Full Stream Ahead: AOL Hitching Its Wagon to Israeli-run Video Content

When AOL snatched up 5min Media, a small content company created by three Israelis, they kept the staffers on board. Now, these three men are at the forefront of the Internet's new video revolution.

Video may have killed the radio star, but if a trio of Israeli entrepreneurs has their way, it's only going to make the Internet stronger.

Ran Harnevo, head of all video operations for the Internet giant AOL, recently took the stage at the 2013 Digital Content NewFront, a star-studded event in New York City to explain the newest revolutions in online video. A whopping 200 million Americans watched video online at least once a month, and on the Internet's newest platform – the smartphone – streaming video is the single most popular activity.

Only seven years ago, Israeli-born Harnevo was working with some friends out of a garage to build an upstart company.

Their vision was to develop an Internet platform that would provide a short visual answer to every practical question. That business, 5min Media, was sold less than five years later to AOL for a cool $65 million.

AOL now has a library of 600,000 video clips, and rather than swapping out 5min Media's staffers for its own people, it kept the company's three Israeli founders on board.

Harnevo, who was the CEO of 5min, is now the senior vice president of AOL Video. Tal Simantov, 5min’s former chief marketing officer, is now responsible for marketing and strategy for AOL’s video operations; and Hanan Laschover, who was the chief technology officer of 5min, is the vice president for technology for AOL Video, despite the fact that he still lives in Israel.

The trio manages some 200 employees in New York and another 100 in Tel Aviv.

Harnevo was introduced to the crowd in New York by AOL CEO Tim Armstrong, who noted that a full half of the content on the Internet today appears in video form, and that portion is expected to jump to 90 percent in the future.

The Digital Content NewFront event last week was part of Internet Week New York in which companies such as Google, Yahoo!, and AOL made a huge effort to attract new advertisers to their video platforms.

According to Simantov, the television advertising market in the United States is valued at $65 billion a year. The Internet video advertising market is still only at $4 billion, but it grew 25 percent in one year and is on track to keep expanding.

Those attending the events had no doubt: This is a big-money market.

Sarah Jessica Parker of "Sex and the City" fame was on hand for the AOL event; she recently produced a documentary for AOL that takes a peek behind the scenes at the New York City Ballet. Other video programs on tap for the Internet provider is a series by It Girl Nicole Richie that focuses on, well, Nicole Richie; as well as a program called "Second Chances," hosted by the world's most beautiful woman (at least according to People magazine) Gwyneth Paltrow and her longtime fitness trainer Tracy Anderson.

AOL has also announced a documentary film on Napster, that dinosaur of the file-sharing movement that was once so beloved by college students everywhere. The film will appear in theaters and will simultaneously be released, with ads, on the Internet.

Also on hand at the event was Arianna Huffington of the eponymous Huffington Post.

The Internet is not alone in its revolution, Simantov told the audience – television is also in the throes of a major shift. Online video has shaken up the market, and now the two worlds, which previously functioned autonomously, are inextricably linked.

This means that major industry players are starting to revise their roles, with Netflix producing a series of television programs, manufacturers like Sony and Samsung providing content, and Google and Apple stepping into the television business.

AOL, he said, is keeping up with the competitors. "We are in second place in video viewing, after YouTube," he said. "YouTube has a billion viewers, and AOL has 61 million."

But the content itself is different: on YouTube, users make the videos, while AOL defines its content as premium. Simantov noted that clips on AOL are currently five minutes long but the plan is to make them much longer, and starting this year, the Nielsen ratings company will also begin applying its viewer surveys to their online videos. The result? Much better exposure to money and a faster way toward that big money that brought the audience into the event in the first place.

AP