MappingTheWeb //

It’s a pretty broad question but many are asking it. In order to solve it and analyze future trends, we need to look at different areas of the online video world. For this reason, I have broken this post into a series of paragraphs outlining what I think we can expect from this exploding industry.

Content: The old Internet adage is true - content is indeed King. Without good video content, the eyeballs won’t come. And it’s not just about quantity, otherwise I would proclaim all YouTube competitors as being dead in the water. It’s also about topics, themes, and categories. This is where I see opportunity for niche sites to step in capture a chunk of the pie. Pornotube, for example, bases itself around the YouTube model, but focuses on a ‘certain’ niche. Metacafe prides itself by only adding a small number of highly-viral videos to the site everyday.

This is a trend we will continue to see not only in the video category, but also throughout the web as the Internet giants face a future, fragmented onslaught.

Two more tidbits to add from a content perspective: more and more traditional industries will begin or continue to leverage online video as a tool and selling feature (i.e. real estate, tourism, artists, etc..).

Finally, new content providers will make their mark on the industry. Already, TV networks are beginning to realize that they cannot combat this trend. Online video and IPTV are here to stay. Expect them to flourish. Proof lies in the actions of the networks. Most now stream full-length TV episodes from their websites. I would wager that other content providers will follow in these footsteps. But how will movie studios react and strategize?

Advertising: This obviously seems to be the revenue model of choice for the majority of video sites. But is it sustainable? If bandwidth charges surpass advertising revenues, the likely culmination is ugly. Expect all types of new advertising ploys on video sites including interstitials, pre- and post-roll, and unconventional banner placements.

Other revenue models: Ha. Do they exist? Definitely. A previous post described numerous ways YouTube could monetize the site beyond advertising. They include subscription services, affiliate programs, content sales (i.e. the iTunes for video), branded product sales (i.e. YouTube mugs), directory services, or even licensing. Other sites will need to evaluate this situation as revenue seems to be a big deal in the expensive, high-bandwidth world of online video.

Copyright issues and DRM: Bahhh… copyright, schmopyright. This stuff bores me to tears. All I can say is that if you think the TV networks and movie studios have their knickers in a knot, you ain’t seen nothing yet. Expect the TV giants to move first, as short clips are easily visible and prominent on many websites which makes for an easy case in court. Next, the studios will make a push against P2P networks and torrent sites. I expect this to be much less successful as it is less visible, hence harder to combat.

Companies to watch (or watch out) for:

• YouTube (duh)
• Joost
• Brightcove
• Motionbox
• CurrentTV
• Blinkx
• evokeTV

…to name a few. You can add your up-and-comers to the list…

Some of my predictions (oh boy):

• YouTube will succumb to the same fate of Napster; no more illegal content kids.
• Joost will get bought over by a large TV network, further adding to the wealth of Zennstrom and Friis.
• Bandwidth will get cheaper, bittorenting will continue to grow, and more and more TV shows will be available for streaming online (these are my obvious predictions).

In this booming online industry, timing and execution will be key to a successful campaign… mixed in with a wee bit of luck.

Over the past week, Joost has provided me with 4 BETA invitations to send out. As I already had a list of people, they were quickly dispatched. However, I expect to receive more in the very near future. So, if you are interested in trying out this innovative, new Internet TV tool, please e-mail me or drop your e-mail in the comments (in some form of counter-SPAM method, i.e. aidanhenry-(AT)-hotmail-(DOT)-com for example).

For those unfamiliar with Joost, it is the new project of Niklas Zennstrom and Janus Friis. These are the geniuses who brought us KaZaa, followed by Skype. Their new venture promises to change the way we view video on the net and revolutionize TV forever.

For more info, view my previous posts on the company:

• The Venice Project on Steroids: Joost
• The Venice Project - Now in BETA
• Inside The Venice Project - Screenshots Included

Amidst the new web landscape, YouTube is a well-known success story. They’ve been able to generate millions upon millions of video views per day. Aggregating the eyeballs has not been the problem thusfar. But in order to truly classify this start-up as a true success, substantial revenues need to be realized, as a considerable ROI is the end goal.

Much talk seems to keep surfacing around how YouTube plans to monetize its collossal traffic. Advertising is always an option, albeit not always the most appropriate or suitable.

There are six basic Internet revenue models. Let’s explore how YouTube could leverage any or all of them…

Advertising: This is the most obvious and widely-accepted model. Nevertheless, within this category, there are several sub-categories, including text ads and video ads. Up until now, YouTube has only opted for text ads. But pre-roll, post-roll, or interstitial video ads may be right around the corner. Many video sites already display these ads, so it’s nothing new or extraordinary. YouTube may be hesitant as they don’t want to ruin the user experience that they’ve come to be known for. Moreover, YouTube could implement an e-mail ad campaign, whereby sponsored/ad-supported e-mails are mailed out to users on a daily, weekly, or monthly basis.

Subscription: The video giant could force users to pay a small monthly fee to access certain parts of the site, or perhaps high-quality content. The subscription would eliminate ads and provide better streaming quality. It is not my belief that the entire site should be subjected to a subscription-based model, as this would cause a user back-lash. But by providing premium features at a small cost, this may prove to be a lucrative revenue stream.

Affiliate: This category is somewhat similar to advertising, but focused more on CPA (cost-per-action). In other words, YouTube only benefits when a user buys or pays for the given service displayed on the side of the page. Pay-outs are much better than CPMs or CPCs, but less frequent. If YouTube can quantify and justify a case for an affiliate program, then it may be something to explore. My only concern is that the affiliate products closely reflect the content of the video being viewed. That way, the user experience remains optimal and the targeted affiliate link may be more likely to incite a user click-through.

Content: YouTube could undertake an endeavour similar to the Google Video strategy. In order words, users upload their videos and smack a price on them. If people download them and they sell, the user gets paid out and YouTube receives a commission on the sale. Think of iTunes for user-generated video content.

Product Sales: The idea of tangible product sales may seem hard to fathom at first. In any case, YouTube could make a big push to sell ‘everything YouTube’. They could sell branded T-shirts, mugs, hats, pens, or just about anything. Although this may not be the most sexy angle to choose, it’s a very low-risk, low-cost approach to business. As is the case with many of these Internet revenue models, many could be chosen and incorporated if executed properly.

Directory Services: The start-up could charge video directors/producers, singers, models, actors, etc… a small fee per video to appear in a coveted video directory. This designated area could be access by Hollywood directors, business executives, and talent scouts to identify possible talent and/or ‘The Next Big Thing’.

BONUS…

Oddball: The video powerhouse could sell or license the rights to its name. Then, a major TV network could use the label to launch a new reality show. For example, CBS or NBC could launch ‘YouTube Weekly’ - a look at the week in video, or better yet, the top UGC videos on the site. They could even incorporate an interactive component via online voting or the ability for users to choose the clips and programming they want to see - similar to CurrentTV.

Another oddball idea that YouTube already incorporates, to some extent, is paid product placement. This type of strategy bodes well with movie studios and products of a viral nature. These paid placements could be displayed on the homepage, category pages, or site-wide. The advertising company benefits from product/service exposure and YouTube benefits from a CPM standpoint or on a per-campaign basis. However, disclosure is extremely important and must be displayed in a prominent manner.

So as you can see, YouTube has more options than people care to imagine or consider. My guess is that the company will NOT choose one of the above, but rather a multitide. If incorporated in a seamless manner, revenue may soon be a far-gone problem for the company.

The other day, the official consumer name of The Venice Project was revealed: Joost. To be honest, the name sounds more fitting for Mark McGwire’s biography, but that’s a whole different story. Nonetheless, the new name is much shorter and easier to spell than its predecessor.

Furthermore, the new name sounds less technical and more consumer-friendly. This shift reminds me of the initial branding strategy of Skype. But hey, if it works, stick with it.

Having said all that, I finally got a chance to download and install the client today. Upon installation, the program opened right into a video that encompassed my entire screen, including the taskbar. Interestingly enough, the video viewing screen doubles as the navigation panel.

If you move your mouse while a video is playing, an navigational overlay appears while the video continues to play. A button at the top of the screen provides interactive information about the programme. Buttons on the sides navigate to your channels or own personalized area, which contains a chat box and optional plug-ins. Finally, the lower buttons provide video controls and settings, as well as a search box.

Currently, there are only 28 channels in the system. But my guess is that this number will increase significantly in the coming weeks, as the founders are reportedly in talks with some of the major TV networks. Thusfar, default content and channels have been supplied by such sources as MuchMusic, Warner Brothers, and Virgin.

Unfortunately, I’m still at 0 invitations. Let the hype continue…

I just received an early morning e-mail from The Venice Project crew. It’s official. The stealth start-up is now in BETA mode and testing can begin.

As mentioned a million times already, this new venture is backed by the same guys who brought us KaZaa and Skype. In this case, third time doesn’t need to be a charm when you’ve already struck big on your first two endeavours. Nonetheless, expect big things from this infant project that promises to “completely revolutionise television. Combining the best features of TV with the powerful social features of the internet, The Venice Project will give TV viewers, advertisers and content owners more choice, control and creativity than ever before”.

Sounds ambitious, but I have no doubt that if anyone can pull this off, it’s these chaps.

The BETA e-mail goes on to say:

“Today, we’re inviting you to take a sneak preview of our work and take part in The Venice Project’s first beta testing phase. This is a private, invitation-only beta test and the software is still in the early stages, but we would greatly value your opinions. We hope you’ll participate actively by giving us your feedback on everything from bugs to performance issues and suggestions for new features.”

With this BETA release, it appears as though the company is following a gMail-esque type word-of-mouth marketing campaign. In other words, they are offering a certain few a limited number of ‘invitations’ in an attempt to create an exclusivity buzz. This is out-dated and unoriginal.

Before I make a premature analysis of the program, I am going to take the time to immerse myself with its features and functionality. Stay tuned for an upcoming post.

In the meantime, here are some pages of interest that you do not need BETA or log-in credentials to view:

• Screenshots
• About
• Blog

UPDATE: As requested by a reader, please inform me if you would like an invite when I receive tokens. Do so by dropping me a comment to let me know.