In the last week alone, here are some of the online video announcements:
– Former TV execs start web video company, 100 sites planned
– MTV Networks to build thousands of new websites
– Hearst to launch 12 video sites supporting key magazines
– Hollywood agency may launch video sites for each star
You get the idea. Here’s how I see it: As more niche online video makes its way on the web, it will draw large Long Tail audiences who are excited to find video programming that fits their unique interests. In two or three years, a good chunk of this online video will be watched on TV sets, and traditional TV ratings will experience even more downward pressure. The sheer volume of online video (inventory) will push down ad rates, ultimately leading to consolidation and the creation of vast video ad networks. Long-form advertorial and advertainment video will become the norm, but many online video projects will be abandoned because of low return. And to complicate matters, more and more talented people will produce video for other reasons than money, and this will throw a wrench into the economics. The best advice for media companies? Move aggressively into valuable niches. Keep costs low. Network niches together for maximum return. Distribute and share widely. And get ready for a wild ride.
