Adventures in Repurposing

With online interfaces already transforming the way stock footage is marketed, sold, tracked, and purchased, Kevin Schaff, Thought Equity founder and CEO, set out to offer a more streamlined model with some unique features.

Last month, National Geographic Digital Motion (NGDM), the stock footage service of the geographic society's Digital Media division, announced that it had chosen Denver-based Thought Equity as its Internet-based licensing and distribution partner.

The deal with National Geographic continued a string of successes for the four-year-old company, which reported revenue growth of some 500 percent for the first six months of 2006. More than 100,000 hours of high-quality film and video footage from internationally respected content creator NGDM joined Thought Equity's roster of 165,000 clips, which includes the production libraries of Sony Pictures Entertainment and HBO, NCAA footage, and a unique collection of customizeable commercials.

The small, 35-person company began by selling “on-spec” print work — material that ad agencies had sitting around in storage that might be useful to newspapers, magazines, or anyone who wanted to save money yet create good-looking ad campaigns.

“Originally, I had thought the print side of things would be my main market,” says Kevin Schaff, Thought Equity founder and CEO. “But since many of the campaigns also had an advertisement attached to them, we found that we got much more interest — and money — for that motion imagery than for the print work.”

Schaff says he thought the online market for motion imagery seemed fragmented and confusing to use; he wanted to bring a clean, standardized method to what was becoming an increasingly lucrative marketplace. BBC Worldwide has estimated the current stock footage market at $300 million per year, and expected it to grow to $1 billion by 2010. Proliferating Internet ads, games, and other snippets for cell phones, and even for the coming digital billboards, would all need high-quality footage that could be bought for a fixed fee. With this new distribution landscape in mind, Thought Equity set out to deliver a high volume of content in multiple formats from Adobe Flash to 2K. With online interfaces already transforming the way stock footage is marketed, sold, tracked, and purchased, Schaff thought he could offer a more streamlined model with unique features.

In the highly competitive stock marketplace, the business plan contained a concept Schaff expected would be irresistible to the creative community. The killer app? Pre-packaged productions, a sort of “chef's prep” product that delivered mix-and-match components from high-gloss, full-motion commercials that either hadn't made it beyond the spec stage or contained non-proprietary but quality footage that couldn't be reproduced on the cheap.

Although it had made significant investments in its internal online licensing operations, National Geographic Digital Motion sought an online distribution partner in Thought Equity to tap into a different group of producers who would be creating programming for other audiences, such as online markets.

His hunch was right. “The commercial elements we have on the site sell some 20 times better than our traditional stock footage,” Schaff says.

Although Thought Equity faces well-funded competitors such as Getty Images and Corbis, those libraries contain relatively more still photography than motion footage. Neither those stock providers nor any others have the rich library of full-motion commercials that make Thought Equity a resource for producers without a vast budget on tap who want to break into production of commercials.

For a number of tight-budget situations, using Thought Equity's pre-built commercials makes sense. While you can build a commercial by carefully collecting separate pieces of stock footage, it's logical to buy a completed package for some jobs.

As production manager at the Cox Media cable station in Santa Barbara, Calif., Debbie Preston knows her clients in the local community don't have a lot of money to spend for commercials, yet everyone always wants the best possible results. That's one reason employing Thought Equity's commercials clips has become appealing as a time and money saver.

“We've been using [pre-built commercials from] Thought Equity heavily over the past year,” says Preston, who now buys an average of two spots per month. In the simplest scenario, the cable facility buys completed 30-second spots, adds voiceovers and final end tags, and delivers a high-production-value product to a local business within tight time and budget constraints.

While the facility still buys stock footage for creating commercials from scratch, as well as for interstitials and other internal use, it's the completeness of Thought Equity's package that sets the company's approach apart, Preston says. “The commercials give us a lot of flexibility, since they usually include different angles and even shots that ended up on the cutting room floor.”

Buying a stock commercial includes exclusive local use of footage, so Preston doesn't have to worry about it showing up elsewhere.

“It's also an easy service to use,” she says. “I simply make a call to our [Thought Equity] rep. He will post links to relevant material quickly — usually within an hour at the most. They will also do involved searches for us, which doesn't cost us anything.”

Using Thought Equity''s web interface, you can click on the various codecs listed under the image to get a sense of how each handles motion material—some footage may perform better under one codec than another.

While Thought Equity's easy-to-customize commercials provide a unique twist, the company has also drawn significant partners for its more traditional licensing business, in some cases serving as an expansion platform for an already established stock business. NGDM, for example, had made significant investments in its internal online licensing operations while preparing the library for access through a variety of distribution channels. Why seek a partner?

“We wanted an additional online presence, and have found a licensing partner well-versed in every aspect of motion imagery licensing and management to help us reach our goals,” says Jocelyn Shearer, vice president of worldwide sales, NGDM.

According to Shearer, most producers buying National Geographic's stock footage over the years worked on long-form programming. Redistribution deals such as that with Thought Equity, she says, allow the library to tap into a different group of producers who will be creating programming for other audiences, such as the burgeoning online markets.

Placing National Geographic's footage on a site such as Thought Equity's, with multiple stock libraries, also addresses a producer's desire for one-stop shopping. “While producers know they can come to our site for specific footage, I think many prefer to go to just one or two sites that might have everything they need,” Shearer says.

Thought Equity's business acumen also factored into the decision. “Thought Equity has the ability to put more of our library online faster than any other company,” Shearer says, “while proving to be the clear leader in all areas of technology, including search, realtime content delivery, creative content packaging, and marketing in new media.”

Similar to its deals with Sony Pictures Entertainment and HBO, Thought Equity doesn't have an exclusive online arrangement with National Geographic's Digital Motion library. Instead, each of the libraries will still digitize and control its own footage, in effect duplicating Thought Equity's task.

One difference: National Geographic's own archive provides more metadata. For example, a scientist might search through much more detailed synopses of footage and outtakes than those which Thought Equity provides. Such metadata would enable her to study a particular animal in-depth, something a more general audience wouldn't require. Dedicated NGDM researchers who know the library intimately will also help with more specific searches. Shearer says NGDM's traditional long-form customers will most likely still gravitate to NGDM's site. “There will always be people who want to go deep,” she says.

On the other hand, Shearer says Thought Equity provides another kind of marketplace for NGDM's assets, one that she feels is poised for dramatic growth. “Professional re-users of content, whether they are using snippets for cell phones or longer pieces for business-to-business applications, have never had such direct digital access to such a wide variety of motion footage,” she says, noting that Thought Equity, with its diverse offerings of deep archives such as NGDM, can bring both breadth and depth of footage choices together in one sleek, web-based interface. While NGDM is also rapidly digitizing its library and redesigning its interface for the wider stock footage market, Shearer, whose background includes positions at Getty and Corbis, understands how a platform such as that of Thought Equity can speed the time to market and provide marketing benefits that are unique to sites with broad appeal.

“At Thought Equity, we're alongside very different brands and there's an intrinsic benefit to that kind of a multiplex environment,” Shearer says, noting that the diversity is supported with Thought Equity's aggressive marketing. “They understand that they have to talk to all the different strata of users differently — and, of course, you can't beat their Speed View [instant playback of clips]. I've been trying to get the secret sauce recipe on that feature.”

“One of the most important things we do is to add value to all of our footage,” Schaff says of Thought Equity. “You can call what we do ‘packaging investment.'' We add metadata, and we also create all the various file formats you see online such as QuickTime, Windows Media, and Adobe Flash. We built Speed View, a media player that allows you to see instant playback by simply mousing over an image.”

The company, whose investors include Vista Ventures, Jona Ventures, and Access Venture Partners, has already spent tens of millions of dollars to feed and manage petabyte-sized storage and playback servers and high-speed Internet links.

Meanwhile, a “digital refinery” in Wyoming handles all aspects of ingest, including post work (using Apple Final Cut Pro and Avid editing systems running over an Apple Xsan), metadata input, and transcoders to handle up to 25 video and film intermediate formats. Telecine, however, is outsourced.

In another move to differentiate its offerings, Thought Equity has set the quality bar high. “Unlike any of the other stock houses, we store all of our motion imagery at the same resolution that it comes in as,” Schaff says. “Film, for example, is either stored as 2K or as intermediate film negative. We do all our transcoding from that initial uncompressed file or film, creating versions for everything from formats for PowerPoint, iPods, and cell phones through to all of today's video formats. ... We're the only company that can take a high-resolution format like D5 and create a PowerPoint from it, doing all of our transcoding on-the-fly.”

That's right. No waiting. Mouse over any image on the site and you get instant playback without launching a window. If your connection is fast enough, you can immediately download 24p HD (if it's available for that particular cut).

But don't expect a run on hi-res material for feature film use. According to Shearer, a growing number of stock footage users target their productions elsewhere. “Over the last 18 months, we've seen a sharp increase in people [who use National Geographic stock footage] creating content for web broadcast,” Shearer says. “National Geographic's own website [www.nationalgeographic.com] is one example, as we now do a lot of short-form, web-only productions that aren't just repurposed from finished broadcast shows.”

To make such a library, with so many different formats, run in realtime takes a considerable amount of computer technology.

Beyond the mix of gear used for ingest, most of the storage and playback are handled by Sun Microsystems and Dell server products. Sun StorageTek SAM-FS software provides data classification, centralized metadata management, policy-based data placement, protection, migration, long-term retention, and recovery.

SAM-FS is a self-protecting file system that offers continuous backup and speedy recovery features. According to Sun, operating costs are contained by providing data classification and customer policy-driven data movement across tiers of storage. Another benefit: With today's rapidly proliferating file formats, the file system has been designed to transparently migrate data to new media formats as they come along.

Want to create your own archiving and playback system? If you've got the budget, consider investing in Thought Equity's setup, which includes Sun StorageTek FlexLine FLX280 (enterprise storage system); StorageTek BladeStore B220 (disk system); StorageTek L20 (tape library); StorageTek LTO Ultrium (LTO tape drive); StorageTek L700e (tape library); StorageTek ACSLS (library manager software); McData Sphereon 4500 (fabric switch); and lots of custom software.

According to Shearer, if you're a content creator who wants to sell your footage, a simple licensing and distribution deal might be all you need.

“Content owners make money with stock footage houses by allowing their content to be represented — while retaining their own copyright — and taking a split of any licensing dollars generated by that representative,” Shearer says. “But I wouldn't want to say that there aren't various business models for content owners and stock agency relationships: There are a variety of revenue splits, a variety of ways to recoup costs, a variety of payment arrangements, and occasionally even a rights exchange where value is assessed but no money changes hands.

“Then you have a choice of different license types — rights-managed, royalty-free, subscription, or feed. While National Geographic would never relinquish its copyright over its footage, sometimes a stock agency will even buy content outright. This means they purchase a full copyright transfer and [they] themselves become the content owners and distributors instead of just a representative.”

While many stock footage houses buy only very specific types of creative, according to Schaff, Thought Equity is always open to submissions of well-produced material. Reach the right person by e-mailing content@thoughtequity.com.

“We're on the cusp of a complete explosion of content usage in the commoditized clip market,” Shearer concludes. “It's already there for the business user, and I think consumers are not far behind, given the popularity of user-created content. Redistributing and reselling of content is certainly not new, but quality content owners must figure out how to serve an ever-growing market.”

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