A Monster Week in Online Video That Wasn’t

It would be hard to dispute that online video had a pretty great couple of weeks in terms of raising consciousness about the format.

There’s announcement of the Hulu desktop app, which allows for lean-back viewing on your PC or Mac. And if you have even a scintilla of geek cred, that means lean-back viewing on your sweet hi-def plasma that occupies two thirds of your living room.

Then there’s the unfortunately named curiosity YouTube XL. “The Daily Mirror” put it so aptly: YouTube XL allows you to “settle back on the sofa to watch pandas sneezing from afar like never before.”

As all good things come in threes, there is also Lord Bombast of the Mavericks, Mark Cuban, sitting down with Kara Swisher, co-host of AllThingsD.com, to bemoan how Google’s purchase of YouTube effectively thwarted the online video market’s birth. “I think it’s a real disappointment to see where Internet video has come,” Cuban said. “YouTube has gotten so big, you are not a standard unless YouTube adopts you.” There’s no or very little monetization with YouTube. And while we all love getting our creative ya-yas out, it won’t do any good if nobody is getting paid.

Underlying these three news stories is the truth that the supposed formula for digital video success — highly customizable, targeted episodic content underwritten by advertisers in search of said audience — has not fully materialized. Hulu is essentially old-school TV with new-fangled distribution. You can now get TV on your computer through Hulu with significantly less advertising than you’d get on your TV.

Another reason this formula for success hasn’t materialized is that agency people don’t know how or don’t want to work hard enough to buy online. And the talent doesn’t really get what the brands want. None of this is intractable. But having worked at the intersection of technology and entertainment long enough, I know there’s now a degree of inertia settling in with this particular problem and it suggests that the this formula didn’t quite hit the mark.

In a world of rapid innovation, we may have to accept there just is no such thing as the year that Internet video hit.

Still, it’s not all gloom and doom. Pockets of things suggest that a new order, or more accurately a new organization of chaos, is beginning to coalesce. For example, the announcement by Carl’s Jr. that it is working with a series of Web stars to push out its new Portobello Mushroom Six Dollar Burger suggests a variation on the formula. And while YouTube stars have been used to pimp product before, this particular pairing touts not only the play views but also the pull of its participants, such as iJustine has with its respective Twitter and Facebook accounts.

One thing will be paramount as we climb out of economic morass and into a brave new world of convergence: Throw everything out. Everything. The old way of doing business is over. If you’re thinking about online video and trying to retrofit a distribution play, trying to leverage a talent only because you have access to it, or trying to buy based on margin versus quality, then you’re playing yesterday’s game.

The landscape is clearer than ever: There is talent. And you can have access to it. There is distribution. And you need to be intelligent to make use of it. And the real high note? There is an audience — and it is dying for your product. It’s up to you to figure out how to pull it all together. By either fumbling forward or taking a step back to really think about it, you will, at some point, hit one out of the park.

Join us for a one-day Online Marketing Summit in a city near you from May 5, 2009, to July 1, 2009. Choose from one of 16 events designed to help interactive marketers do their jobs more effectively. All sessions are new this year and cover such topics as social media, e-mail marketing, search, and integrated marketing.

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