I'll Be Watching

WHY SHOULD YOU, AN ONLINE marketer, care about companies like Google and Apple selling video downloads over the Internet? Because I do.

I'm speaking of myself as a typical Web consumer, that is. Over the past few months, I've gone from a position of pure skepticism on downloadable video to that of a devout convert. And I haven't even bought my first video.

The evolution of my thinking ran something like this:

Stage 1: “Videos for sale? Nice for the pre-teens, now that MTV isn't showing music videos. But no big deal to me.”

Stage 2: “That Apple video iPod is one nice-looking gizmo. But my old iPod is doing fine. And how good can the resolution be on that small thing?”

(Quickly followed by) Stage 3: “Hey, my iPod's getting full. And the battery's not holding a charge so well anymore. Might be time to replace it.”

Stage 4: “You know, for a small screen, that picture's pretty damn good.”

Stage 5 (On the tarmac at LaGuardia, row 14 seat B, 45 minutes into a flight delay): “The paper's read, the crossword's done, and I'd give my eye teeth for some distraction from that crying kid. What the heck are eye teeth, anyway?”

Stage 6: “Hey, I can set up Blinkx.tv to send BBC or CNN news about the Winter Olympics to my PC automatically.”

Stage 7: “Ricky Gervais has a video blog? The guy from ‘The Office’? Cool.”

And finally, inevitably, Stage 8: “Long as I'm Christmas shopping, I'll just duck into The Apple Store. Those nieces and nephews, they love their gadgets. Oh look, a video iPod.”

My downward spiral may not be typical, but it's not unique, either. Technology wants to be used, and entertainment technology particularly. And of course, there's a market for paid video downloads from TV, provided the price is low and ends in 99 cents so I think I'm getting a bargain. If I'm on line at the motor vehicle bureau, you think I won't watch an episode of “CSI”? (Not “American Idol,” though. Even I have standards.)

Why not own the video outright, rather than paying Google or iTunes for five plays and then out? Because I've already given up enough shelf space to boxed DVD sets of favorite TV shows, not to mention my museum of videotapes. And renting a whole season's worth of some show from Netflix requires a monthlong arc to get through seven DVDs, usually mailed three at a time. Besides, I gladly pay iTunes 99 cents a song to avoid buying whole albums when I only want the good stuff.

I also already use a digital video recorder to make sure I don't miss favorite shows. In fact, I try to record them and then play them back on my own schedule so I can skip commercials. Downloading some of that same content to a mobile player is just a logical extension of what I'm already doing in my life.

That brings us to the significance of me to you, the online marketer. I'm a motivated user who's willing to pay for the convenience of getting my mobile content when and where I want it. What's to say that I won't accept a short ad before or after my downloaded video, especially if watching that message means I pay a bit less for the video — or nothing at all?

And marketers can produce video content too. Once I get the online video habit and know where to search for what I want, why wouldn't I be willing to watch a free how-to video about a product I might be interested in, or might already have bought?

The online video market is new enough that the business model is still in a tremendous state of flux. Apple's iTunes, the biggest aggregator so far, has stuck to its fee-paid system. Google's new Video Store will price downloads flexibly, in theory going as low as 5 cents. Other smaller providers such as Blinkx are testing ad-supported businesses. YouTube, a free video-sharing site that distributes Google's AdSense ads, saw its traffic jump to 1.2 million downloads in one week last December, thanks to a hit viral video called “Lazy Sunday” from a couple of “Saturday Night Live” veterans. That gave YouTube an 83% bump in its market share for the week, predominantly from the 18-to-24 age demographic. If you're marketing to that group, you're going to want to get into advertising on video search/ download sites.

My own example aside, the video wave will only get bigger. It may eventually encompass that old Holy Grail, downloads of entire movies via the Internet. At least the bandwidth will be there. Last year cable companies such as Comcast and Cox Communications hiked their download speeds to the home — Comcast to 5 megabytes per second from 3 mbps, Cox to 4 mbps — to compete against the lower-priced but slower-connecting DSL offered by their telco rivals. At speeds like that, downloading a two-hour movie clocks in at minutes, not hours.

And that will be one more thing driving users like me to our computers to find video content.

See you there.