Microsoft Aiming for Enhanced Revenue “Stream”

Microsoft is looking to boost its streaming advertising revenue with a sizable upgrade to its Web-based branded media player.

The third release of the MSNBC Media Player — which is incorporated into Microsoft’s joint news venture with General Electric-owned NBC, and into its MSN portal — includes new streaming content capabilities geared toward attracting new advertising dollars.

The player, which runs streaming multimedia, Flash and video and appears in a daughter window when a user clicks on a “Video” link, offers three advertising units. The first, and most noticeable, is a short-form streaming ad that precedes the video content in the player’s upper-left quarter.

Unlike previous versions of the player, a standard-sized banner ad appears below the stream, which MSN can tweak to display messages from the advertiser in the clip.

“When the streaming ad ends, the banner stays behind, so the advertiser gets two elements,” said MSNBC business development manager Charles Tillinghast. “The stream is 15 seconds long, and then the content clip loads … and the banner stays behind. So a user can click on the stream, and has a place to click if they like what they saw and weren’t fast enough clicking. And it carries the branding message forward throughout the presentation.”

Such placements, Tillinghast said, are likely to be more effective than the standard banner buy. “It’s an experience similar to TV, in which you see an ad and then the content, but not at same time. And it’s like the traditional Web experience, in which you have a banner present in conjunction with the content.”

Tillinghast also said Microsoft could turn a “meta-data” area to the right of the streaming clip — which normally features related MSNBC headlines — into a third ad unit.

“If we had a car company advertising, they could show an ad in the streaming clip … and also be showing a list of local dealers in the [text] window,” he said. “The idea of that is instead of trying to click through to an advertiser’s site, we can serve their information right there in the player, so [users are] more inclined to act on that information because it’s right there.”

The debut of the new media player comes on the heels of efforts by Microsoft to beef up its broadband capacity. An April deal with Denver-based backbone provider Qwest resulted in the Redmond, Wash.-based software and Web giant gaining a new platform for high-bandwidth content distribution and subscribers.

The revamped version of Microsoft’s Web media player is a continuation of that effort. In fact, Qwest is the only advertiser currently using ad buys on the player, through an ad buy as part of the pair’s earlier agreement.

But Microsoft is in talks to line up new advertisers — principally consumer advertisers — in the coming weeks, spokespeople said.

“We’ve seen a large demand for streaming video increase over the past year. With these improvements, we are providing truly seamless integration between video and text,” said president and chief executive John Nicol. “We are also delivering a more integrated system for advertisers, and are launching the player with streaming ad buys from major consumer companies.”

Spokespeople also didn’t rule out the possibility that Microsoft is considering using the new media player as the basis for a broadband subscription content area. It’s a strategy that players like Yahoo! appear to be perusing through its FinanceVision and ShoppingVision areas (which integrate streaming and static Web content, similarly to the MSNBC Media Player).

Currently, MSNBC hosts about 30 clips per day on its site, a number that the company is likely to expand in conjunction with an ambitious syndication plan, in which it licenses its video content to distributors, which place a link to a co-branded MSNBC player on their sites.

“Almost half of our users are broadband users, and those are the people who are inclined to watch video,” Tillinghast said. “We are looking at subscription concepts, and they may use this player as well. But that’s all investigational at this time. But this player is the platform that we would use for a wide variety of advanced products.”

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