Don't count on it. It is true that watching web video has become mainstream. More than 145 million U.S. web users watched 13 million videos in February, according to ComScore. But consider, for a moment, that 41% of those views were on YouTube, which can sell advertising against only a very small fraction of the video in its system. In more optimistic times, eMarketer estimated online video would get $850 million of the total $24 billion online ad market in 2009. But getting to that figure this year is far from certain.
With ABC, NBC, Fox, CBS and Viacom already online, isn't it just a matter of time before all TV is available online?
It is just a matter of time, but it won't happen soon, and there promises to be plenty of skirmishes and failed attempts along the way. Broadcast TV has thrown its lot in with internet distribution -- with the notable exception of the CW -- even though a web viewer of "Desperate Housewives" brings in just a fraction of the revenue of the same viewer watching on TV. For cable networks, web distribution is more complicated. They risk not only ad revenue but affiliate revenue from cable and satellite operators, which represents half their business. That NBCU and Fox pressured Hulu to keep shows off the web service Boxee is instructive. (Boxee is a browser built to facilitate viewing web video on TV sets.) Right now, cable TV's best idea is some version of Time Warner's "TV Everywhere," which would allow viewers to watch shows if they can prove they have a cable subscription.
Hulu is No. 2 in video, so is it game over for Joost, Veoh, Fancast, TV.com and the rest of the aggregators?
No, not by a long shot. Right now Hulu has the upper hand for two reasons: As a joint venture of NBCU and News Corp., it got exclusive access to their catalogs of TV and even some films. Second, the Hulu team executed the technology well and nailed the consumer experience. Hulu just works better than other sites, and that's big. But Hulu will lose some of that advantage when it loses exclusivity on NBCU and News Corp. content at the end of the year, and it seems likely there will be at least a half-dozen players with a critical mass of TV content to compete for ad dollars. That said, some of the less-differentiated video players, which burned through a lot of venture capital, are likely to be consolidated in the coming year.
My brand isn't compatible with YouTube, and I want to do something more innovative than 15- or 30-second spots on Hulu. Do I have options?
Sure, but they probably won't be any cheaper on a cost-per-thousand basis. Web producers such as NextNewNetworks, For Your Entertainment, 60 Frames and even Ashton Kutcher's Katalyst Films are producing original web series for brands. Blip.tv is a trove of semipro and independent series, some of which have incredibly devoted audiences. Blogs such as Boing Boing have produced video for brands including Virgin America and Frito-Lay. The overall investment here is small, but so are the audiences. It's a niche strategy that could work for some brands.
It's 2009, so I should be able to do a single, targeted video ad buy across the web, TV, video on demand and mobile ... right?
Yes, you should be able to. But no, you can't. Myriad companies are attacking the problem with different technologies and strategies. Sadly, none of them work together. Six cable networks formed Canoe Ventures to create a system to make targeted ads on cable networks a reality, but there's still no product. Microsoft's Navic, OpenTV, Visible World and Invidi target the set-top box. Google is working on getting more network inventory for its Google TV venture. BlackArrow makes technology that would allow ad insertion in VOD. "There is no network that ties them all together," said Daina Middleton, senior VP, Moxie Interactive. "You basically have to piece the media plan together yourself."