At the Contentonomics conference in Los Angeles on Tuesday, Ian Blaine, CEO of thePlatform, a white-label video management system, offered his view of where the online video market is headed and how media companies can thrive as online social interactions change the dynamics of video viewing.
Blaine said that 2008 has been a big year for online video, with 142 million U.S. consumers watching 558 million hours of video in July. It's been a big year for thePlatform, too. He cited comScore figures indicating that in July, thePlatform's clients had delivered 329 million videos, enough to rank third collectively overall in video delivery, behind Google's YouTube and Fox Interactive Media (MySpace).
That's a lot of video, but it's not enough for advertisers: They want to run their ads with quality videos and to avoid associating their brands with amateurish cat videos and chronicles of drunken dorm antics.
The challenge for Blaine and others in the online video industry is developing the market so that it can support the ad dollars that want to participate.
The foundation for market growth has been built, Blaine said. The price for content delivery is coming down, thanks to the competition among content delivery networks (CDNS). There are proven ad delivery systems, in the form of DoubleClick and Atlas, and a slew of new ad companies are extending what advertisers can do. Content syndication has taken off, giving online video distributors much greater reach, and the user experience has gotten much better. And the technical platforms for video delivery and management have matured.
What remains is increasing video viewership and figuring out how to monetize those eyeballs.
Critical to that process, Blaine insisted, is finding the right length of leash for quality content and leveraging social engagement to promote it.
"The longer leash you put on your dog, the happier your dog is," said Blaine. "Your dog" in this metaphor is not the archetypal cat video; it's the sort of high-value content that media companies have been reluctant to publish online. "The right balance of control is one of the keys to seeing this business grow," he said.
It should be noted that video control and tracking is what thePlatform does.
Blaine's advice reflects a bet made by Comcast, in the form of its purchase of Plaxo, an emerging social network. Comcast also owns thePlatform and the cable company is working toward integrating social networking with video viewing, both online and through the set-top cable box.
Blaine's view is that social media can create a virtuous circle around entertainment, whereby social interactions increase viewership and revenue.
Blaine invited Joseph Smarr, chief platform architect at Plaxo, onstage to emphasize that point.
"The whole Web is fundamentally going social," said Smarr.
The reason is that the social graph has become portable. Social network information is increasingly available through APIs for use across different Web sites. "The fundamental building blocks of identity... how do I bring my friends with me... these fundamental building blocks are opening up," said Smarr.
In preparation for letting content run on a longer leash, Blaine recommends that media companies: invest in describing their content with metadata, to make it discoverable; make it as easy as possible for consumers to engage with content; engage with advertisers to help them understand the opportunities in your inventory; and pick a few worthy partners, because going it alone isn't easy.
To read more about Contentonomics, go to Contentinople.com.