The online video era has entered into its second of what I'd suggest will be three phases:
Phase 1: People are thrilled to watch videos online easily and for free. YouTube owns this, and this is the prevailing model. Viral video makers are currently motivated by fame not money. But as I mentioned in a previous post, they're leaving money on the table.
Phase 2: Good content owners want to be compensated for their work– or at least share in the ad revenue. Several start-ups have entered here, and Revver has my favorite offering here. Other companies (like LiveDigital) use "points" that will eventually equate to something for people that are active on their site (mostly because they posted content that gets views, comments or ratings).
Phase 3: People get paid to watch videos. Sounds weird, doesn't it? But I see two potential models emerging. Free videos with very polite, concise ads (15 seconds every third video seems right). Alternatively, what if a site gave its viewer something for sitting through more ads? Call it "pay for eyeballs." Maybe it's not money but "points or credits" worth something. Have you noticed how most online video sites track how many videos you've viewed? That number equates to revenue for a site that sells ad space by view, click or time.
As proof that I'm not "off my rockers" for phase 3, let's look at this recent story about Virgin Mobile exchanging free talk time for participation in advertising or surveys. Terrific idea- we can be bought. Times are a changin' for interuption advertising as we move into online videos and videos on demand. Contextual ads are the first step- don't waste your money trying to sell me a car because I'm not on the market. But send me an ad for a new technology toy <$100 and I'll consider that a gift. But the New World of Advertising will likely require intermediaries to share advertising income with the target. In my day job I buy online ads, and I know I'd be willing to pay a premium to interact with people in my target audience.
Save this post. Maybe I'll be embarassed about it in 12 months. Or maybe I'll look like a friggin' futurist.