AOL’s Vanishing Video Strategy

What’s Arianna’s video strategy, assuming she has one?

When AOL acquired The Huffington Post in February, Arianna Huffington was given carte blanche over the company’s entire editorial strategy. Since that time, video seems to be nearly forgotten at AOL. The company has failed to execute on the ambitious original Web video content plans laid out in the pre-Arianna era. That’s despite a booming online video ad market and increasing appetitie for Web video among consumers.
Back in October, AOL CEO Tim Armstrong announced the first of a flurry of new series and partnerships aimed at making AOL a leader in original video entertainment. AOL rolled out an innovative, daily morning show, AOL Daybreak, as well as a pair of franchise series: You’ve Got, centered on celebrity interviews, and The One, a comedic news roundup produced by Next New Networks. Besides those shows, AOL announced a development deal the next month with Vuguru, the Michael Eisner-backed digital studio responsible for the likes of Prom Queen and other well-received Web shows. Then in January, AOL inked a deal with the global production firm Endemol to launch two Web originals: Re-Dressed by America and Mamá’s Recipe.
It was meant to be a cornerstone of the company’s larger strategy to emphasize content and attract brand advertising. But eight months later, AOL has little to show for the moves.
AOL has yet to produce a single series with Vuguru, despite a six-series commitment. AOL execs say that two Vuguru series, Unleashed and Little Women, Big Cars are in development, but they can’t say if and when those shows will premiere. Also, neither Endemol show has seen the light of day, and AOL officials have yet to announce when either or both will appear. According to sources, AOL may have passed on the Vuguru series The Booth at The End, which has gained some buzz as part of an exclusive distribution deal with Hulu launched last month. Several other AOL originals have vanished, while others remain in limbo, such as a talk series being developed with Queen Latifah and an entertainment show centered around the now-defunct site Popeater.
AOL does still command a large video audience. Per ComScore the company reached 43.9 million unique video viewers, good enough to make it the seventh largest video property in the U.S. But production companies in the Web video space say that AOL has lost interest in launching series, as the company focuses on its in-house production facilities.
“They are not in the market,” said one producer. “Their philosophy is, if we can do it in house, all the better. That’s why you’ve heard nothing from Vuguru and nothing from Endemol.”
One producer said he receives tons of resumes from AOL video execs. In fact, AOL’s own channel AOL Originals lists few series with any current episodes. The daily You’ve Got, which in the past has featured President Obama, is still going strong; according to sources, the show averages 10 million streams a month and is approaching 90 million streams overall.
But recent episodes seem to have exhibited few signs of life despite being distributed via AOL’s home page. For example, a You’ve Got episode from earlier this week featuring TV icon WIlliam Shatner carried zero ads and generated just two “likes” and a single comment. A few days earlier a You’ve Got episode staring Real Housewife Luann de Lesseps drove 14 likes and no comments. That clip also carried no ads.
It’s a curious turn. At one point not long ago, Armstrong was preaching the importance of video to AOL’s content-centric strategy. At a conference in 2009, he said that AOL had upped its video output sixfold. “We’re excited about video,” the AOL boss told the conference. “You’re going to see us do much more in the future.”
When David Eun, the former head of AOL’s media and studios was brought on board from Google in 2010, Armstrong reiterated this sentiment: “You will see an expanded amount of video we produce ourselves and video partnerships.”
When the infamous AOL Way document was released earlier this year, it was revealed that AOL wanted to up its video output significantly, featuring it in 70 percent of all stories produced, up from 4 percent.
Surely, some video series, like Daybreak, simply didn’t score with audiences. Yet AOL’s video stategy under Armstrong appears to have shifted abrubtly when Huffington came on board. Eun and programming head Amber J. Lawson were let go. Despite all of its success, The Huffington Post has never been known for producing much video of its own — and video is not thought of as something that interests Huffington personally.
Plus, the seeds for AOL’s current low-cost video philosophy seem to have been sown when it acquired the video syndication firm 5min Media in September of last year, which put Ran Harnevo in charge of AOL’s video operations
“Ran hates original content,” said one former AOL video executive. “He thinks it’s a waste of money.”
Word inside AOL is that 5min has become the sales team’s focus when talking video with the ad community. 5min features roughly 200,000 video clips, many of the niche, do-it-yourself variety produced by independent producers (the model is reminiscient of Demand Media). For example, a clip called “How to Get Gwyeth Paltrow’s Look” might be distributed on sites like The Style Network, ChicTV.com and Elle.com. According to AOL’s internal data, 5min content runs on hundreds of sites which in aggregate reach over 20 million unique users.
Thus, the thinking is that with 5min AOL can distribute branded entertainment content across multiple mid-and long-tail sites or offer advertisers the ability to run video campaigns aimed at numerous target audiences — at scale.
Yet brands are clamoring for original, high-quality video content, as evidenced by Hulu’s success. In addition, rival Yahoo has been quietly building success with video franchises (Who Knew?, sponsored by Toyota, has amassed over 113 million views) and is talking about getting more aggressive with scripted programming.
AOL officials declined to comment for this story. According to sources, the hope is that Huffingtonpost.com will significantly increase the amount of video content it features.
AOL rep Mario Ruiz said, “We are working on a video plan, but we’re not yet ready to make any announcements.”
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