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How Video Discovery Startups Succeed

24th April 2013

Hunter Walk’s insightful post “Why Video Discovery Startups All Fail" has ignited a healthy discussion of the video discovery startup space, both in startup land press as well as in the Telly offices. We have a ton of respect for Hunter and YouTube, and we have been talking about this a lot at Telly the last few days. We wanted to share some of our reactions. You should definitely check his post out…but here are the main points that Hunter makes:

  • Verticalized content needs context not just collections
  • Horizontal content needs to solve search not just browse or curation
  • Social video is not a standalone product, just a signal
  • It’s hard to make money on other people’s video when you can’t monetize it directly

Through our discussions we’ve realized that there is a key difference between mobile video discovery and video discovery on the web. We’re off to a good start with Telly’s mobile products - 1.5 million app downloads and 51% MAU/Registrations. We believe two key factors have contributed to that success:

  1. Mobile video is largely a low intent discovery process
  2. Social curated content and virality are extremely valuable signals for low intent discovery

Mobile Video Is Largely A Low-Intent Discovery Process

When we first started Telly, we tested the Pinterest for Video hypothesis, as other startups have done and some continue to do. Our web product was based on a Collections model allowing users to organize videos by vertical themes (e.g. cooking videos), but we learned quickly that Hunter’s insights held true for us - this was not compelling enough of an experience to add real value quickly and cause new users to activate and retain.

However, we also learned that mobile is a completely different story. The context in which users discover content on mobile is fundamentally different - it is far more of a low intent discovery process than on the desktop. When was the last time you were on the bus and thought, “I want to search for a specific video?” It’s not a common use case. Chances are you said you wanted to “snack” on content. You wanted to see what’s going on with your friends and opened Facebook. You wondered what the world was focused on and opened Twitter. You wanted to read your favorite blogs and opened Flipboard. Or, you wanted to check out a friend’s photos and opened Instagram.  

These are all low intent discovery apps, where search is highly de-emphasized, which is much different from the web where users have the time to dive deeper for something specific. No one, YouTube included, has fully solved low-intent mobile video discovery, the way Instagram has for photos or Twitter for news. This is why so many startups are active in the mobile video discovery space. We agree with Hunter that there is not room for tons of different video destinations, as it’s too much mental load on the user to segment video apps by intent. This is especially true on mobile where the average mobile user relies on only eight apps per day.  However, as mobile video consumption continues to skyrocket it’s reasonable to presume that a few video-focused apps will figure out how to master low intent discovery and will rise to become the mainstream app for watching mobile videos every day. This is why Telly is in the game.  

Socially Curated Content & Virality Are Extremely Valuable Signals For Low-Intent Discovery

So how do you master low intent discovery on mobile and become a daily app for users? We’ve seen success across two key discovery vectors: social and virality.

Social should be no surprise - Facebook, Twitter, Instagram - many of today’s breakout mobile low-intent discovery apps leverage social as the key discovery mechanism. And why is social working? Low-intent discovery demands a higher level of personalization. Social is an extremely important personalization signal when you’re on-the-go and looking to “snack” on content, but not diving into content around a specific interest.

Our ‘My Telly’ feed utilizes social context from signals like what friends on Telly have watched or liked, in addition to external networks like what your friends are Liking on Facebook. Our personalized feed consists of both UGC content created and shared on Telly, as well as video from any of the 140 embed video sites that Telly supports.  Feedback from our community has indicated that a UGC-only discovery experience, such as Viddy or SocialCam, is not compelling enough to be a go-to-daily app for video discovery. They want their friends’ video of their kids followed by the dancing cat that got a million views in the last 4 hours in one app.

We also learned that a large number of our millions of monthly video views on mobile come from viral content - fans coming to see an artist’s backstage clip or a video of a laughing baby that captures the internet’s heart for a few hours. This type of content breaks out for a short amount of time, and then is essentially dead. Surfacing the real-time nature of interesting video, much as Twitter does for news and information, is something users aren’t specifically looking for and can’t be easily categorized or searched for.

Since updating our Telly apps on this product thesis earlier this year, we’ve seen our our video views per user increase 3x and we are acquiring roughly 120k new installs per week organically. We are consistently ranked only behind YouTube as the next most popular video app in the app store, and our app rating is 4.5 starts. We still have a long way to go to reach our goals, but it’s a good start.

Important to note that when we say mobile we are referring to our phone based apps, but it’s a fair assumption that as we move deeper toward an app-based ecosystem on the tablet and TV, many of the same differences that separate mobile from the web will hold.  Specifically, a discovery method powered by a few handfuls of apps that mostly rest on low or medium-intent discovery methods and with less of a focus on search.  

There Is A Business Here

As for a business model, we absolutely agree that a content experience that solely relies on YouTube in order to monetize is not scalable. Telly consists of hosted content as well as embedded, which gives us a content experience not solely dependent on YouTube. Additionally, providing brands and marketers with an experience to do native advertising through promoted videos and a UI that presents those videos in-stream as opposed to pre/post roles is a huge opportunity. With video ad spend expected to reach $8B online and $73B on TV by 2016 (eMarketer), this is very much a venture fundable space.

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