Mr. Jaschke, In the course of digitisation, many news media and corporate publishers are constantly looking for alternative business models. Why should they invest of all mediums in video?
Michael Jaschke: Time is pretty much the scarcest resource in today’s fast-spinning world. This is why video is everywhere – with modern technology allowing for ubiquitous distribution, people consume it wherever they are. Who would read a cookbook today if they can watch a Michelin-starred chef cook the exact recipe they want? Traditionally, though, building a serious video business was prohibitively expensive. This was related not only to the technical infrastructure for both video delivery and advertising but also to the high licensing cost of premium content.
How could publishers and news media make money with videos?
Revenue can and will only be generated by advertising. The advertising industry will have to take better care of the user experience in the long run, but we do believe that user-friendly advertising is the core in every online business model.
The key to overcoming the shortcomings of the traditional model is utilising a SaaS platform solving the technical challenges while at the same time supplying the content needed to build a video business. glomex is such a neutral, web-based platform. Since using the marketplace comes with no cost and no strings attached, it is not even an investment for publishers or producers – instead, they get access to premium content and premium reach respectively, as well as video infrastructure and advertising revenue. This goes for publishing houses looking for new business models as well as for any other company that runs a website for profit.
As to the content producer or content owner, as we call them – we give them a wider array of publishers and better monetisation options, so higher production costs have a better and more predictable chance of actually paying off.
However, some market experts say it is difficult to monetise video, because video advertising is annoying for the consumer. For example, if you have thirty seconds to get actual news you don’t want to spend that time with advertising…
We’re convinced that the advertising industry needs to adopt its ads to create the best possible ad experience for the end user. Hence, we’re developing new ad delivery mechanisms that allow users more control over their ad viewing experience while still delivering a full brand message. We need to create better ads by offering more contextual targeting capabilities, skippable ad formats and overall a better ratio of advertising to video length. We are focused on user session monetisation – not single video monetisation – and on delivering a holistically positive ad and a content experience that keeps users engaged to watch more.
You aggregate and measure millions of video views in a very diverse publisher network, and you also possess vital data intelligence on the performance of videos. Which video format is the most popular one for news consumption – in terms of length and special topics – and which reduces production costs?
Entertainment and lifestyle news together with sports and docutainment are among the most viewed formats. They’re also more suitable to the advertising industry than other more serious news as brands are notoriously weary not to appear in conjunction with “bad” news. The optimum length of a video clip is under 2 minutes – it’s long enough to tell a story and short enough to match the ever-decreasing attention span of today’s mobile audience.
According to the Digital News Report 2017 by the Reuters Institute, across all markets over two-thirds (71%) say they mostly consume news in text. What does this mean for news media?
Our experience shows that publishers have a big need for content beyond traditional news. We deliver content that has great information and entertainment value and is well accepted by publishers to complement their daily news feeds. A few months ago, we launched a content plugin that allows publishers to subscribe to a video feed that is managed by our professional team of video editors. This allows publishers to enter the video business without building up any new skills in their own team. The content plugin is embedded in their website and the content is updated by our team several times a day to always deliver the most relevant and attractive videos to the publishers’ websites.
Google, Facebook and Co. benefit from good content of the publishing houses. But can videos based on quality journalism be distributed profitably via social media platforms and other channels?
The industry urgently needs more democracy than the duopoly of YouTube and Facebook has to offer. Currently, the two giants dictate prices and revenue shares at will. But there is a huge potential of video views beyond Facebook and YouTube – on millions of websites that are highly relevant to their users and edited with great care and journalistic know-how. This is where a content owner would want his skilfully produced content to play – and this is also where a premium advertiser would want to find their audience. We bring a certified network of premium publishing websites to the table that allows professional video producers to distribute their content beyond the two giants. Using instant articles and google AMP, publishers can extend their video reach even into Facebook and Youtube without losing control over their content. This allows publishers to leverage users inside and outside the Google and Facebook networks.
Which social media platforms are currently the most suitable for video and which one is the most dynamic?
We still see Youtube and Facebook as the biggest contenders in the social media “war for eye balls”. However, Snapchat and others are finding an ever growing audience as well. Video clearly adopted the needs of the mobile user. This is true not only for the length and format of video – moving to ultra-short and portrait format but also to the advertising needed to serve mobile users. We embrace all styles of video serving any use case a publisher wants to address.
VR is considered to be the hot topic of the moment, but it still has to be proved that publishers can make money with it. Is it worth investing in the new technology in your opinion?
We’re closely following all trends in video – also VR. However, due to the free use policy underlying our business model – our marketplace is based on advertising revenues – in this context, VR is less relevant at the moment. It requires a lot of bandwidth and special equipment on the user’s side, both of which cause considerable cost – and therefore don’t fit with an advertising-based revenue model. This being said, technical evolution sometimes happens literally overnight and sometimes, considerable cost drop to zero in the blink of an eye. If this happens, VR might well become an interesting field for us.
In 2005 you changed from the enterprise to the start-up world, founding and managing several start-ups. What are the lessons you learned from this experience for your business at ProSiebenSat.1 Digital and glomex?
We’re building a transactional platform similar to Airbnb or Uber – only focused on video. This requires top notch expertise in the business, but also in driving and scaling up leading-edge technology. We were very fortunate to have ProSiebenSat.1 supporting our mission to build a tech company with a global ambition in the heart of Europe.
During my start-up times in the US, I learned two fundamental things. First: Revenue follows traffic, which means that the most important thing is to get users to use your product. Once you have traffic, revenue will follow. Second: It's all about the team and the execution – at glomex, we understand that and quickly built an international team of top specialists and experienced managers. I think that our current market traction is testimony to our strategy to take a pole position in the online video industry.
Meet Michael Jaschke at the global meeting of the publishing community IFRA / DCX and don’t miss his keynote: “Video as a driver of the future: New ways for publishers”
Wednesday, 11 October 2017, 11:30 am - 12:15 pm | Content Stage 1, Messe Berlin, hall 21 b
About Michael Jaschke
Michael Jaschke is CEO of glomex GmbH, which he founded in May 2016 – at the time still in his role as managing director of ProSiebenSat.1 Digital GmbH. He began his career with Siemens, where he directed all North American telecommunication business units. In 2005, Jaschke changed to the start-up world: he founded Infotradix LLC, a company specialising in mobile advertising and social media. In 2007, he became founding CEO of Elanti Systems, responsible for successfully selling and integrating it into VPI Systems Inc. Following this, he founded Speadi LLC, that enables companies to playfully market real-time deals to end customers, and 48Bricks, an advertising and shopping platform based on personal recommendations. From 2015 to June 2017, as Managing Director of ProSiebenSat.1 Digital GmbH, Jaschke was responsible for the expansion of the digital AdVoD business and the further development of digital innovations. Now, he focuses exclusively on the management of glomex GmbH and its global and open marketplace for premium video content.