Versaly Entertainment

In 2 months, Versaly will be 8 years old.  Wow!  What a dynamic roller-coaster ride we have been on.  We started before the first color wallpapers were available on the SonyEricsson T68; and we started before the first TruTone ringtones on Sprint’s CMX-based phones we sold.  Read a past blog on our history for more info.

I keep daily notes of everything; I have a contiguous set of notebooks dating back to the mid-1990’s.  I want to use this week’s blog to look back at years past.

2008 – Today we are highly regarded as a top mobile wallpaper provider and a top mobile video publisher and syndicator.  We are a top wallpaper supplier to Verizon, AT&T, T-Mobile, Jamster, ZED USA and Thumbplay .  We are launching new brands, video programs and personalization collections, including the Underground Sound, an indie alternative rock brand that will include streaming video programming, video clips and ringtones.  We also developed our Social Networking and Viral Marketing strategy and are executing on it.  Check out: www.myspace.com/ClubBrazilGirls, www.myspace.com/USound, www.myspace.com/Hollywoodi and www.myspace.com/SaborMovil.

2007 – Beginning of the year, we launched 3 video channels on 2 different networks.  We launched our own Fast Lane streaming video channel on Sprint.  We sold and successfully ran 5 in-stream mobile video ad campaigns within Fast Lane during the year.  We also launched channels for 2 partners - eBaum’s World on Sprint and Revver on Verizon Vcast.  Both required post-production and programming.  For eBaums, we hosted and streamed the video to Sprint handsets.  For Revver, we upload to Vcast’s server and provide technical support, which we are still doing today.  At the end of this year, we began building out our vast mobile syndication network.

2006 – With the success of Hollywood Insider on Sprint, we realized how important brands are in mobile, whether popular movie studio brands or self-created brands; so we started creating our own to target the core segments in the mobile content market.  These included Fast Lane, Club Brazil, Dream Destinations, Sabor Movil and others.  We signed a large number of content providers to build out our brands for our personalization business and video business.  We went slightly overboard in signing, and acquired too much.  Some weren’t happy but many are still partners today.

2005 – In March, we launched our first streaming mobile video channel, Hollywood Insider on Sprint.  That channel is still “on air” today!  We shutdown our D2C website and became a B2B provider for personalization.  At the end of this year, we created a new way to sell our content.  It was an industry-leading web-based format to make previewing, ordering, tracking, and delivering our products extremely easy for our customers.  Our online catalogs are still being used today, and still regarded as one of the best formats by our distribution partners!

2004 – Throughout this year, we signed up numerous branded and unbranded content providers; and signed additional distribution channels.  We launched the Meet the Parents and Meet the Fockers mobile campaign with multiple mobile products with NBC-Universal.  We solidified our “Mobile Brand Management” program, which was marketed to Hollywood studios and brands.  We still use it as an internal methodology today.  Just an overall busy year building the business and developing new products.

2003 – We got good traction with both our D2C and B2B personalization business and our business grew.  We released a Star Trek and Fear Factor BREW application for ringtones and wallpapers on Verizon; but within 12 months, we stopped due to the explosion of handsets which Verizon released during the period.  We moved to a larger office where we still are today and still producing the best mobile content in the industry!

2002 – We created our own D2C web site to sell mobile personalization products.  We opened distribution through Sprint, AT&T and Telus Mobility.  Our B2B distribution expanded into Europe and Japan.  We secured the Star Trek license from Viacom Consumer Products (Paramount Pictures), their first ever mobile license.  In addition, we secured the Fear Factor license from NBC-TV and Endemol USA, their first ever mobile license.

2001 – After a year of developing a multi-game platform, we realized early on how much more influx of capital was needed to successfully execute our business plan.  In 2001, investment in early-stage companies was not freely flowing.  So, at the end of the year, we started our transformation to a mobile media and entertainment company, which is still our charter today!

2000 – Matthew Feldman and Mike Davis met for the first time and started discussing and researching what is now Versaly Entertainment.

I am extremely happy and exited to announce the launch of Versaly’s own mobile video-on-demand destination at http://m.vmbc.tv, earlier this week.  Check it out from your mobile phone’s browser.

Versaly partnered with NEXAGE, a top mobile solutions provider, to design, develop and host the mobile video application.  Versaly will be programming the exciting and addictive video-on-demand line-up.  At launch, the programs include:

Club Brazil™ – sexy girls strutting their stuff! (non-nude)

Comedy Time – top comics giving you a personal stand-up show

Fear No Sports™ – high energy action sports, wipe-outs and stupid behavior

Hollywood Insider™ – movie previews, reviews and actor interviews

Laugh Out LOUD™ – sketch comedy and more great stand-up

RipeTV – branded content from a top web site

Underground Sound™ – Vmbc.tv’s first music video channel featuring Indie Rock bands

V Street™ – gritty urban multicultural lifestyle videoz

Versaly monitors and tracks performance.  Programming gets refreshed twice weekly and videos get moved around or removed, based on their performance, to optimize the viewing experience.  Entire programs may also change.  We expect to attract and retain a loyal viewing audience.

If you are a content creator or video producer, feel free to contact us for mobile programming opportunities.  If you are a brand, advertiser or media planner, please contact us for in-stream advertising opportunities.

We are not competing with our other distribution partners, including Zannel, Buzzwire, MSN, HandiTV Plus, Zumobi, JuiceCaster, Treemo and others.  Versaly is offering a limited amount of videos with direct access to only our videos.  Our distribution partners offer more Vmbc.tv videos and many other brands as well.  Please visit all our partners.

Note: Company names and program names mentioned herein may be trademarks, registered trademarks or copyrights of their respective owners.

Mobile Advertising.  Some feel those 2 words say it all.  I feel that is one of the most generic terms in the industry today.

In mobile advertising, there are WAP banner ads, text messaging campaigns (voting, polling, etc), in-game ads, pre-roll video ads, post-roll video ads, digital overlays, couponing and many more.

There are separate advertising agencies and media buyers for broadcast, broadband, out-of-home, games and others.  Mobile advertising is as diverse and complex as traditional advertising mediums, so then why is all of mobile advertising lumped into a single group, typically within the broadband/interactive group.  Mobile advertising should be split into focus areas.

WAP banner ads should be managed by web banner media buyers, but in-stream video ads should be given to the broadcast media buyers.  And of course, mobile games should be given to the console and online game media buyers.

Mobile advertising is certainly unique, and can be categorized as both in-home and out-of-home, both interactive and for branding only.

Park Avenue…the mainstream advertising industry…is not keeping up with the advances in society.  The 13-24 year old demographic is physically glued to their mobile phone, however, mobile advertising is currently narrowly defined as WAP banner ads and nothing more.  The percent of advertising dollars going to mobile is miniscule compared to the more established, but less effective traditional media outlets.

The opportunity for mobile in-stream video advertising is huge.  As with traditional media, combining multiple mobile ad mediums is extremely effective for an overall campaign.  I look forward to the day when the brands and the branding agencies finally discover…and embrace…mobile in-stream advertising.

PS:  I purposely did not mention the consumer…who would benefit greatly with the elimination of monthly fees.

You have heard it all before.  Gas prices over $4.00 per gallon.  Bread, milk, eggs and flour prices are surging in the past year at double-digit rates, according to the Labor Department. Milk is over $3.25 per gallon.  Escalating food costs present a greater problem than soaring oil prices for the national economy because the average household spends 2-3 times as much for food as for gasoline.

Where does that leave “entertainment” in the household budget?  Entertainment can include a night out at the movies, buying a DVD or CD, buying a ringtone or subscribing to a mobile video service.

Buying a DVD or going to the movies is a psychologically separate expense.  Money is taken out of one’s pocket and the event is mentally recorded.

Buying a ringtone, wallpaper or subscribing to a mobile video service is an incremental cost, not a separate transaction.  Psychologically, its part of one’s mobile phone bill.

Personally, my mobile phone bill runs between $93 and $98 per month.  It all depends on how many text messages I send and receive, if I call internationally or if I buy a new ringtone (yes, I do buy ringtones on occasion).  The monthly bill varies, but I feel it’s all the same…one bill with a bunch of details I rarely examine.

A few years back, I felt that ringtone purchases competed with CD and iTunes sales, but I feel differently now.  The incremental cost of a ringtone to the overall mobile phone bill has made ringtone (and other mobile content) purchases insensitive to the economy. One or two ringtone (or wallpaper) purchases do not substantially affect a phone bill.

Perhaps the economy is affecting a slump in entertainment spending.  I feel it’s a different reason.  I feel consumers are looking more closely at value received for a purchase…especially a purchase for entertainment.

I am hearing from Versaly’s distribution partners how sales have been down across the board.  Is this due to the economy?  I feel not.  I feel consumers are getting fed-up with poor purchase experiences, misleading “free” offers and bored with the same old content choices.  The mobile marketplace is maturing, the mobile consumer is getting more savvy and the electronic retailers are not keeping pace.  I am seeing the same content, the same shopping experience, the same marketing and the same pricing models.

Mobile video is an exciting new product…but most electronic retailers are not providing the right buying experience for that either.  It’s difficult to find, difficult to shop (browse content) and clunky to purchase and watch.  Artificially inflated monthly subscription fees…large enough to make one notice the increase on their mobile bill…is also stalling consumer adoption.  However, I feel consumers seek value.  A $15 monthly subscription fee is acceptable if the mobile video channel offers a lot of great content with frequent refreshes.  A $15 monthly subscription fee is unacceptable if availability is limited to TV reruns, news and weather.

The core mobile video user has grown up in the age of the Internet and is much more aligned to the Internet video audience, and not the TV prime time audience.  As such, mobile video services should take notice of the kind of videos offered on the web, how they are presented, how they are marketed and how they are sold…and offer more content and a user experience like that on mobile video services.  With that, the mobile video user will see value and continue to purchase the monthly subscriptions.

What is “Branded Video”?  My definition is that it’s simply a title applied to a series of videos.  Supposedly, the title (or brand name) is well-known and will provide a preconceived notion of what the video will contain…and thus, will increase the probability of a user watching it.  In addition, brands typically don’t create themselves, so branded content will come with some potential marketing power behind it.

I feel that is true up to a point.  I feel “Branded Video” may help viewer acquisition, but the shear fact of video being a brand falls way short in providing viewer retention and growth.

Programming, in my opinion, is the number one factor in viewer retention and viewership growth…regardless of branded or unbranded content.  Granted the content has to be good quality and consumers need to be aware of it, but let’s assume they are in order to directly compare branded to unbranded video.

On mobile, a well-programmed unbranded series of videos will outperform poorly-programmed branded video 100% of the time.

On TV, programming which shows are aired on what day-of-the-week and time slot is a huge factor on the success of a show.  It holds true on mobile also.

Versaly, and its Vmbc.tv mobile video distribution network, has been programming mobile video-on-demand channels for more than 3 years and always generates higher-than-average views than its competitors.

Programming includes quantity of videos available at any one time, number of channel refreshes per week, when the refreshes occur, amount of videos added and removed during a refresh, which videos are added and removed, order of the videos (both new and past week’s) within the channel, titles of the videos and other activities which Versaly actively does to drive viewer consumption of our videos within all our channels worldwide.

The top 3 genres of mobile video today are news, weather and sexy girls. Are these really genres which require branding?  Are these genres which benefit from branding?  Yes…to a point.

However, I feel the mobile viewer is a subset of the internet video junkie and is looking for types of videos which are not on television.  I just don’t see mobile video, or mobile TV, being an extension of television.  I see it being an extension on the internet.  Lots of UGC videos, music videos, and raw breaking news.  Re-runs of last nights TV shows are just not compelling enough for the mobile viewer to return over and over again.

For Unbranded Video…which I prefer to call “Original Video” is content that is compelling, without a preconceived notion…that is…until a viewer watches it, likes it, and wants to come back again and again to watch more and more.   Uh oh…that person has now established a preconceived notion of it…is it now “branded”?  Which reaffirms my position on how important programming is.

During the conference, someone asked me what I thought of it.  What I said to that person is what this week’s blog will cover.

I said, it all depends on 3 things.  It depends on: (i) where you come from, (ii) what you want to get out of it, and (iii) what you do at it.  These 3 things will determine your opinion of how good the conference is (or any industry conference).

In past years, as Versaly was growing, I focused on content acquisition and carrier distribution, I got less out of the panel sessions and more out of the networking events.  The sessions were filled with speakers from either large media companies or from my competitors – all bashing the carriers.  I rarely could sit through an entire panel session.  However, this conference is well attended, and the networking events are packed with potential partners.

This year, I had a slightly different agenda.  Yes, I was a guest speaker again and, yes, I took advantage of the great networking.  However, this year I really wanted to expand my knowledge of Social Networking.  I have heard a lot about it from a user point of view, but I wanted to learn more from a business perspective.

I had a clear understanding of what I wanted to get out of the event, and thus, I thought it was a great event!

I attended 5 panel sessions…and sat through them in their entirety.  They were information and interesting.  Some had positive outlooks and some were negative, but all helped build my understanding on the subject.  I feel I have much better information now to make decisions about my business and the directions we will take as they relate to social networking.  My vocabulary within social networking has expanded and I am now familiar with the top companies in the social networking industry, and their strengths and weaknesses.

If you are in the digital media industry, this is a must-attend conference.  This conference covers digital media for broadcast, broadband, mobile and all other distribution avenues, plus advertising and research on all these mediums.  Digital Hollywood is held twice annually.  Go to http://www.digitalhollywood.com for more information, and send me an invite if you’d like to meet with me.

I have been attending and speaking at industry events throughout my managerial career, spanning 12+ years now.  In the digital media industry, Digital Hollywood is one of my favorites.  These conferences are somewhat on the small size, but very well-run and with an A+ attendee list.

The next Digital Hollywood conference is next week, in Hollywood, CA.  For more info, see http://www.digitalhollywood.com/LASpring08Agenda.html.

I am a guest panelist on the “Movies, TV and Video for Mobile - Entertainment & Information Programming Jumpstarts the Revolution” session.  For more info, see http://www.digitalhollywood.com/08DHSpring/DHSp08Tues16.html.

Although I have spoken on panels with similar titles in the past, I always bring new information gathered from Vmbc.tv mobile video programming experiences.

Video is consumed on mobile and on the web basically from 2 types of app’s.  One is a plain video portal and the other is a social networking site.  Whether on-deck, off-deck, web, mobile or whatever…tons of people watch videos on video portals and social networking sites.

I discussed viewer acquisition and viewer retention in one of my past blogs.  I feel that the opportunity to market a video channel on a social networking site in order to drive viewership has a clear set of tasks.

(1)   Create videos the mass audience wants to watch (or large niche audiences)

(2)   Create videos with a good production quality…both audio and video

(3)   Create enough videos to capture a audience over time

(4)   Create a huge friends network by actively inviting and accepting invitations

a.      Do this on multiple sites

b.      Do this with multiple profiles

Item 4 above can be as costly and time consuming as the first 3, but if done well…a video channel can receive top viewership position.

How that is done…well…that is the “secret sauce” J.

The session agenda includes the challenges of creating and producing video form mobile.  I feel the challenge is more about reaching the audience and building a strong viewership.

Once there is a large following on a social networking site, the video channel can migrate to a plain video portal, and continue to attract and build a large audience.

A criteria for the on-deck video portals, like Verizon’s Vcast and Sprint’s Media Player, is for the video channel to bring its own audience and marketing plans.  Social networking is absolutely the path to this success.  Social networking is absolutely a viable marketing strategy for the always-connected mobile generation. Many of you already know this…the rest of you…take note.

Continuing on my main theme that mobile is not a product that differs from any other media device…is there a consumer preference for a mobile video format?

As a quick background, video-on-demand basically means a video plays when I want it to play.  Instant gratification…oh yea!  Linear means a video is playing and whenever I “join” the broadcast, I watch whatever is being played at that time.  Watch what I want, when I want…or watch what someone else tells me to watch…hummm.

On TV there is both linear and VOD.  Linear includes half-hour episodes, 2-hour movies and everything in between.  TV also offers VOD that includes free shows and pay-per-view movies.  Add a DVR (e.g. TiVo) to the system, and now linear programming is converted to VOD.  However, all formats are watched and are welcome in our living rooms.

Movie theaters show pricey movies at designated times…not exactly VOD or linear.

The Web…almost entirely free, almost entirely short-form and almost entirely VOD.

All these entertainment outlets have their own model…and are accepted for what they offer.  Plus, the medium has sort of helped define the content format.

Now comes mobile, a new medium that complements all of them and offers a combination of all of them.  But since mobile phones have small screens and are so portable…”what” and “how” do people want to consume video on their phones?

Answer…all of the above.  Anything that is entertaining that can hold a viewer’s attention…whether in their home, office, lunch hour, or weekend excursion…will work on mobile.  I understand there will be a single dominant format…which our 3+ years of experience shows is short-form VOD…but all formats have a place and I feel they all can have a certain level of success.  Mobile is flexible enough to handle multiple formats…and there is an audience to digest the different formats.

Just like television now offers a variety of options, including a large number of channels for every interest…so should mobile.  There will never be a single solution to satisfy any majority in the US…and the wireless carriers should see this and offer the variety that consumers currently enjoy on their TV and Web-connected computer.  When that happens…at a price point that is acceptable…mobile video will skyrocket!

I originally scheduled a different subject for this week, but I am so annoyed at the various reports that claim the mobile video market is “slower adoption than expected.”

The latest was just in MocoNews.net (April 14, 2008 ) “Nokia Concedes Mobile TV Is Slow-Going, ‘In Turmoil’”

As I have mentioned before…mobile is not some new-fangled product that defies basic economics and retail principles from the past 100+ years.  “If you build it, they will come” just doesn’t work.  Companies need to offer products that consumers want.

So…who gets blamed for a poor mobile video market?  Reports tend to blame the consumers…saying they aren’t interested in mobile video.  Of course they are!  The fact is…consumers aren’t interested in the programming that is available in mobile video!  Reports seem to focus on “the next killer app.”  Mobile video is a “killer app”…it is just being offered in such a poor manner.

Reports should highlight key factors in successful and unsuccessful mobile video offerings.

• On-deck vs. Off-deck?
• VOD vs. Linear?
• Long-form vs. Short-form?
• Branded vs. UGC vs. Original content?
• Featured placement vs. general browsing?
• Overall cost of entry vs. Perceived value in return?
• Free ad-funded vs. Paid subscriptions?
• WAP ads vs. Video ads?
• Pre-rolls vs. Mid-rolls vs. Overlays?
• Refresh frequency?
• Quantity of video?
• Social networking features (notifications and viral forwarding)?
• Content provider revenue models?
• Marketing campaigns to drive viewer acquisition?

These are all important factors in the success of mobile video…and topics I have opinions on and will be covering in the near future.

Versaly has over 3 years of experience in operating mobile video channels and analyzing results to support our position on these factors.

So, last week I discussed how carrier video decks may be easier to initially find, but since they don’t offer great programming line-ups, viewers are searching and finding off-deck video sites.

Zannel. MOSH, MyCorner, MyWaves, JuiceCaster, HandiTV to name a few.

There are 2 main principles in operating a mobile video-on-demand (MVOD) network or any mass media distribution – user acquisition and user retention.  (The term “user” can be replaced with “subscriber.”)

Once a Consumer finds a channel they like, it is imperative to keep them coming back…which is user retention…and that requires active programming.  When a consumer returns to a channel, they want to see something interesting and new.  They want the content to reinforce the reason they liked it initially and caused them to return.  I guess you can call it “addictive.”

Consumers are demanding.  They want “new and interesting” each and every time they visit a site.  Some may be understanding and give a channel a 2^nd or 3^rd chance…but once you loose a consumer…they are lost for good…so you better have a good programming schedule to keep them.  The entire value of a off-deck site is the quantity of users visiting and returning.  Once you loose your consumer-base, your product is finished.

Programming includes content subject matter (branded and unbranded), content production value, variety, quantity (depth), and refresh rate.

What we have found as a good refresh rate in mobile is twice weekly…a week day and weekend version of a program.  About 30% new content for each refresh and a resort of older content based on popularity…meaning…remove the low performers, keep the top performers.

Most importantly, set proper expectations.  Respect your consumer and they will return the favor ten-fold.