Economy affects online video

Sorry for the lack of posts for the past couple of weeks – between some horrible bug I got (probably as sick as I’ve ever been in the developed world), my in-laws visiting (thanks for the baby help but a lot of people to have in one house), and my sister giving birth (congrats Amber), I had to take any additional time off for the sake of sanity.  But that’s all over now :-)

Just read an interesting story on TechCrunch this morning about MTV pulling the plug on embeddable videos. While it turns out that this isn’t quite the case, MTVN representative Mark Jafar noted that:

The only thing we’re pulling back is fully open access to our music video API, and it’s purely an issue of economics. Every music video we stream through the API costs us money due to our deals with the record labels, regardless of whether an ad is attached or not. So, allowing developers to use the open music video API can be a money-losing proposition for us. However, we’re absolutely open to extending the music video API to third-party publishers who are willing to work with us to monetize.

One promising thing I see from that response is a recognition that it’s not about protecting the content per se, it’s about being able to monetize it in a way that provides real value to the parties involved (although I would note that there seems to be a lot of parties involved in some of these things – still too many middle-men, see digital music industry struggles). So fair enough – people have to get paid.

However, it would seem to me, given the enormous number of ways that content can be linked to/from online, that there’s got to be some more creative ways to deal with situations like this than just attaching ads. Just one example, given the music context here, would be to link out to purchase sites for the music involved (kind of an Amazon affiliate thing)? You’d want to make sure this could be done in an elegant way, and maybe this is being done somewhere else (let us know if you have any examples), but it is surprising that an industry with such an easily electronically-sellable product (i.e. music) can’t figure out a little larger monetization pool than direct advertising.

In any case, it is nice to see that they aren’t shutting the whole thing down (although it seems the are redirecting viewing to their site), they’re just trying to find a way to pay for it. Again, fair enough. Any readers have some ideas about how companies can monetize video content online outside of the traditional direct ad model? As always, let us know in the comments.

7 Responses to “Economy affects online video”

  1. Nathan D says:

    How about direct advertising? :D I was thinking this was a no brainer – I don’t know how much MTV would actually charge for embedding videos, but if a company were to do so, and get site hits up, people will pay for advertising. Look at myspace. Making multi-millionaires out of kids who can use a program to write HTML code to design a Myspace layout. Advertisers pay $$$ if your site’s getting a million hits a day – no matter what you have on it.

  2. Jeff says:

    It seems like they are doing this, note the line: “regardless of whether an ad is attached or not”. I took this to mean that they can’t get enough advertising revenue to support it but maybe I’ve misread (as that does seem surprising).

    Who knows, maybe that’s just an excuse they’re using (or maybe there are some limitation b/c of the labels) but, in any case, you’d think that some creative monetization types would be working their way up the ranks in these businesses and giving them some more insights into how to support online video.

    It’s kind of stunning how far big businesses can be behind the little indie guys on the web! :-)

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