Five Factors for the Success of Online Video

Written by Diane Mermigas

Monday, February 23. 2009 at 10:45 AM EST 1 comment

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Broadband video fortunes appear stalled between the economic malaise and the paradigm shifts to digital. Everyone wants a piece of the booming digital video action, but the best minds do not know how to fully monetize it, or how to make it ubiquitous or palatable to mobile screens.

Despite legal, technical, and creative tangles, streaming Web video is filling the pressing demand for moving images on the iPhone, PC, and BlackBerry. Options are as new as 90-second Flickr video sharing and Netflix Inc. ’s instant all-you-can-watch home movies and as long-running as eyewitness news from smartphone cameras posted to CNN.com.

It will take a global media village -- and all its content, hardware, software, and algorithmic tribes -- to discover and mine digital video’s full potential. Here are five factors shaping its future.

Video revalued
Emerging forms of advertising, e-commerce, pay-for-play, and interactive connections to target consumers will redefine video values. New video forms will be specific to devices, individual needs, and affinity group uses. Today’s broadband is limited by service, software, and site capacity, which enterprise players are learning to navigate.

NBC Universal 's decision to stream programs directly to Apple’s iPhone without iTunes is how the Internet bypass messes with commerce, digital rights management, and other nagging issues amid the latest turf wars between the likes of Hulu LLC and CBS Corp. (NYSE: CBS)’s TV.com. As access, transfer, and storage become more efficient and inexpensive, the value of video shifts from distribution to user relevance. The popularity of personal blogs and tweets point to the power of individual interests as a catalyst for creating and monetizing enterprising niche, community, and location-based content.

Video redefined
Discovering what plays well on mobile small screens will trigger a wave of commerce and convenience-based content reaching beyond pedestrian TV and film extensions. Functional video will move beyond mobile GPS store directions and coupons, and Yahoo Inc. (Nasdaq: YHOO) adding video to paid search listings. New pastimes will include video texting, participatory news reporting and Webisodes, and sending JibJab political satire e-cards between elections. More books will be consumed as an Amazon video adaptation (like Jeff Jarvis’ What Would Google Do?). Video games will make progressive role-playing mainstream. Consider the interesting, potentially more powerful ways individuals and organizations are integrating Twitter’s intimate microblogging with their own video to advance worthy causes like Twestival.

Social and e-commerce functions
Video’s value will be shaped by the quality of interactive engagement sparked between users and what interests them. Grassroots video created and shared in a purposeful framework one consumer at a time will be as valuable as commercial video pushed to the masses.

Developers are transforming “tweets” from 140 characters of text to video conversations on 12seconds.tv, Twiddeo, and Seesmic as explored on TechCrunch.

It’s about capitalizing on connections. Amazon’s gold standard is a social web of recommendations, reader reviews, efficient finability (the ease and accuracy of finding relevant info on the Web), and secure processing. Barack Obama's candidacy and presidential election provide a primer on using video-sharing, texting, and email to create cyber critical mass and effect change.

Relevant ad buys across the spectrum
Advertisers must create a coveted interactive loop with those seeking their products and services. Return on investment is sustained rapport and transactions with targeted consumers; not a 30-second flash. An artful approach that binds is even better. Some marketers already get it: See Electronic Arts Inc. (Nasdaq: ERTS)’s “Tiger Woods ’09 Walk on Water” and other YouTube commercials noted by VentureBeat.

The placement of fewer, premium-priced commercials in full-length streaming video on Hulu and Fox branded Websites represents static television tactics rather than an effort to forge new forms of digital interactive advertising.

New forms of advertising and marketing will require new mechanics, metrics, and standardized economics across all platforms and devices.

Video search and discoverability
Finding specific and related video must be an art form as much as a science. Managing and storing massive amounts of video (even in the cloud) is a maintenance crisis in the wings. Technical and legal snarls aside, YouTube’s trials with professional and amateur content partners bringing their own commercials and paid downloads have not brought Google closer to cracking the video monetization code. Federally funded universal broadband doesn’t guarantee a new mindset. MediaVest executive vice president Brian Terkelsen summed it up best at this year’s CES: “If we don’t challenge the industry to do things differently, we’re screwed.”