Of late I've become consumed with the idea of video and the Internet. It's a harking back of sorts to my early days along with Ken Rutkowski when we were working on a content company called Plus Media back in the 1.0 era. So now that broadband, even mobile broadband and yes, even in-flight broadband has become so much more affordable, I've decided to make the slight right turn and include more coverage of Video in VoIPwatch. Heck, I don't have to change the name and video and voip, especially video conferencing are already parallel industries of sorts.
One of my former clients, Peter Csathy who successfully sold SightSpeed (his third exit in this decade) posted yesterday argues that the case for Video is not all about direct revenue from ad sales, but via more indirect methods.
I agree. For years I have said the basic Internet Ad Model is broken (like email) and that it was cooked up by the ad sales folks who used the only model they knew would work with Media Buyers and Planners easily. The CPM model. Over time this got perverted into such things as Cost Per Click, but everyone lost sight of the Internet (only the web) as a Direct Marketing model (other than of course the Nigerians who turned the net into their most fertile feeding ground.)
As Peter points out, there are many other ways to make money off of video and when you blend audience with video you get $$$. That reeks of the Direct Marketing model, ala QVC on TV, which though available to the masses, is really targeted programming, the same way that infomercials are. That's why web sites which focus on the infomercial market do so well, and why sites that use video as parallel content (i.e Faithful Friends and Dr. Fosters and Smith Pet Products) do so well.
In this model, it's not "ads" that are driving the value of the video production, but the "audience" who shops and buys. Ergo why Csathy's argument floats like a boat. Video is not "web surfing" though web surfing brings it to you. Video is far more compelling, engaging and creative. My point is we are entering the era of not only talking head content being produced for the web, but an era of compelling content, with high production value, added information components and far more professional looking video such as the content produced by pal David Spark and his Spark Media Solutions.
David "gets it." And Peter sees this same opportunity. And just like the folks behind Faithful Friends, my longtime colleague Tony Loiacono, none of them are barking up the wrong tree.