Wednesday, April 19, 2006

Online Video Models Categorized and Simplified

DVGuru and MustSeeBlog have done nice jobs of comparing various video sites. Now let's start simplifying the online video "space" into a few key segments. Here's my first attempt to categorize the different existing and emerging business models. There are countless companies that are surfacing in each category, and certainly new categories will emerge. But here's what we have now:

Popular and Pirated: The Napster of online video is YouTube. There's no faster way to get thousands of people to see your stuff, and no easier place to find a random video. However YouTube will have to adapt its model to avoid getting "Napsterized." It's unsustainable to have volunteers steal content and upload it. Eventually lawyers will kill the copyrighted material, and original contributors will realize that while fame is nice, they'd like a "piece of the advertising profit" that YouTube generates.

Connecting Advertisers with Content Providers: Here's where Revver has a lock, and the $8.7 of additional funding will make it harder for someone to supplant it. I'm surprised that Revver isn't more saturated by content creators yet, and this will change when video creators awaken to the fact that they can share in ad proceeds. Revver doesn't need to be a video portal to facilitate a revenue share with content providers- the solution is agnostic to where the video lives. If Revver can do with Flash what it's done with Quicktime (keeping an ad linked to the video regardless of where the video lives) then it wins the race.

Video Search Engines: Blinkx.com is the best one I've seen for searching video content because it instantly transcribes the audio into searchable text. Google will buy or develop this internally inside the next 6-9 months. When they marry video search with contextual ads, it's going to be game chaning. Look first for a flash-delivered model with surrounding text ads. If they share that revenue with content creators, they could encroach on Revver's space. Keep in mind that eventually -- on television or at our desktop -- we'll be able to click any product in a video, identify the model and buy it instantly. Google is poised for this, but they need to evolve Google Video well beyond where it is today.

High Brow Production Sites: iFilm will persist as a higher-end video site for film students, "up and coming" film producers and more sophisticated production shops. I'm not sure what motivates the iFilm submitters except maybe the hope of being discovered.

"Enabling Technologies" for Video Sharing: JumpCut, VideoEgg, and Vimeo are nice examples of free applications that allow us to take raw video and share it... Without a lot of technology investment. I see these as the merging 3 worlds: digital video capture (from camcorders to cell-phone cameras), editing software (iMovie, Pinnacle, Adobe), and content sharing sites (like MySpace). These folks may not get eyeballs (unless they partner well), but they'll help us get our content from the source to the sites instantly. Competition for this space will be from both sides: prosumer video editing software and cell phone networks (Singulair and Verizon) who will want to differentiate in a commodity market by giving users the ability to push video content live without touching a desktop. Remember the bank hostage that made an instant fortune with her footage? These guys will enable part of that.

Online/Offline Video Contests: Howard Stern's recent contest awakened film and video creators to a new route to fame and fortune. Rather than paying a submission fee for niche film contests, a new road to discovery is to submit content to contests, create "citizen created commercials," or create content and submit it to the Break.com and StupidVideos.com sites. No variable fee for content creators based on how many people watch the video, but you get a decent check if they select your video.

Coming Soon: The artificial boundaries between television and online video are close to evaporating. We have temporary partnerships between online sites and television shows. VH1 and iFilm spawned Web Junk, and I'm hoping MTV and Revver bond. What's next? Watch for a network buying an online video site or building their own (which will take them far from their core competency). Currently we consume online videos hunched over our desktops and the rest of TV viewing is done from our couch watching network or cable TV. Video-on-demand and the age of TiVo will change that. How long before Comcast or TiVo allow me to search for amateur video work (veted by someone and with Google-like searchable)? My aching back looks forward to this.

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