Opinion: Video hyperlinks could be one way to capitalize on the popularity of online video.
With all the talk about online video today, one question still remains: What's the business model?
Sure, there's the obvious "pay-to-play" model epitomized by Apple's iTunes video store, sales from which have doubled since it announced that it had sold 1 million videos in its first 20 days of operation.
But while actually selling video online has its proponents (and rightly so), what kind of model exists where video can be provided for free (such as on YouTube.com) and still help make money for the companies proving it?
Some relatively recent developments have provided a few clues about how putting video online can be a moneymaker. First, an inadvertent technology demo provided by a 17-year-old girl video blogging about her recent breakup boosted sales of Logitech Webcams after people got a gander at the kinds of video effects that came built into the camera.
While the piece is a somewhat typical (and kind of boring, to be honest) online confessional, the earnestness with which the girl made the piece coupled with the humor provided by the effects resulted in a popular clip that probably did more to advertise the manufacturer than all the money Logitech had spent in the previous year.
Blatant advertising works too, when the "ad" is amusing enough on its own merits. A recent article on the MIT Advertising Lab blog highlighting the most viewed spots on YouTube tagged as "commercial" revealed that two commercials from Sony and Volkswagen have had millions of views to date. Even the trailer for Scary Movie 4 has had over a million views...on YouTube alone.
Still, though, all of these are basically nothing more than examples of using the Internet as a channel for on-demand delivery. A video online isn't any different from a video viewed on the TV, except for the fact that you can watch it when you want to. It's fairly amazing that some of the content is compelling enough that people actually go out of their way to watch it, but still ... it's pretty 20th-century stuff.
But that paradigm's changing. Just as online advertisers slowly realized that banner ads didn't just have to be digital equivalents of print ads and could be used to provide interactive experiences more compelling than print, some new developments in interactive video are starting to show us just what might be possible online.
Among the more interesting innovations of late are the video hyperlink ads being developed at MSN's AdCenter. These video ads combine video content with embedded hyperlinks that allow users to click on a particular part of the on-screen video, such as an actress' shirt or shoes, in order to pull up supplemental content such as pricing or ordering information.
The idea is that viewers watching TV online can have a seamless experience when they feel compelled to buy something they see rather than having to remember a URL and purchase later. It's the ultimate in impulse buying and provides a real and immediately measurable mechanism for advertisers to see the impact their advertising's having.
VideoEgg releases a kit that allows easier video blogging. Click here to read more.
In addition, because the advertising possibilities are melded with the content itself, the user ends up having a more seamless experience—one without commercial breaks. Of course, this methodology can end up making the whole experience a commercial, but that's a subject for another article.
Other folks are looking toward the future of convergence as a way of linking video and commerce.
Schematic's work with "Survivor Africa" combined enhanced content with built-in advertising and sponsorship opportunities that could be accessed through a set-top box.
The company's done other work with shows like "Queer Eye for the Straight Guy" (not referenced on the site, but something I saw in one of their live demos) where items shown in the show could be purchased using a remote control while the show was on.
While some of this stuff is still in development, a European clothing firm named Shai has a new catalog site up that demonstrates in a rather ... err ... graphic way just how video and commerce can be linked together in creative ways.
Its site combines fairly graphic porn (warning: definitely not something you want to pull up at work) with embedded hyperlinks to its catalog. See something being taken off that you might want to buy? A quick click on the "hotspot" displayed on the item of clothing and you can ... and the video even pauses as you make your purchase.
Overall, the state of online video business models today isn't that much farther along than the Web was back in the early days of the '90s. But as more and more people start turning to the Web to get their video content and advertisers start seeing the possibilities, it won't be long until these early experiments become standards in the industry.
In short, what works best online is that which can only work online, such as embedded hyperlinks in video content. Understanding that fact means we should start looking now at how to bring convergence, and viable business models, to the hype of online video.
Online Media 
