Google Video potentially offers business model options

By Charlene Li

Word on the “street” is that Google will be offering a video player (John Battelle has details). Right now, the player will show only video that is in the Google video index and has been marked “free”, but as people have been uploading video to Google, they have the option to also set a price. So I have a friend who has a small business producing “how to” DVD training videos for non-technical consumers (such as how to install a computer home network). Instead of pressing disks, he could be uploading and selling the video on Google.

But I want to propose another business model option – advertising. What if instead of charging consumers he could get advertising dollars from equipment manufacturers and high speed Internet providers? Hmmm, Google has this little thing called AdSense that it could easily tap for advertising – I’ve written in the past how they could expand their text ad networking into rich media and video.

And wither competitors like Yahoo!, Blinkx, and AOL/SingingFish? I believe they are aiming primarily at traditional content producers that are willing to put their “quality” videos online – the winner in that game will be the one that’s most skillful at convincing the producers that they won’t lose their shirts in a deal. Meanwhile, Google will be actively soliciting the millions of smaller, lesser known video producers scattered in and outside Hollywood.

This draws me to another idea – I was at a non-profit last week for the premier of The New Heroes, a PBS production that features 12 social entrepreneurs (airs in two segments June 28^th and July 5^th – it’s fantastic!). The guest speaker and narrator of the film was Robert Redford, a social entrepreneur himself in that he founded the Sundance Film Festival as a way for independent voices to be heard and showcased.

But even getting into Sundance and other film festivals is tough these days – and getting picked up by a studio is a long shot. So imagine a day when a young video director and her producer “premier” a movie online and develops a strong following. Rather than having to court distributors, measure opening weekend box office takes, and negotiate DVD distribution, the movie could stay online for its entire life.

Comments

[Martino Mingione]

I agree with you that advertising is the business model that this (type) of platform/service will grow toward.

In the early days of cable VOD, Comcast and Time Warner found out early on that people were unwilling to pay 'per viewing' or 'subscription fees' for their video on demand content. I remember attending one Comcast meeting a long time ago in which one significant worry disucssed the vital role the UI played in customer acceptance of VOD. In brief, people were not clicking to the free VOD content because they were worried that each click meant larger cable bills and they were not taking any chances.

Ideally, the advertising model that would work best for non-linear video is very similar to the ROI based models used generally on the Internet. A VOD ad model could even begin to resemble AdSense: context sensitive placement.

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In brief, people were not clicking to the free VOD content because they were worried that each click meant larger cable bills and they were not taking any chances.