Helmsley Media

I have read a lot of bloggers talking about how important video is going to be in the future of online media, and I doubt that anyone would disagree, but there has yet to be a very effective way to make money from video online. Even beyond online video, we need to start looking at new methods of distribution and monetization for video based media in general as viewers’ habits are being shaped by digital video recorders that allow them to watch content on-demand, so it isn’t just YouTube and BitTorrent that’s changing the game.

So what’s the trouble with video right now? DVRs are cutting down the value of ad space on television programming. Viewers can now skip the ads altogether and couple that with more people going online, the broadcasters are starting to feel the pressure. For more information on the numbers check out this report from the Association of Canadian Advertisers from October 2007. Broadcasters are no doubt suffering from piracy as well.

While online video sites like YouTube have managed to generate massive traffic, but I have yet to hear anything about substantial ad revenues yet. A huge problem with online video is the culture, or the expectation, of internet users that once you have paid for your internet you expect pretty much everything to be free from that point on. People want BitTorrent, they want YouTube viral videos, they want FREE STUFF. So how do we deal with this issue? Easy, a tax!

I came across a Maclean’s article where the author advocates a tariff or royalty model where the ISPs be taxed for the “free” content that their subscribers are getting access to. Not only do I not agree with the logic of this argument, I do not see it as being workable in the least bit. Internet media is an international medium, how does a Canadian publication get compensated by an American ISP that helps it’s customer get access to the Canadian content for free? No, this will not work.

I really do not know what models will evolve over the course of the next few years, but I am confident that they will. To say that nobody is making money online with media and that they won’t is in my mind a fairly alarmist and uncreative way to think. Now this is of course easy for me to say, I do not work for a newspaper or television broadcaster, I work for a cable company/ISP! Still, I think that the media industry needs to be willing to adapt, if not the establishment will be replaced.