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The New York Times
News Web sites are starting to look a lot less like newspapers and a lot more like television.
CNN.com and ESPN.com are featuring video much more prominently on their home pages, often prompting visitors to press play before they begin to read. Even The Wall Street Journal has moved its video player front and center with a twice-a-day live newscast on WSJ.com.
A major reason is commercial. At a time when other categories of advertising dollars are shrinking, video ads are booming. News sites are adding more video inventory to keep pace with the demands of advertisers, and benefiting from the higher cost-per-thousands, or C.P.M.’s, that ads on those videos command.
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The attention to video mirrors changes in how consumers are experiencing news. Major events — be it the presidential election or the death of Michael Jackson — bring a surge in video stream viewings by new users, and each time some of them stick around.
“Every watershed event leaves video more popular than before,” said Charles W. Tillinghast, the president of MSNBC.com, a joint venture between NBC Universal and Microsoft [MSFT
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K. C. Estenson, the general manager of CNN.com, a unit of Time Warner [TWX
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], said that “people are using the Internet in a different way now.” He added, “With broadband penetration becoming ubiquitous and more and more sites having this easy capability, people are expecting video to be there.”
Media companies typically do not break out figures for video advertising, and certainly the video revenue pales next to search and display advertising. But the growth has spurred investment and interest in video production.
Among Web sites operated by newspapers, The New York Times [NYT
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], Gannett [GCI
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] and Tribune each reach more than a million viewers a month with video streams, comScore says. The home page of The Times sometimes streams live video of events; it carried a news conference Friday about the shootings Thursday at Fort Hood, Tex.
But video can be costly to produce, hindering some sites’ efforts to expand and leading people like Mr. Tillinghast to predict that access to television film (like a bounty of NBC News video) is an advantage.
Beyond news sites, video is now the fastest-growing segment of the Internet advertising market. Digital video amounted to $477 million in revenue in the first half of 2009, up 38 percent from the same time period in 2008, according to the Interactive Advertising Bureau.
With an estimated $5 billion in revenue in the first half of 2009, search remains the dominant segment of online advertising, but it is expected to grow only marginally this year.
Augmenting the increase in video spending is the growing acceptance of pre-roll — the once-derided ads that appear before a video plays.
“It actually works really well,” said Brian Quinn, the vice president and general manager of digital ad sales for The Journal’s digital network. A 15-second pre-roll “followed by two to five minutes of high-quality content is a fair-value exchange,” Mr. Quinn said.
Analysts say they expect the flow of online advertising dollars to video to continue. The research firm eMarketer projects 35 to 45 percent growth for the segment for each of the next five years, topping out at $5.2 billion in 2014. (Even then, it would hardly rival search advertising, which is projected to be a $16 billion business.)
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Data is a real-time snapshot *Data is delayed at least 15 minutes