Whatever happened to video? The rich streaming content that was supposed to be the killer application for broadband goes largely ignored by Web surfers. Video-centric startups like Digital
Entertainment Network and Pseudo.com were among the first casualties of the dot-com dustbowl of 2000. Even as bitter rivals Real Networks and Microsoft improve their technology – their codecs now deliver near-VHS quality, half-screen video at 30 frames per second or more – the incentives to provide video content over the Web have dried up and blown away.

You can’t generate TV-sized audiences on the Web, so you can’t charge TV-sized prices for ad slots. In which case, many unimaginative entrepreneurs are wondering, ‘Why bother?’
This is very bad news for carriers that invested in broadband in the hope that demand for video would persuade consumers to sign up.

The search for the killer application
Part of the problem is that content providers tackled the Internet video market as if it were simply another way to deliver television. The Internet is never at its best when it is mindlessly replicating functionality that is already available elsewhere. Consumers are pretty conservative – they don’t change the way they consume things unless there is some compelling benefit. Selling broadband as a new, improved TV delivery mechanism makes no sense to them – they’ve already got a television, and they like it fine.

“Consumers are unsure right now what broadband is good for,” explains Joe Laszlo, an analyst with Jupiter Communications. “Sure, it’s the World Wide Web faster and always on, but there needs to be more of a message. Even among users with broadband, relatively few watch video. In part that’s because quality isn’t that high. Compelling video formats haven’t been found yet. It needs to be something short, punchy and designed for broadband, not just re-purposed from TV.”

It’s worth noting that the consumer market is only half the story. In the business world, broadband is by and large a fait accomplice. “Let’s assume that there is already broadband in the enterprise, because there is,” says John Parker, senior analyst for multimedia and content infrastructure with the Aberdeen Group. “The question is, how are people going to use it? Will there be video? Yes, if you can find a compelling application; if you can integrate it with existing databases; and if you can manage, track and share its use.”

Parker’s words hold a vital clue for anyone interested in the fate of video on broadband networks. There are things you can do with Internet video that you simply can’t do as easily any other way. You can archive material. You can add metadata – brief summaries of the contents of a file – to aid search and retrieval. You can integrate short video clips into larger collections of material. Instead of being the medium’s be-all – as it is with television – video on the Internet becomes a single element of a larger whole.

Two success stories
Exactly what that larger whole might look like, no one yet knows. But chances are it will resemble some of the early successful applications of Internet video. Everyone praises CNN for its seamless blend of text, graphics and clips from TV. But two smaller sites, AdCritic and iFilm, are pursuing almost equally innovative strategies, making the most of far fewer resources.

AdCritic is, as its name implies, an alternate delivery vehicle for TV ads.
Visitors to the site can search for a particular ad and find out, for example, that the band Hooverphonic provided the soundtrack for VW’s ‘Vapor’ Beetle commercial. This use of archiving and metadata benefits the consumer, the car company, the creative team and the band. AdCritic has also won praise for granting a new lease of life to ads considered too ‘edgy’ to run on network TV. A Sony ad that was canned by the networks has had over a million Web viewers – probably more than would have ever seen it on television.

Laszlo points out that a site like AdCritic is unlikely to generate the level of traffic that would let it survive on Internet ad revenues alone, but the company also makes money by running online focus groups and selling viewer statistics back to the ad firms and their clients. In a similar vein, a Hollywood-based site called iFilm distributes short independent films for free on its Internet site while charging networks, film festivals and airlines for offline distribution. The wild popularity of one short, called ‘405: The Movie,’ earned its directors a contract with Hollywood behemoth, Creative Artists Agency.
The number of viewers for ‘405’ started small and snowballed, after happy viewers emailed the video’s Web address to their friends. This demonstrates yet another unique feature of the Net: its pre-eminence in viral marketing. As Laszlo puts it, “One of the things the Internet has always been good for is the pass-along ‘You have to see this’ grass-roots sort of stuff. Every so often there will be a video clip that just by word of instant messaging achieves success.”

What the future holds
The lesson for Web video programmers is to make the most of the singular abilities of the Internet: the power to store, search and retrieve; the power to collect and collate viewer information for sale; the power to narrowcast independent and edgy content to the widely distributed but sizeable audience of people who might actually like it. The big challenge is to forget about reinventing television. Don’t think passive viewers; think, celestial cinema, and all the possibilities that haven’t been thought of yet.

The flip side to video-on-the-PC is Internet-on-the-TV. It needs to be emphasized that the idea of convergence can be misleading, since these platforms serve two very different markets. Broadband video consumers tend to be technically literate, ‘must-have-all-the-latest-toys’ types, whereas the ideal user for an appliance like WebTV is someone who doesn’t already have a PC – and doesn’t necessarily want one. WebTV in particular was a huge hit in Florida, where the boxes were bought as gifts for retired parents. In markets in Europe, where PC penetration is far lower than in the U.S. and where consumers have shown they are willing to pay for information services, the set-top box looks poised for outstanding success.