Rodrigo A. Sepúlveda Schulz

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Discussing the impact of real-time web at Groupama's GTWeb 5/5/09

Discussing the impact of real-time web at Groupama's GTWeb 5/5/09, originally uploaded by rsepulveda.

Interviewed by VNUnet.fr at LeWeb'08; also on hulu.com vs. Youtube

LeWeb08 - Rodrigo Sepulveda - Vpod
envoyé par tennuv92

A few announcements in this video to the press...

Read the article here, thanks to Philippe Guerrier for the chat.

By the way, Comscore had released new numbers for the US the previous day, and I had had no time to review them. So here are some interesting updated data for OCTOBER 2008:

• "U.S. Internet users viewed 13.5 billion online videos during the month, representing an increase of 45 percent versus year ago." > that' an 18,5% increase over the previous number we had for July, 3 months ago, at 11,5b
• "In October, Google Sites once again ranked as the top U.S. video property with nearly 5.4 billion videos viewed (representing a 40 percent share of all videos viewed), with YouTube.com accounting for more than 98 percent of all videos viewed at the property." > that's almost 5,3b videos viewed for Youtube in the USA (% of the rest of the word ???)
• "Hulu, a joint venture of NBC and Fox featuring full-length broadcast TV programs, ranked sixth with 235 million videos viewed (1.7 percent)" > that's about 4,5% of the traffic of Youtube (again, US numbers for both)
• "More than 147 million U.S. Internet users watched an average of 92 videos per viewer in October." > this number is going up, about 5m more in 3 months, getting the reach in the USA from 75% to 77%. The number of videos viewed is differnet per site, Youtube only captures about 53 videos per person, whereas hulu.com gets about 10 a month.
• "More than 80 percent of the      18-34 year olds watched online video, higher than any other age segment.      The average 18-34 year old online video viewer watched 4.8 hours of video      during the month, also ranking above all other age segments." > this is great, because this is the age segment many advertisers want to target them, they are prescribers, have disposable income, more internet savvy...
• BUT THE MORE INTERESTING FACTOR IS HERE : hulu.com has a reach now in the USA of 24m, vs Youtube of a reach of 100m. 24%... Average video length (no number for youtube specifically, anyone has it ?), is 3 min. average length on hulu is 12 min. So youtube streams 3min x 99,5m people x 53,2 videos / 60 = 265m hours / month. Hulu streams 9,8min x 24m people x 9,8 videos / 60 = 45,5m hours/ month. That's 17% of Youtube. Now in previous reports, Youtube only monetizes 4-6% of its inventory. Let's say 5%. Hulu 100%. hence Hulu can monetize 45,5m hours. Youtube can monetize 5%*265 = 13m hours... That's 3x less than Hulu for a site that has 4,5% of its traffic... Latest numbers I've read (maybe totally wrong) is that youtube is doing $100m this year, and hulu.com reports doing $70m... not bad.
• If my maths are not wrong, monetizing 5% and 100% respectively, at $70m and $100m revenue respectively, traffic at 245m and 5,2b video views respectively, and assuming 100% of the inventory is monetized with CPMs, hulu.com is reaching almost a $300 CPM while youtube is reaching a $1 CPM... doh.
• To be fair, if you look at costs, hulu.com should have only 17% of costs of youtube in terms of streamed hours. Actually that's true for bandwidth, CDNs, probably not really for servers, they must have a large installed base also to handle the load. All in all, assuming a random scaling factor, let's say hulu.com has costs that are x2 or x3 more than youtube (the google effect behind). Hence 34% to 51% of youtube's costs. With 70% of revenues of youtube, I think I like hulu's model so much more ! including the UI of course.
• Finally, there's a hiccup in this discussion. Although youtube is doing rev-share with some of its content publishers, hulu probably has to do rev-share with rights-holders as well. And in the movie business (including TV series), there's a thing called MINIMUM GUARANTEES, that you pay usually upfront to get the right to broadcast a catalogue. This happens so that there's a minimum income for the studio, that it justifies fixed costs, etc. In addition, MGs tend to be charged by territory, hence even more expensive if you want a global footprint for your service (hulu is only in the USA for the moment, so get a VPN ;). This challenges clearly the COGS structure of a hulu.com, and as a matter of fact any new entrant who'd like to compete with hulu. They'd face the same issues.

Final thoughts :

• there's a B-model for online video properties that can monetize 100% or nearly 100% of their inventory
• acquiring rights to content is a challenge if MG are involved. The industry has to move to a pure OPEX model, but this challenges somehow the media channels release chronology. (more on this another day)
• great quality (content encoding quality, content type, user interface), command for longer viewing experience
• longer viewing experience allow for new video ad formats (overlays, mid-rolls), hence increased revenue streams.

Anyone else has more numbers ? different thoughts ?

half a second on french tv M6 last night

There was a section on the cybermonday.fr event last night on french TV. And I spotted a nice red duffle coat ;)
You may watch the whole event again on www.M6replay.fr. They aired the moment when we, as sponsors, we took the stage. For more details, the Mry & Rodrigo Show 63 of course.

My presentation at Monaco Media Forum 3 weeks ago is online

My part starts at about minute 15 below ;) (via MMF archive on youtube)

My panel at FICOD 2 weeks ago is online

The direct link is a bit hard to find. Go to the video section of the site, click below on "ver todos los videos", day "27", then session on webtv. It's a bit over an hour, really interesting. I'll update notes on what other folks were saying as well ;) I start at about minute 26 for about 10 minutes then questions ...

Xavier Niel, founder of Iliad / free.fr joins vpod.tv Advisory Board

Half Moon Bay, CA - July 21st 2008, Fortune Brainstorm Tech conference

My long-time business partner, Ivan Communod, and I started working on the original concept of vpod.tv in September 2005, when we realized the growing importance of UGC + growth of fixed and mobile bandwidth + development of video-enabled devices. We were frustrated that we couldn't publish videos easily online. We tell the story here.

After developping a first prototype, we went fund-raising, and closed a 4 million euros Series A with Frédéric Humbert, GP at Innovacom, a few days after we incorporated the company in France on May 15th, 2006, slightly over 2 years ago. Along the way, a select group of business angels have joined us as shareholders, including Internet entrepreneurs Martin Varsavsky and Loïc Le Meur.

We went into exactly one year of product development based on our original prototype, changing our business model from our original B2C concept into a pure B2B SaaS play about 6 months later (end of 2006) when we realized it was a B2C market game over when YouTube got acquired. We opened a first beta version of our v1.0 to the general public both on the web, mobile and on a number of different products. You can see our first product on http://studio.vpod.tv.

On May 15th 2007, we opened up for business, exactly 365 days after incorporating. We are glad to report that we have now over 50 live customer refererences in 4 sectors: global brands, media groups, telcos and e-commerce services.

By May 15th 2008, we knew that we had a proof of concept with very solid business cases in each of our markets and that is was time to "move on to the next level". We have hence been massively preparing for international expansion, and have completely re-written our platform, packed with new features (support for over 200 file formats, carrier-grade infrastructure, advanced backoffice tools for real-time configuration + statistics + moderation, etc.). Version 2.0 should launch in September, as we already have a nice number of very high-profile customers running it on a day-to-day basis.

As any entrepreneur knows, the road to success and rapid expansion is a very bumpy one. Fortunately for us, many others have already traveled that road and can help us make the right decisions and avoid the pitfalls of rapid growth. We have therefore reached out to the folks we feel can best help us grow our company, and who share a deep passion for entrepreneurship, technology and media.

Ivan and I are delighted to announce our new advisory board member, and new investor, M. Xavier Niel, founder and Chief Strategy Officer of the Iliad group, better known in France under the brand free.fr (see Wikipedia).

Xavier is an exception in France: he's a fantastically gifted entrepreneur, having totally disrupted the French telecom market and in my opinion, the man that made France a global Broadband leader. To me, he is totally focused on key values that we love to love, such as among other things: an incredible charisma, a commitment to enhanced customer value proposition, a deep focus on cost and margin control, a spirit of continuous innovative services and a visceral competitive nature. His personality was best captured last year in a lengthy profile by my friend journalist Om Malik.

A very large part of our business at vpod.tv is managing our technology infrastructure: bandwidth, storage, servers, SLA monitoring, growth management, etc. an area managed by Ivan on the technology side, and by me on the business side.

Xavier was a natural fit and his role will be, along with a mentoring role, to help us keep our edge on the technology side, hence helping our customers benefit from this expertise. We are honored and excited to have him on board.

Great interview of me on Tiburon TV

I had almost forgotten about this interview, taped at SIME'07 in Stockholm last November. Viktoria (the Journalist for Tiburon TV - "hungry for business") had the whole theater just four ourselves at the end of the conference.

Here I talk about our business at vpod.tv and about entrepreneurship. Thanks Viktoria for a nice time !

Facebook has extended that great feature they had on pictures to videos: I got pinged in my email inbox about this video because they tagged me in the video.

Hey, I also appear in this little clip at LIFT conference (I had never noticed it before on Facebook video).

Nice article in El Pais

Really nice article about vpod.tv in El Pais, the leading spanish newspaper. Thanks for the article published in January (I had forgotten to blog about it). Ivan did a good job explaining our work.

And I like being the last words of the article :)

vpod.tv is 2 years old

vpod.tv is 2 years old, originally uploaded by rsepulveda.

Yesterday, my company, Video Publishing On Demand SA (also known as vpod.tv) turned 2 years old.

I had almost forgotten about the date, and realized it close to midnight. Hence champaign at the office was today, instead of yesterday. We did a nice video conference session with our team in Madrid and celebrated quickly together (vpod.tv in Spain turns 2 on July 1st).

I have to say it's an impressive moment.

I still remember the days back in September 2005, when after leaving my previous engagement, I was wondering what to do next. I remember sitting on my small former home desk with a small laptop screen. My first decision was to order a new big desk with 2 big screens and a new desktop computer, so that I could think better and surf the web more comfortably:

became

After surfing for a few weeks, I got convinced that there was a market for online video, and that it was hard (other well-known services today where in their infancy back then) to publish one's own content, that broadband was going to be big, that video-enabled devices where everywhere and booming, and that people were really getting into publishing self-produced content (think back then about blogs and pictures). Those trends led me to hire a first team member and build a prototype. At the same time, I asked my partner from RISC Partners, Ivan Communod, to join us with his team in Spain as he was working on core video technologies.

(A few pix of us 2 running around the world:Cannes, Menorca, Helsinki, Budapest, San Francisco, Las Vegas)

At the ETRE'05 conference in October 05, we had a simple prototype that allowed us to upload a video, and we would get back an email with the embed code of the video. That evolved into a full-blown prototype by December 05 that allowed us to upload by webcam and email, and publish with APIs to blogs.

With that in hand, we started fund-raising in January 2006, after some hesitation about going the business angel route. By then we were a small team of 10 people in Paris and Madrid.

We closed our 4 million euros series A with Frédéric Humbert, GP at Innovacom 5, who understood the potential of the online video market and our vision of facilitating the creation of personal TV channels. We incorporated on May 15, 2006 in Paris, and got our funding 4 days later.

We were back then working in the corner of the offices of Cashstore.fr, thanks to the welcoming spirit of fellow entrepreneur Catherine Barba, who hosted us for 6 months in Paris. Many thanks to her. Eventually, we got our own offices in the same building on the 1st floor where we are today. Along the way, 2 well-known entrepreneurs joined our team of shareholders as business angels after the VC round and have provided us with great advice since.

What happened next was one year of R&D and promotion of our service: our team worked hard into building the great  software platfrom that we have today (upload by any means you like), and build all of the social features of the tool. At the same time we went on a great tour of events in Europe and in the US, presenting our vision and winning great awards such as Supernova 2006 top 12 innovator, Red Herring 100 Europe, Innovate Europe, Mobile Peer Awards, etc.

On our 1 year anniversary, we opened up for business after 1 year of R&D. We had to move now from evangelizing the market to signing deals and contracts. My blog started to suffer as I had no more time to write about it.

One year later, if I look back at the work we've done as a team in 12 months, it's pretty amazing:

- we now have customers in all of our 4 main target markets : brands (Fanta, L'Oréal, Danone, BNP Paribas, Steelcase...), Government (French Minsitry of Agriculture, NGOs, Cities), Media (20minutes, 01net, SVMmac, Marianne2, France24...), mobile carriers (SFR), ecommerce site (Priceminister), and many more to come that are about to go live soon !

- our team has grown and has been adjusting as we've been focusing more and more on the B2B market (a shift we took almost immediately after the Youtube acquisition in october 06). A big thanks to all of them for all their work.

- we now have our own carrier-grade data center, with great capacity to adjust for our new customers.

- we've built a completely new software platform (called v2) that manages any kind of multimedia file (video, picture, music), on any connected screen (TV, mobile, PMP, web), with a new back-office to support carrier grade issues such as moderation, configuration and advanced stats.

So what's next for our year 3 ?

- Our roadmap is now full for the next 18 months, with gazillion new features we've collected from our customers to further enhance our product.

- we're moving 100% towards a B2B service provider. Tune in for more details  in the upcoming weeks.

- we're delighted to start bringing in more senior people to the team, with lots of experience. We'll be announcing them soon.

Final reflections as an entrepreneur:

- I'm still surprised and excited that customers use a product we dreamt of on a piece of paper 2,5 years ago; that our tools show up on the homepages of very important brands and on global sites

- and I really enjoy meeting candidates who believe that what we're doing is cool and funky, and that they'd like to join the team.

- there's no real reason why an entrepreneur can't successfully implement a vision and an idea, if he tries hard enough. With the help of the right people, and lots of energy, so much can be achieved !

What a ride !