While the Writer's Guild is on strike over Internet residuals, this is a good time to talk about the role of video over the Internet for most content organizations. Now that CQ Politics has launched, multimedia will soon be on the way, so it's been on my mind quite a bit. Here is what I think content producers--and here I mean journalism, but it probably also applies to the entertainment industry as well--need to keep in mind:
You're not going to make any money off Internet video.
In the traditional sense of "making money," at least.
This doesn't make the writers strike any less reasonable--John Rogers explains that they're just trying to avoid the mistake they made when DVD emerged--but probably should be foremost in the mind of print or old-media types who are trying to adapt to Internet trends. Stick with me.
Recently the Escapist's Russ Pitts told Ars what most online video services probably already know, which is that people are going to steal your stuff. Best case scenario is that they steal it because they love it, and they put it on YouTube and hawk your web site for you. Worst case is that they steal it and rebrand it and find ways to make money off it. The reason that this is the worst case is because online video (at least as we currently understand it) only acts as a loss-leader, getting people to watch the ads you're running or look at your other content (which, in all likelihood, pays for itself with ad revenue in turn).
As an almost unrelated note, let's make the point that you can't stop people from stealing your content. You can make it a bit more difficult for them, but this will probably require annoying your legitimate users. And since your video is, as I just said, a loss-leader, you can't afford to annoy your users. The Bank always tried to protect itself with B-SPAN by choosing to only stream RealMedia, which drove lots of people (including the production team) crazy. We could get away with it to some extent, because A) making money was not our goal, when all was said and done, and B) we usually gave the files to anyone who asked nicely. But that's not an excuse, and it doesn't excuse the attempt.
In any case, for those organizations who do have an actual profit motive, this whole chain of reasoning seems to only gradually become clear. In all the discussion about YouTube and web distribution, those who do not understand that video is a loss-leader for other projects are destined to be shocked by the practical implications of the technology (i.e., that running video online can be both expensive and logistically complicated). This leads to complaints about the Internet and the dire state of online publishing, all because they're asking the wrong question.
The real question of online video is not "how do we get this to make money?" It is "how do we produce video that will get people to come see our other products, which do make money?" or possibly "how can we use video to build brands that we can later leverage for actual money?" The answer to this, as with most online content, is to make really great, captivating content (which is easy to say but not so simple to do) and then give it away--and make it easy for other people to give it away. If you can add embed codes, do it. If you can make it available for download, do it. By all means, use standard delivery mechanisms. The easier it is for people to include your video (with credit and linkage) in a blog post or a web page, the more likely they'll do that instead of stealing it, and the more likely that you'll see those eyeballs eventually make their way to the pages that actually pay the bills.