Trying YouTube's Hottest Trick

“Embeddable video” allows media companies to control their content and keep ad revenue
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After months of watching Google's YouTube air video clips from networks' hottest shows, an increasing number of media outlets, from Viacom and News Corp. to the Wall Street Journal, are taking control of their content through the same tool that made YouTube famous: embeddable video.

Online-video rights are becoming more and more valuable. By 2010, at least $1 of every $10 spent on Internet advertising will go towards online video, according to research firm eMarketer. Content owners are trying to earn money from their content, wherever online it may appear.

The two dominant means for content owners to distribute video online are to sell it as a download, using such services as Apple's iTunes, or to stream it with or without advertising. These streams are often sold through online syndication services in order to better monetize their owners' investment. Companies are also allowing users to stream, or embed, those videos directly to their own Websites.

Embedded video allows users not only to share a video link with their friends but also to display the video on their personal Websites or blogs. By hosting its own embeddable videos, a company not only retains control of its content but can provide detailed ratings information to advertisers. It can also insert, remove and edit advertising as needed.

“Content owners are realizing that they have to open up their sites to consumers and to other content syndicators,” says Dan Rayburn, executive VP of StreamingMedia.com, a Website focused on broadband video, “or risk their videos' not being marketed by other media outlets like bloggers and those who can drive traffic and awareness,”

Many media companies are already seeing their clips embedded onto Websites, with or without permission, thanks to sites like YouTube. Through existing deals, selected clips from CBS or NBC can easily be streamed from YouTube and thrown onto a personal Website. But media companies have grown wary of Google's video site, and many are taking their clips and giving them away themselves.

The nation's largest business daily newspaper, The Wall Street Journal, recently began allowing users to embed its videos onto external Websites. With one line of code, a blog can host a Journal-branded video. Because the video itself is hosted and streamed by the Journal, not by the blog, any advertising money to be made from it goes directly into Dow Jones' pocket. This is done using software provided by Internet-video company Brightcove, which offers its clients easy video embedding in essentially an on-off switch.

Brightcove CEO Jeremy Allaire refers to embedded video as “unmanaged and uncontrolled viral distribution,” as opposed to online syndication, which the company also provides to its customers. The New York Times, another Brightcove client, is expected to allow unmanaged distribution in the near future.

Viacom joins the parade

Viacom is also toying with the distribution model. After having YouTube pull 100,000 clips that the media company claimed were in violation of its copyrights, Viacom announced that it would allow users to embed content taken from its sites like MTV.com and ComedyCentral.com. Users will have less reason to complain if they can't find Stephen Colbert on YouTube as long as they can still find and share clips of him on Comedy Central.

Increasing advertising is driving the movement. There has been “a groundswell of activity” in the online-videospace, according to Matt Wasserlauf, CEO of online-advertising company Broadband Enterprises.

The most common form of video advertising to appear online is the “pre-roll,” a short un-skippable clip added to the beginning of a clip.

Says Wasserlauf, “They're going shorter because pre-roll tolerance seems to be something shorter than 30 seconds.”

Promise of microtargeting

Though initially disparaged by consumers, the pre-roll is becoming prevalent. Even YouTube, which initially tried to steer clear of it, seems to be changing its tune.

YouTube co-founder Chad Hurley has publicly talked about the addition of three-second pre-roll ads as a way to finance payment to content producers.

Although it isn't quite possible yet, embedded video also promises the kind of micro-targeting of consumers that advertisers crave. For example, an upcoming version of Brightcove's software, according to Allaire, will allow companies to see just how “viral” their videos have gone and in just what communities.

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