Online Video: The Sequel

DECEMBER 29, 2004
By Heather Green, BusinessWeek Online

Video blogs are proliferating, thanks to improved distribution technology, and mainstream companies are taking notice

THE NEXT WAVE. Welcome to the latest Net phenomenon: video blogs, or what some folks call vlogs. Thousands of ordinary (and some downright nutty) people have begun posting a cornucopia of video fare online, from self-indulgent art clips and earnest citizen journalism to sly political commentary (see BW Online, 12/29/04, "Let a Million Videos Bloom Online"). Experimentation is the rule, and eccentrics outnumber serious practitioners.

But amid the chaos, glimpses of a commercial future are starting to emerge, including a revival of online video distribution, using vlogs to sell ads, and corporate sites designed to reach out to customers and suppliers. "Text doesn't get across all I want to communicate," says Lenn Pryor, who runs Channel 9, a vlog that Microsoft (MSFT ) set up in April to communicate more effectively with software developers.

Online video had a brief heyday during the late '90s, when the likes of Pop.com and Digital Entertainment Network started indie-flick sites with the aim of developing online movie distribution. Those dreams mostly ended with the popping of the Net bubble. But thanks to the blog craze and the proliferation of high-speed broadband, new pioneers are emerging. "Video on the Internet has been there for a while," says Steve Rubel, whose blog, Micro Persuasion, talks about publishing trends. "What vlogging is doing is making it easier to share and find."

LOG AND LOAD. That development is due in large part to the spread of better distribution technology. Broadband is now in more than 40% of online U.S. households, meaning roughly 31 million people can now stream video easily. Another boost has come from the widespread adoption of blogging software known as really simple syndication, or RSS, which lets people customize content. With RSS, users can choose the types of video they want to see and have it sent automatically to their PCs. At the same time, cheaper digital video gear and better copyright protection is convincing more folks to put their work online.

The vlog phenomenon has stirred up a wave of creativity at grassroots groups and companies alike. Online video sites, such as Undergroundfilm, are adding blogging sections. Ourmedia, an online showcase for digital content, is expected to launch early this month. It will provide free storage and blogging room for creative types such as New York indie musician Sam Bisbee, whose music video will be available for free. "You see video bubbling up all over the Web," says J.D. Lasica, who runs Ourmedia. "My thought was to gather it all in one place."

The proliferation of video is prompting commercial entities to take a second look. On Dec. 16, Yahoo! (YHOO ) launched an online search service that uses RSS tools developed with Ourmedia and indie site AtomFilms to collect videos from around the Web. Blogs that sell ads, such as consumer-electronics news site Engadget, are adding video product reviews. And Microsoft's Channel 9, which attracts 900,000 viewers a month, dishes up interviews and demos to stay in close contact with its key software-developer community.

THE RIGHT VIEWERS. For some indie filmmakers who weathered the video drought online, the Internet is finally starting to live up to its early promise. Peter John Ross posted short films on a handful of online video sites before they imploded in 2000. But he kept plugging away, using his own site and other survivors to promote his videos. "It's amazing how people will find your work," says Ross. The right kind of people, too: Ross recently got financial backing for his first full-length film.