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You got to hand it to Cisco (NASDAQ:CSCO) CEO and Chairman John Chambers. He recently came out and labeled video the “killer app.” When I was reading his comments, I thought: “man, I hate that word: ‘killer app.’”

Of course, like a major league hypocrito, I just penned a post on how Google (NASDAQ:GOOG) can put the kibosh on Salesforce.com (NYSE:CRM) and used the dreaded term myself. So, I’ll tone down the lashing I was going to hand out over the excessive use of the term.

All to say, it’s interesting to hear Dear John say that, for if indeed video is the killer app, it might be because it might kill your business.

All right, disclosure time: as founder, investor and executive producer of WatchMojo.com, a producer of original video content, clearly I am bullish on video. Obviously I am happy to see someone as brilliant as accomplished as Chambers decree that video is the killer app. But, it does make me think of a few things that video brings with its status as “killer” that can and will probably kill a few [content] companies who rush into the production thereof without first doing some soul-searching.

Sit down, cause we’re about to go on a trip.

Chambers listed “converged video, data center virtualisation, the connected home and the next-generation service provider infrastructure” as key growth markets for the networking vendor in the coming years. Cisco is a networking vendor.

“If there is a killer app, it’s video,” Chambers said during a keynote address at the Cisco C-Scape Global Forum 2006 industry analyst conference in San Jose. “Just watch what has occurred with YouTube, just with what I would call baby steps in terms of loads on networks.”

Gold Diggers vs. Shovel Makers

All right, no doubt there. He is right. If you liked Cisco in the late 1990s, you would love Cisco in the 21st century. I picked Cisco as the The Ten Best Tech Stocks Of All Time">Top High Tech/Internet Stock of Past, Present and Future recently.

Compare Microsoft's (NASDAQ:MSFT) and CSCO’s stock over the past two years. If MSFT was the Computer and Software play, then Cisco was the Web play. With the burgeoning traffic emanating from digital media, Cisco is poised to benefit even more so than the Akamai’s (NASDAQ:AKAM) of the world.

Still not convinced? Compare the 1-year stock charts of MSFT, CSCO and Google. Yep, Google has trailed Cisco. Cisco has outperformed Google.


You know that saying about don’t invest in the gold diggers, invest in those who sell the helmets and shovels, right? Well it applies to Cisco. But, the fact remains that for every one Cisco (shovel and helmet-seller) there are thousands of gold diggers. Technically, at the risk of sounding like a hypocrito again, our our company is a major gold digger in the sense that we create video content, lots of it. We have over 3,000 video clips in our library, and counting.

There are many other content creators who look at video and don’t know what to do. Online these days, there are many content companies who know that video might be the killer app for them too. I sometimes think that one way magazines can make up for their disastrous strategies with migrating online in terms of text content would be to launch aggressively into video content. But by the same token, I am not sure that would work.

Why?

I just spoke to a company who I advise on video strategy. They told me that they “did not know what to do with video,” and that they had “put up some videos and people were not really clicking.”

Hmm… Here’s why: This company (whose name will remain confidential out of courtesy) is not a video site. It’s a content site with loads of text content. I know, not narrowing it down exactly. The point is that its visitors are readers, not viewers. That is an interesting distinction to make and critical to understand, as obvious as it might be.

Just because we’re online does not mean we cannot and should not differentiate a reader from a viewer.

My old company was an online magazine. It published text content. People came and were in a certain mindset: they came to read. Simply throwing up a video was no guarantee of success.

Video and Text: Push vs. Pull

Text - and thus reading - is a pull mechanism. Video - and thus viewing - is a push mechanism. In the latter, you chase information and proactively read. In the former, you sit back and watch. Generally speaking, with the Internet population at 16% and growing, it is early adopters that have migrated online. As such, people who “pull” information.

Over time as more and more people put the remote control, newspaper and print magazine down and come online, then we’ll have more people online who do not want to chase information, but rather have the information come to them.

Do All Magazines Need to Offer Video Online?
For purposes of illustration, I think some offline companies are better suited at diving into video than others. In the men’s market for example, Playboy and Maxim have better chances at succeeding in video than Esquire or GQ. GQ could do well because its fashion angle conveys well to video. Esquire however is article heavy. Just because you can get a writer to speak his story does not mean he should. Why? Because Esquire’s consumers are readers, not viewers. By pushing video too much, video will in fact be a “killer” of sorts to its business.

Maxim and Playboy have fantastic articles (I have heard) but they are visual sources of content mainly. As such, they would convert well to video. I think Maxim is doing a great job at this. They finally bought the url "Maxim.com" which should only help them convert their audience and grow online.

The lesson for magazines is that some need to focus more on getting their text content online (Esquire-types) whereas others (Maxim-types) should start to focus on video, Maxim, after all, throws parties that gives them cool video content. They also have model shoots that make for great video fodder. Of course, they have started doing this already. But an online magazine that targets Maxim’s demographic but publishes text-heavy content out of an igloo, for example, might not have the same visual asset to launch online in video format.

These are entirely new markets for them, that is what needs to be understood from the get-go. It’s essentially reshaping your business. My old company, for example, was a text company (online magazine) whose readers, I doubt, care much for video. But the euphoria over video got to them too: after showing no desire to produce video and mocking the idea in company-wide meetings, they sued me and tried to convince a judge that I stole their idea. The judge sided with me and literally laughed them out of court.

It’s now been twelve months since I left and they have yet to publish a video, so I think that argument died a long time ago. But having stated on record that they do intend on going into video one day, when the day comes that they publish a video clip, they will probably learn that a reader is in a different mindset than a potential viewer, as my client learned and told me yesterday.

What About Newspapers?
I have also advised a couple of newspaper chains about video and search. With them, it’s different. Sure, the feeling of reading a newspaper is unique, but the overall need-satisfying offer is news. As such, newspaper sites need to get on the video train ASAP. Of course, they have greater issues in that they need to lose the “paper” status and embrace the “information through any outlet, in any media, at all times” mantra.

Bottom line: sure, video is great. Video and web mesh very well together, but before every content company seeks to video-ify their content, they should ensure that it won’t kill the user experience either.

Now that would be killer…

Source: Is Video 'The Killer App'?