While the internet video explosion may have begun with user-generated content, the demand for professionally created and branded video is catching up. Though UGC is still hot, consumers are demanding more high-quality content from companies that specialize in producing compelling internet video. As this trend accelerates, distributing video across the web will become easier -- and increasingly more lucrative -- for entertainment providers and marketers.
An obvious advantage to distributing video to Web portals like YouTube is their popularity with video viewers. Companies building their own video websites must first brand themselves as consumer destinations for video. But by distributing content to sites that are already established as video storehouses, companies can capitalize on existing user bases, benefit from developed technologies and mitigate the expense of promoting their own video sites.
A perfect example is the Universal Music Group, which created a YouTube channel that hosts music videos from the label's leading artists and has generated more than 167,000 visits to date. The channel also feeds site traffic to the group's website, where visitors can explore Universal artists and, ideally, decide to purchase its music. Though businesses may have a hard time promoting their own video sites, the high consumer awareness of YouTube, Yahoo! Video and other portals means that companies like Universal can meet video viewers on their own turf.
The pros and cons of professional distribution
For companies that want to experiment with power of the major video portals, there are several emerging video sites and platforms that are bringing premium entertainment to the Web. Joost, Brightcove, TVGuide.com, and Next New Networks are just a few of the companies feeding the growing demand for Internet TV. There is also a tremendous opportunity to capture an audience with mobile video. Discovery Communications, for example, distributes dozens of TurnHere videos about travel and the environment to cell phones.
That is not to say that distributing video is without limitations. Companies that place video on YouTube, AOL or even platforms like Brightcove relinquish some control over the presentation and packaging of their content. Whether they are created by corporations or consumers, right now all YouTube channels look more or less the same. In addition, companies will find that their content represents a drop in the bucket when compared with the staggering amount of video available across the web.
The good news, however, is that as more businesses decide to distribute professional, branded video -- and as consumers demand more of it -- sites like YouTube and Brightcove will find more ways to separate professional branded content from the user-generated variety.
Finally, improvements in online video advertising will make distribution a more profitable venture both for entertainment companies and marketers. These improvements will be necessary for U.S. online video ad spending to grow to nearly $3 billion by 2010, a figure that eMarketer currently projects. For one, as the production costs drop for internet video, companies will be able to create larger video ad campaigns that more accurately target consumers. In addition, companies from TurnHere to Google now distribute video ads that actually engage consumers, inviting them to watch the video spot in stand-alone players. This capability makes viewing the ad a more interactive and welcome experience for the user, and will drive marketers' sales and clickthrough rates. And as marketers find more ways to earn revenue from online video, entertainment companies will also find it more cost-effective to create content for the web.
Going forward, the line between entertainment and advertising will blur as marketers develop internet video spots that consumers truly want to watch. Video ads can be sources of entertainment just like any other piece of web-based television; they don't have to disrupt the entertainment experience. The sooner marketers realize this, the sooner all companies will see returns on their video distribution.
Bradley J. Inman is founder and CEO of TurnHere. Read full bio.
