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Yonatan Sela 12 Apr 08
At first it was only whispered by some, later on it has been more widely discussed, but only in the past few weeks it has become official – people are getting bored of the big social networks. Not long ago, around the time of the magnificent $15bn valuation Microsoft set for Facebook, the social networks hype was at its peak. Nevertheless, analytics of the past few months show a slowing and for some networks even declining growth in users (e.g. after peaking at October 2007, MySpace - the largest social network at the time, saw a decline of 3 million unique visitors in the US. These figures and more are presented in Creative Capital). But the really bad news for the social networks are the numbers showing a substantial, sequential drop in user engagement in the giant social networks. The frequency and duration of visits in these sites keeps on free falling: for instance the time American users spent on Bebo.com has been cut in half in the past four months. Facebook is also experiencing a consecutive drop in visits per user and the number of pages viewed (More info here). This is extremely concerning data for anyone who’s interested in monetizing these free services. It would be wrong to say the social networks are rolling downhill, but it’s becoming clearer that the users of social networks that carry no “useful information” or premium content are likely to spend less and less time using it after the initial enthusiasm. I believe social networks will remain very powerful, but they can stay more attractive over time if they revolve around some sort of content. While the numbers are dropping at the big social networks, Google’s Youtube has doubled its unique visitors within a year (going up to over 61 million users) and Yahoo’s Flicker has shown a growth of 88% in the number of users (now over 14 million). In spite of the essential difference between Youtube and facebook – one revolves around video content, while the other revolves around the interactive-social experience it provides, both are extremely powerful and attractive for users. Here at TVinci we’ve realized the potential infolded in combining these two experiences quite some time ago… It is therefore not surprising users gradually add more videos to their profiles. Our view has long ago been that impersonal video content alone is simply not enough for contemporary users. Lately, we see that over time, neither is the interactive social experience alone (as the social network fatigue shows). Accordingly, we have been leading a paradigm shift in the world of premium content: content is no longer the sole king, Viewing Experience is the new king. We believe that the key to successful Internet TV is providing a superb viewing experience offering innovative ways of discovering new premium content and featuring social, personalization and interactive capabilities. Moreover, we believe that enriching video content allows video content owners to increase viewers’ engagement with the video content in their sites (both frequency and length of visits), thereby helping them to maximize monetization of their assets. We’ve started working on the MTV Israel website in March 2007 with this holistic approach toward content experience in mind: on the basis of Tvinci’s media management platform (TVM), the site uses three different kinds of tailor-suited video players and a social network that revolves around MTV’s premium video content. The ability to comment, rate and share premium content (as well as the ability to upload and edit UGC) within a social network that has been created for that purpose has evidently drawn more users for more frequent, longer visits. Viewers with similar taste in music/other video content are more likely to become friends on site, and discover new content through each other – both result in longer engagement with the content and other parts of the site like the social network and the magazine. Users in the leading Israeli websites powered by our platform watch an average of nearly 7 videos per visit – an increase of nearly 400% since the implementation of the platform. Users are more adaptive to new templates, and inevitably get bored faster. They are therefore more demanding. It’s the combination of quality content with a social, interactive viewing experience that’ll keep them coming and staying longer on site. There are many innovative efforts to improve revenue generation from online video (as well as from Facebook), but they’ll be worthwhile only if there are enough people, staying long enough in order to watch it. I hope we’ll keep foreseeing the viewing trends on our soon upcoming VOD initiative, designed in light of these ideas and developed in cooperation with NDS (scheduled to launch on October 2008).
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