Online Video Ad Growth Potential Enhanced by New FreeWheel System

As advertisers and agencies accelerate their exploration of new options to traditional television advertising, online video sales organizations such as Tremor Media and Broadband Enterprises, along with broadband video companies Joost, NextNewNetworks, Worldwide Biggies, Veoh, Hulu, BlipTV, VUZE, Pando and others are eagerly ramping up their offerings. Now add to this mix a new company, FreeWheel, founded by former DoubleClick executives to provide an end-to-end online video rights management technology intended to simplify the management of video ad sales, ad serving and ad sales management rights across widely syndicated distribution channels. FreeWheel is launching this week with three charter clients -- Joost, NextNewNetworks and Jumpstart Automotive Media.

Earlier this week, YuMe announced a deal to power the ad serving for NBC Direct, NBC's new video download service and today FreeWheel (www.freewheel.tv) is announcing its proprietary Monetization Rights Management™ system to enable online video content producers, sales organizations and distributors to better manage their inventory and identify revenues across multiple distribution streams. "Our MRM solution enables maximum revenue for all of the partners across a widely syndicated advertising ecosystem," said Doug Knopper, co-CEO of FreeWheel. "Using our system, a real-time ad decision is made across all parties in the advertising value chain as to who is allowed to sell an ad across multiple partners and then accounts for value among them. Video advertising," he added, "is fundamentally different from graphical ad placements and search, and needs a unique solution to deliver maximized revenue with minimal complexity."

"In the music world the concept of digital rights management has been used to protect content and limit distribution. In the video world," Knopper argues, "the opposite should be happening. Content owners should want content distributed everywhere to build large audiences. However, content owners need to exert control over who sells the ads and where it appears."

The poster child for FreeWheel, Knopper told JackMyers Media Business Report, is the major law suit between Viacom and Google over Viacom (The Daily Show) content appearing on YouTube. "The content creators don't generate revenue when their content airs over properties they do not have control over. The web has been turned inside out by video." By offering a system for monitoring the monetization of content, Knopper believes FreeWheel will encourage studios, networks, independent producers and owners of video libraries to release more programming for online distribution. To date, the inability to regulate distribution and monetization, except through lawsuits and limited DRM systems, has restricted distribution. Knopper believes the FreeWheel technology could also provide a solution for the conflicts between the Writers Guild of America and Alliance of Motion Picture and Television Producers.

In the video world, says Knopper, who left BitPass to join FreeWheel and who served as SVP for DoubleClick's ad serving group, "the lines between who owns content, who owns audiences and who is allowed to monetize content are blurred. The existing ad management systems, tools, processes and systems are great at behavioral and contextual targeting," he believes, "but they are not designed to define who has the rights to sell advertising."

"Joost works with multiple content providers and distributors, which creates operational challenges and complex advertising relationships,” said David Clark, EVP/GM of Joost. "FreeWheel’s MRM system dramatically reduces our unique financial risks, allowing us to maintain control of our sales efforts, maximize our revenue, and optimize our advertising yield."

"The FreeWheel premise," Knopper explains, "is that content owners can build the largest audiences possible through networks and control the monetization. We are specifically looking at monitoring exposure to video advertising and integrating with legacy systems," says Knopper, acknowledging that online publishers already have ad serving, behavioral and contextual ad systems in place. Jon Heller, co-CEO of Freewheel, adds "With FreeWheel’s MRM technology in place, content owners can freely syndicate their content, while still keeping control over their advertising relationships, inventory management, and financial rev share accounting."

FreeWheel inserts a code into videos similar to ad tags for rich media. The tag "advises" the FreeWheel servers when advertising within videos is called for (when a play button is clicked). FreeWheel confirms the distributor has rights to generate ad revenues, identifies the most appropriate ad format and delivers information and metrics to the content provider.

Palo Alto based FreeWheel was founded in early 2007 with funding from Battery Ventures. FreeWheel engineering is managed by former DoubleClick lead engineer Diane Yu. The company has a team of engineers in Beijing, China.

For more information, contact Doug Knopper at dknopper@freewheel.tv