Outsourcing your video player can improve ROI, but it may not be right for everyone.

In the early days of streaming media, the only alternative for most companies was to buy their own streaming server, design and develop their own player, encode their own videos, and distribute the streams to their viewers. This required significant capital expenditures for equipment and ongoing expense for design and administration.

Over the last few years, a number of companies known as online video platform (OVP) providers have introduced service packages that provide all of these functions. In many instances, OVPs provide a better solution than most enterprises could assemble for themselves, at an overall lower cost. Still, OVPs are not the best choice for all organizations.

OVPS — THE BASICS

Most OVPs work like YouTube, Vimeo, and other free user-generated content (UGC) sites; you upload your videos to the site, and the OVP supplies a branded video player for your web site, access to an online content management system for your videos, high-quality distribution via content delivery networks (CDNs), and detailed viewing analytics.

If you had the budget, of course, you could develop all of these features for your own web site, but most companies simply create the player and post the video, and leave it at that. If you take that route, however, you’re not harvesting the full value of the videos that you’ve produced and posted. For example, the London Symphony Orchestra started by posting videos to their own web site, and later decided to use an OVP, ultimately New York-based Kaltura. According to Jo Johnson, the orchestra’s digital marketing manager, their own server capacity and a lack of ability to track viewers were key reasons for the switch. “We began to experiment with Flash video, firstly with the most basic (free) Flash player,” says Johnson. “As our video-making expanded, we worried that we lacked the server capacity to store our videos and ensure they were available at all times — and realized that we had no idea whether anyone was watching. Then a colleague mentioned that there were services that hosted your video, played it out through smart-looking players, and gave you a full set of analytics as well. It seemed like such a service would solve all our problems at once!”

Analytics are part of the basic package provided by all OVPs, and the value rings true with most customers. Australian software company Atlassian uses the analytics provided by their OVP — San Francisco-based Episodic — to help fine tune their video production. According to Atlassian staffer Jay Simons, “We know when viewers stop watching our videos, which helps us understand how to keep our viewers engaged. We know when viewers rewind a video, which typically means they didn’t understand something and needed to watch again. We know how many people embed our videos or forward links to others, which helps identify which videos our viewers found particularly helpful.”

EXPANDING VIDEO DISTRIBUTION

If your homegrown video player doesn’t enable embedding and linking, you could be limiting the reach of your videos, says Eric Meier, director of Interactive Media for the Rhode Island School of Design (RISD). Like the London Symphony Orchestra, RISD started with their own homegrown player that didn’t enable these features. Once RISD switched to OVP Brightcove, the player gained new functionality and video views increased significantly.

Many OVPs also allow you to “syndicate” your videos to YouTube and other UGC sites, so you can upload once and distribute your video to these sites. For example, through a partnership with TubeMogul, OVP Veeple can access over 25 UGC sites from a single upload, a nice time saver compared to uploading your videos manually to each site. You can also access TubeMogul without a Veeple account, and it’s well worth considering if distribution to UGC sites is critical to your video strategy.

OVPs also enable easy access to mobile distribution without the capital costs and investment in encoding and other expertise. Atlantabased Multicast Media is one of the many OVPs that support Apple’s new HTTP Live Streaming technology, which enables streaming to iPhone and live streaming to Blackberrys and other Windows Media-compatible mobile devices. This allows clients like the Eternal World Television Network (EWTN) to quickly and easily adapt these new technologies.

“EWTN’s distribution strategy is to make our content available as broadly as possible, but since we’re a non-profit, we don’t have the funding to chase every distribution fad,” says Jeff Burson, a senior web developer and online manager at EWTN. “Once it became apparent that the iPhone was here to stay, all it took was a phone call to Multicast Media to start the iPhone service.”

FASTHockey’s video application was just a bit too custom for any OVP, so they had to roll their own.

EASIER AND FASTER VIDEO DISTRIBUTION

Most organizations recognize that OVPs allow them to decentralize the video uploading and distribution process within their organizations, and get more videos published faster. RISD’s Meier recounts that before signing on with Brightcove, all video files were uploaded and embedded into web pages manually, “which was labor intensive and created a bottleneck around his department. This was especially frustrating around RISD, where so many creative students, staff, and alumni wanted to produce and distribute their own videos,” he says.

Since the Brightcove system is simple enough for non-technical users, Meier’s department can “get out of the way” and let others upload and deploy videos. In the future, Meier envisions individual channels for the different departments so video production and deployment can become totally decentralized. That will increase the number of videos that gets deployed with no increase in staffing.

Meier also gives Brightcove credit for making it easier to assign videos to multiple channels, ensuring the broadest possible, and most relevant, distribution. For example, if the Film Department shoots a video about alumni fundraising, they can make it appear on the Film, Alumni, and Fundraising channels simply by clicking the right checkboxes in the back end.

Content channels, of course, help improve website “stickiness,” because if a viewer watches one video on the Film Department, there’s a good chance they would be interested in watching another if it was noticeable and easily accessible. Programmatically assigning videos to channels makes sure that your videos get maximum exposure with minimal effort.

Atlassian’s Simons tells a similar story. “Many of Atlassian’s videos are screencams used to illustrate new features or for training purposes, and they’re generated by programmers and staff around the company,” he says. “Before choosing Episodic, all videos had to go through the web team, who created a custom player, uploaded the file, and linked the video to the desired page. Today, 13 Atlassian employees can upload and deploy files through the Episodic system, which gets more videos posted faster and frees the web team for more critical tasks.”

Most of the features discussed above are fairly generic, and are likely available from many of the OVPs now selling their services. There are also other more exotic features that may not be as generally available, but may well be worth seeking out.

DYNAMIC ADVERTISING INSERTION

If you’re attempting to monetize your video, the ability to dynamically insert advertisements before existing content is critical. That’s because the alternative — static advertisements baked into the actual video — are impossible to change if you acquire a new sponsor. According to Xeni Jardin, executive producer of Boing Boing Video, dynamic advertising insertion was Boing Boing’s top criteria when they recently changed to a new OVP, ultimately choosing Episodic.

“Much of our revenue comes from advertising campaigns that can change from month to month. If we sell a new sponsorship tomorrow, we can deliver all video views to the new sponsor. So if one of our videos goes viral, the current sponsor gets the benefit,” Jardin explains.

You don’t have to be an advertising supported site to appreciate dynamic advertising insertion. Software company Atlassian uses dynamically inserted advertisements to promote their own company events. According to Simons, “Last year, we were promoting our annual user conference, and we added a 15-second spot promoting the event to the beginning of more than 100 videos, which took less than 15 seconds to do, and would have been impossible if we had to do it manually.”

INTERACTIVITY

Many ecommerce sites use OVPs that enable clickable hot spots within the video to help improve viewer response rates to levels far beyond those achieved through traditional banner or even pre-roll/post-roll advertisements. BeerTap TV is a show about beer that uses interactive “clickable” technology from OVP Veeple. The company’s Erik Boles says that clickthrough rates range from 20 to 90 percent, depending upon the content. The 90 percent figure was achieved with trivia questions posed in the videos that viewers click to answer in the company’s forum, which also helps boost viewer engagement. The site also achieved a 71 percent clickthrough rate in a show about a bill in the Colorado legislature that would change how beer was sold in Colorado, obviously a hot topic for BeerTap TV’s audience. Specifically, viewers could click in the video to view an economic impact study or visit the bill’s web site, and 71 percent of the viewers clicked one or more clickable regions.

In direct selling applications, where viewers are prompted to click through for more information on a product, click throughs average 24 to 29 percent, far beyond the average rate reported for banner or similar advertisements. BeerTap TV’s player is embeddable, and the clickable links are incorporated into any embedded video, which banner advertisements or other promotional links embedded in a web page can’t do.

It doesn’t take a lot of imagination to see how this interactivity could be highly useful in a corporate or educational setting. Students could click within the video to download the class notes or homework assignments. Employees could click a video to download a new policy or the latest financial results. At a high level, in B2B settings, most video is produced to garner some kind of response, and clickable video may be the best way to deliver that response.

OVP Brightcove makes it easy for the Rhode Island School of Design to create and populate channels in their video player.

OPEN SOURCE OVPS

If you’re creating a highly customized video streaming application, you can develop it from scratch or license code from an OVP like Kaltura, which can dramatically speed your time to market. Better yet, open source options can offer the best of both worlds, says Davyeon Ross, president of AthletixNation, a company that delivers Division I college video highlights and sports applications to web sites and mobile devices. Ross’s company started by designing their own system, but quickly saw that it would involve lots of development time and expense, and that the finished system — however brilliant — wouldn’t be the “special sauce” that distinguished his company.

In choosing an OVP, Ross’s number one requirement was an open source platform where they could both own the code and continue to modify it. One of the few OVPs that met this requirement was Kaltura. “When you’re looking at build versus buy with an open source solution, nothing will fit 100 percent,” he says. “Kaltura gave us about 85 percent of what we needed, and matched up well with our in-house development expertise. If we couldn’t have found an open source solution, we would have had to build it ourselves.”

Despite the convenience and flexibility of many OVPs, some companies have found that the more unique your video-related requirements, and the more integral your video delivery system is to your business, the less likely may be that any one OVP can reasonably meet all your needs. That’s what Marc Ruskin, president of FASTHockey, found. FASTHockey is a site that streams over 1,800 hockey games a year to parents, scouts, recruiters, coaches, players, and fans from around the world.

The company has been in business since 2005, and, according to Ruskin, has looked for OVPs each of the last two off-seasons. “We’re not a software company,” Ruskin explains, “and it’s resource intensive to own and operate your own video platform. Unfortunately, our product is so unique that we couldn’t find a partner that could deliver the features and functionality we require.”

Ruskin says that OVPs couldn’t meet their requirements in several critical areas. For example, FASTHockey integrates their game feeds with hockey related data and supplies widgets that viewers can use to find additional games. Their payment scheme utilizes tokens sold on a sliding scale — the more you buy, the cheaper each game — not a simple pay-per-view model. Because they support so many live events, they needed a custom, automated encoding system that could start and stop on demand and be accessible behind firewalls.

Though some OVPs could supply some of these features, none could supply all, so FASTHockey continues to advance their own technology. In addition, as much as Ruskin disclaims being a software company, staying close to the video technology was a clear priority. “We want full control over this ‘bleeding edge’ technology — we want to smell, taste and touch it. This is what we do, how we generate our revenue, and the ability to customize our product for the unique needs of our audience is critical to our success.”

Still, for most companies with relatively middle-of-the-road streaming video requirements, OVPs present an opportunity to upgrade your streaming functionality while reducing capex and other associated costs.

Jan Ozer is a streaming media consultant and frequent contributor to industry publications on streaming-related topics. He’s also a local event producer in and around his home in Galax, VA. He can be reached at jozer@mindspring.com.