German no-more-startup sevenload – a media sharing portal with a strong focus on quality content (as opposed to fuzzy-shaky UGC clip overlord YouTube) – just received massive VC funding from T-Online Venture Fund. Handelsblatt reports, the overall investment to be 25 Million Euro, 15 Million of which come from the Deutsche Telekom VC. That’s not only a massive investment in a site that so far has its main following in Germany (14 Mill. visits, 100 Mill. PIs, sevenload figures), it’s a big deal for the entire online video market overall. Compare Veoh (21.5 Mill. UUs/month, $26 Million), Vuze (ex-Azureus, 1.5 Million users any given time, $34 Mill. in total), oh, and Google’s megalomaniac YouTube deal of course.

What’s the money for, you ask? Growth of course! International expansion, too, it seems, which again, is a big deal for a Germany-based Web2.0y start-up. Few have been successful in their ventures beyond Germanic borders so far, local rating site Qype is one and the business network XING (both from Hamburg). Going public, as we learn, is also an option for sevenload. That would make them the second German Web 2.0 startup to make that leap, after XING made their IPO in 2007.

So there’s big money in this. And bloggers and media alike are asking “Is it worth the valuation? How will they ever make money?”. Very rightly so! While the scepticists may compare sevenload to YouTube because of its UGC heritage and don’t see advertisers spending big bucks in such an environment, others may look at the quality content approach they’ve embraced. sevenload features a number of channels that aggregate professional (broadcast) and self-(co-)produced content and gives visitors to the site some guidance as what to watch. While there is a lot more German language content than English content on the site at the moment, the fresh funds may help convince content owners to trust in the longevity of sevenload’s existence and license more material.

As always, content is key, but at the same time, there’s the usual hen-and-egg problem. No content, no users, no ad money, no content. VCs can help with the no money part to some extent, though. But this is something all video sites are struggling with and you can’t blame them for content owners (often traditional broadcasters and affiliated production companies) and independent producers being slow to understand the potential that’s in the web for them.

It’s a very long shot to try and replicate linear broadcast TV on the web, but without the linear. As long as broadcasters, public and private haven’t understood that the Web is their only road to survival on the long run, trying to bring “old” TV to the web is doomed. See Joost’s glorious failure in the fragmented European market. See Zattoo’s niche existence with IP-filters limiting access to content from neighbouring countries.

The opportunity lies, as often these days, in the long tail of content. Vuze (disclosure: my client at Hotwire) are taking that route by focusing on licensing the wealth of niche content that simply would never fit on TV, because a) there are not enough channels and more importantly b) because the web offers so much better ways to non-linearly discover new content. While Vuze technically is a P2P BitTorrent client and saves infrastructure dollars that way, sevenload could be the web-based equivalent. Their newly developed player is actually good quality and their social features (think discovery of new exciting content!) are way beyond what Vuze have just introduced in their latest release. Not because Vuze didn’t know better, but through sevenload’s social media DNA.

And the advertisers? Well, they know display ads on websites – and are struggling with the low conversion rates. sevenload claim to have high CPMs (up to 20 Euro), Vuze are playing the “immersive viewer experience” card that should lure classic pre-roll ad spend to the platform. The key question for advertisers remains how these online services can help target customers better than traditional TV ads. Do we know? No. Not yet. But as more and more significant portions of the total advertising budgets move online and users, especially those young folk who have already left linear TV for good, embrace new platforms and new ways of discovering cool stuff, on whatever technical basis, we will find out.

sevenload’s latest financing coup is T-Online Venture Fund’s bet on the future of quality video. In German, venture capital is called “Risikokapital” – risk capital – and that’s what this deal is all about. Taking the risk of failing big time, with the opportunity of shaping the future of a yet to be defined new medium. With great profits. Someday. Bottom line, it’s a great move and great news for the German start-up scene.

By the way…
…word about the investment made its rounds in the blogs a full day before the official announcement. So whenever you talk to peers in the industry at an event (as apparently happened at Supernova), either don’t say anything, or be prepared to announce simultaneously.

Update: Also read my post about sevenload’s communications during their relaunch in March this year.

Nachdem Herr Knüwer offen zugibt, dass sein Post über Heidis Meeedchen seinen Blogtraffic in die Höhe treibt, versuche ich das auch mal. Soviel Searchphishing darf doch sein, oder? Nur um zu gucken, wer per Google bei mir landet und dann wieder verschwindet. Mein Tages-Lesermaximum liegt bis dato bei 230 Besuchen am 30. März, als ich über die Re-Launch-Kommunkation von Sevenload schrieb. Wenn ich trotz abgeschlossener Sendung und gefundenem Topfschnittmodell drüberkomme, sollte ich mir vielleicht überlegen, ob ein zweites Blog mit Trivialthemen vielleicht doch keine so schlechte Idee ist. Wer jetzt “Leserverarsche” ruft, fasse sich mal an die eigene Nase, denn in der Überschrift steht ja, dass es hier nicht um GNTM geht.

Pe Es: Kommentare wie “Ich war hier” u.ä. werden ausnahmsweise akzeptiert.

It’s done, es ist geschafft. sevenload 3.0 went live this morning and it’s working fairly well, with some nicks here and there, but that’s only natural after such a huge makeover.

Congratulations to the sevenload team for mastering this. And especially for keeping the entire community in the loop about your trials and tribulations all weekend!

Inzwischen finde ich den Durchhaltewillen des sevenload-Teams in Sachen Relaunch ja schon bewundernswert. Ibo bloggt und twittert weiter unverdrossen den Stand der Dinge, es knirscht offensichtlich in einigen Ecken, sodass der große Hebel noch später umgelegt werden kann, als noch gestern gedacht. Aber der Humor in der Truppe stimmt, wie der aktuelle Wartungsscreen zeigt:

Übrigens: Mein Post von gestern nachmittag hat offensichtlich den Nerv der Stunde getroffen und wurde von Olaf Kolbrück bei Off-the-record zitiert. Danke dafür. Auch Wolfgang Lünenbürger und Sebastian Keil sind voll des Lobes für die Kommunikation seitens des sevenload-Teams. Martin Oetting hingegen war es wohl etwas viel der Selbstoffenbarung, die Kommentare ließen da nicht lange auf sich warten.

Hardcore IT people know that migrating a web community with tens of thousands of users to a new technical platform is no fun. It’s very hard work that requires extremely careful planning and meticulous process control to work out as planned. Meaning that the user experience should not be impacted more than absolutely necessary.

This is exactly what German video/multimedia sharing community sevenload is trying to accomplish this weekend. Twenty months after its foundation the company based in Köln is getting ready to unleash platform version 3.0 which is meant to provide the technical basis for future expansion as founder Ibrahim “Ibo” Evsan explains in an interview at (German) media news service DWDL.de.

In such a transition situation a Web company has two fundamental options.

1. Turn the big switch from one minute to the next and see what happens. Even most diligent testing will never prevent something bad to happen and features (or the entire platform) to malfunction. Huge numbers of user complaints would be the result and the helpdesk would have a hard time appeasing people. Not to mention the negative buzz in blogs and forums. Microsoft does the equivalent with every new version of Windows. We know what happens then.
2. Open the virtual doors to users and let them participate in what happens during such a major technical overhaul phase. As most of us aren’t hardcore IT folks, we can’t really imagine what’s behind “rewriting the entire software and migrating the platform to the next generation of hardware and app servers”. So why not explain as you go?!

So option 2 is what sevenload went for. And as far as I can tell at this point it’s working out nicely from a PR and community relations perspective. Here’s what’s happening since Friday night (the team is 50 hours + into the migration process now):

First sevenload put their site into “read only mode”, meaning that users can only view existing content such as videos, photos, audio, podcasts, entertainment channels, etc. That’s limiting the user experience, yes, but the communications team explains why this needs to happen in the company blog. The corporate blog is the pivotal point for everthing “official” that the user base needs to know and comms manager Mike Schnoor makes sure to post status updates on a regular basis.

Now that the developer team is working night and day to deploy the new platform, it’s a good time to build some anticipation for the new things to come, so posting screenshots of the new website design and UI details is a great idea. Asking for comment helps involve the users and this openness has brought sevenload a good bunch of positive comments, buzzing with anticipation.

Meanwhile, founder Ibrahim Evsan gives some impressions of how the team is doing and how everyone is working hard to make the transition phase as short a possible. His personal blog is the stage for this peek behind the scenes, complete with photos and short video bits (hosted on YouTube for the time being). It makes the process a lot more transparent and shows that it’s humans after all who make the transformation happen, with very human needs such as sleep. In fact key developers were sent to bed by their boss, he tells us, to reload some energy before taking the last turn before the finish line. Ibo uses Twitter to let his 340 follower know what’s happening, too, linking to his latest blog posts. That helped spread the buzz in the German blogosphere beyond editorial media sites like DWDL and Turi2 into blogs like Cem Basman’s and this one.

But what if things don’t go as planned? In fact, the original plan was to go live with the new site on Saturday night. Come Sunday morning, some users started getting impatient in their blog comments. Once again, time to explain on the blog what exactly is happening and why things are much more complicated than just turning a switch somewhere in the server room. Commentators still appreciate that and encourage the sevenload team to hang in until things are all set up. Meanwhile Ibo gives some insight into the new features.

All in all this is a great example of how PR and community relations can and should work these days. Openness and transparency is not just lip service here but actually lived and breathed with every tweet and post. Fingers crossed Ibo, Mike and team that everything goes to plan!

By the way, the business implications of this relaunch are very interesting, too. Ibo mentions in his DWDL interview that sevenload will be able to embed YouTube content and even make it searchable if the user whishes to. Why would an video service do that, embed an obvious competitor’s content? Now that’s something for another post. Maybe later today.