Home Kyte Takes More Money, Moves Away from User Created Video

Kyte Takes More Money, Moves Away from User Created Video

Online and mobile video publishing service Kyte.TV, a darling of the European venture scene, has added still more funding to its substantial war chest and is taking a radically different approach to content.

The high hopes vendors like Kyte have had for User Generated video are crashing on the rocks of underwhelming consumer response and the market is shifting to a more traditional commercial media model. Will consumers come around in the future? Kyte says yes, I’m not so sure.

The Move Away from UGC by Small Publishing Services

Simply put, large numbers of non-professional users have not started producing video content outside of YouTube and other vendors are now shifting towards publishers looking to make money. For the immediate time at least, user generated video will probably remain centralized by in-house services from major social networks (YouTube, MySpace, Facebook) because that’s where the audiences and ease of use are. The forthcoming YouTube Live will continue this trend.

More high-end feature sets and publishing experiences will be in demand almost exclusively by big media companies and a small group of aspiring professional video broadcasters. One of the premium features Kyte is announcing today is premium Facebook applications, something also offered by competitor SplashCast. Kyte has worked out an interesting solution to updating Facebook app splash pages, but that’s just one of many problems publishers face on Facebook. Meanwhile it’s advertising that is going to make big media partnerships pay off for companies like Kyte and the places where the viewers are, MySpace and to some degree Facebook, still drastically limit the visibility of 3rd party delivered ads.

It’s a tough place for small video services to be in, but there’s enough money flying around that someone will have to figure it out someday. Everyone else will then follow but white label video publishing ala Kyte Premium will become commoditized once that happens.

Today’s funding announcement includes new investments from Disney’s Venture Arm SteamBoatVC and Nordic telecom giant TeliaSonera. These two put in a relatively modest $6 million more on top of previous money from other investors. The total Kyte funding now stands at $23.5 million. The company’s planned expansion internationally will probably burn through that pretty quickly, making a rapid solution to the advertising question an imperative. User generated content is not nearly as easy to monetize as big brand content, something Kyte confirmed to me today was their experience as well.

Kyte’s New Technology

The new Kyte video player is substantially less ugly than the old one and publishers now have the option to publish through premium branded players and stand-alone Facebook video applications. Kyte is also rolling out e-commerce capabilities in the premium players.

Video industry watchers will also want to know about live streaming. Kyte now says it will include live broadcast streaming from both mobile phones and webcams by the end of this month. The functionality is in private beta now but will be limited to the same Nokia phones that Qik is available on now.

Kyte offers good technology, but users interested in it shouldn’t expect to receive substantial support and innovation in your favor. User generated video is just not taking of for small players the way it was expected to. Today’s announcement extends the trend we discussed earlier this week, video is becoming more international and more commercial than was believed to be the case initially.

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