prompted by breaking news.
That became the focus.
By the time BP’s Deepwater Horizon oil rig exploded in the Gulf of Mexico, the change in focus had reigned in costs and Fairfax video was at break-even for the first time, but a new challenge was emerging.
Video’s soaring popularity had caused a glut of advertising inventory, and commoditisation was leading ad agencies to demand publishers drop ad prices. With the video budget at break even, that would put the business back into loss.
What was to be done?
Before I joined, I had inserted an unusual clause into my contract. It was that once short form video was at break even, I could test a niggling hypothesis: If millions watched a short video with one pre-roll ad, maybe many of them would also watch a longer video, even if it had multiple ads.
As a journalist, my instinct told me that people would invest their time if the quality was good enough, and publishing full documentaries would enable Fairfax to tell the biggest new stories in greater and unprecedented depth.
To Fairfax’s credit, they made good on the deal and soon after we launched a long form video hub called smh.tv (named after Sydney Morning Herald).
By the time war broke out in Syria, we had helped Fairfax become the first news media website in the world to offer a video on demand network.
Making shows of this quality was beyond us, so we set about acquiring them from broadcasters. Over a roller-coaster three years, we signed 147 rights deals with providers including the ABC, BBC, EndemolShine, Fremantle, the SBS, Vice and more.
We rapidly expanded the network to 2,000 programs and delivered 60 channels of shows over a dozen devices including mobiles, tablets and connected TVs. Data poured in and we began to gain amazing insights into our audience.
- They watched an average of 3.2 videos a month
- Even at work, they would watch for 11 minutes on a desktop. At lunchtime, viewing rose on tablet and viewing duration lengthened to 16 minutes. At home, it was 23 minutes for viewers on a connected TV
- Longest viewing durations were in parenting, mini series and military history, and
- Viewing was three minutes longer if the video prominently featured CGI
Yet one thing remained constant; the most viewing and the most money was derived from factual, documentary and current affairs programming, fed by the constant cycle of breaking news.
Soon, smh.tv was generating seven figures in advertising revenue but most critically, it was profitable. While long form represented only 20% of total viewing, it delivered 100% of the profits. Short form only broke even. We had the model and it was time to scale.
A year later, as President Barack Obama was beginning his second term in office, the service had grown to be delivering 2,000 shows from 10 global broadcasters including the BBC and Vice and more than 50,000 people were watching shows every month.
By the time Prince George was welcomed into the world, the service had 3,000 shows from 75 broadcasters and had spawned 24 genres, including a popular parenting channel. There were now more than 150,000 viewers.
By the time terror came to the streets of Sydney, Fairfax, in common with it peers, was feeling a financial pinch. It was painfully obvious smh.tv had become a distraction as its parent fought for existence. It was too small to look like a saviour and too demanding for resources in straightened times. Like a troublesome teen, it was time to leave home.
That was the trigger for Oovvuu. The smh.tv team quit and reconvened, this time as a start-up. We went back to the drawing board with our vision and set out to scale.
Soon, we had expanded our rights deals, adding global broadcasters Al Jazeera, ITV, and VPRO and many others to our content roster. We then signed News Corporation as our foundation customer – gaining access to the nine million daily viewers of its flagship www.news.com.au
This time we would try something new. We would embed shows directly into articles. The logic was that more people will watch videos in situ than if they have to click to watch elsewhere.
An editor began embedding relevant videos into breaking news articles and take up was swift. Within six months, News was on course to match Fairfax’s earnings, which had taken four years to grow.
In the process, Oovvuu helped News Corp become the first online news media outlet in the world to enhance its article pages with long form video on an industrial scale; our second world first.
Millions of viewers, interested in hundreds of thousands of topics, were watching thousands of videos daily in hundreds of articles, delivering tens of millions of ads and and every viewer interaction was providing deeper insights. Fascinatingly, viewing duration within articles remained 11 minutes for desktop viewers.
The pivot to embedding videos into articles had led to the number of viewers soaring from 250,000 a month to near nine million. More than 5,000 shows were now available via the platform with 144 providers across 68 separate genres, and revenue was on a tear.
Who would have guessed that the most profitable videos of the year would be long form shows about global warming (see the BBC’s documentary embedded in the foot of this article), prostitution, methamphetamine abuse, 9/11, shark attacks, serial killers and MH370 – and that breaking news would be the common foundation behind them all?
But there was one discovery in mid-2016 which showed us the opportunity to scale and led us down a whole new path.
News Corp publishes roughly 2,000 articles and article updates every hour. An editor could embed 40 videos into articles per day but our data showed that as many as 500 videos and articles were available for matching – 12.5 times as many.
We began crunching code to find a cheap, efficient solution to do the matching, and as we delved deeper into the challenge, we began to create an AI. We called her Eureka.
What Oovvuu had built was revolutionary and global in impact and relevance. We could now deliver any video to any article, anywhere, without any staff costs in less than a second.
This was a billion dollar global service, and soon, it attracted the attention of IBM, who arrived with funding and support. They gave us access to the Watson supercomputer and now Eureka is aware of 750,000 articles every hour which it can match to videos.
For the first time in history, our AI is enabling news articles and videos to be aware of each other. They attract each other. They have become magnetic.
That lit the blue touch paper.
In late 2016, Amazon approached us and added Oovvuu to their Activate program alongside Airbnb and Slack. They provided more funding and support to enable us to expand our use of the cloud for storage, distribution and data.
The biggest news story of the year is President Trump and Oovvuu is going global. Breaking news has never been so busy, or video production so active and vibrant.
Shortly, we will notch our third world first when our next customer launches a fully-AI-driven video service. Eureka will ingest all their video and add more from our global broadcast partners. Eureka will analyse their breaking news stories as they are being written and recommend the best videos to embed in real-time.
Our expectation is that this will increase ad inventory 13.5-fold while keeping costs to cents, instead of millions.
It’s mind-blowingly powerful yet surprisingly cheap: Free breaking news generates the interest and the AI does the heavy-lifting.
That means if a mine does collapse in Venezuela, or any one of a million other stories every year, our customers can be confident that Oovvuu’s technology will find them a relevant world-class video and embed it in their news article almost instantly.
And better still, it will generate them a profit.
Oovvuu fundamentally believes in four core truths; that people want video, the broadcasters want distribution, publishers need video and advertisers want brand safety and engagement at scale, and there is nothing more brand safe than a BBC video in the New York Times.
The world’s broadcasters have provided $250 million worth of programming to Oovvuu to distribute to the world’s best news media outlets to spark this new economy, one which IBM has valued at $105 billion by 2019.
If these four things are true, then the market is primed for a new era, where news-telling is led by the best video. That in turn provides broadcasters and media with the opportunity to satisfy billions of consumers and enables Oovvuu to repatriate billions of advertising dollars from Facebook and Google back to the journalists and broadcasters who make the content.