While there are many areas of media that are going through changes, 2008 will be a particularly interesting year for the television industry. With YouTube already a household name, even the most notoriously defensive media giants have come to realize that online video is more than just an afterthought, in fact, it might just be the key to the new media castle.

The WGA strike that started in late 2007 brought the issues associated with online video to everyone’s attention. The ongoing battle between producers and creators has resulted in the cancellation of a bunch of scripted TV shows and, ironically, accelerated the adoption of new media consumption habits, as parts of the TV audience moved online to get their entertainment fix.

If the media companies are willing to let parts of the audience slip away, as well as lose millions in ad dollars from TV hit shows be shut down over the issue of compensation for shows streamed or downloaded from the Internet – then the executives in the ivory towers must believe that there is at least a chance that online video is about to make it really big, perhaps even proving television as we know it obsolete, right?

Moreover, the media giants formed their own ventures like Hulu, as well as partnered with some interesting startups like Joost, to take the quality TV experience to the web – a testament to that online video has come a long way from the era of the dancing cats, skateboarding dogs and other user-generated home videos.

In 2008, these services will come out of beta (the test phase) and increasing bandwidth for many viewers will make streaming high-quality video a better experience, making it possible to enter a whole new world of online entertainment, not just on the computer and on the cell phone, but also eventually on the main home screen in the living room.

However, now that even the dinosaurs of the media business have come to terms with that online video can actually be worth someting, THE question to be answered in 2008 is HOW to monetize online video and set up a sustainable system of compensation for the content creators.

The boom for online video also makes video metrics an important emerging category to keep an eye on. The poorly measured 30-second spot does not seem to work online and there must be a way to sell services and products, using the unique interactive capabilities of the Internet, while accurately measure the outcome or ROI for media buyers.

In 2008, my qualified guess is that we’ll see a lot more of pre-rolls and overlay ads, but I think that the trick to really make it online is to put together packages with immersive advertising, product placement and interactive components that make sense, perhaps even providing performance guarantees beyond what the television networks currently do.

Packaging a show with advertising and product placement opportunities requires skills that goes beyond just the creative, but monster reality production companies like the Dutch company Endemol and UK’s FremantleMedia have shown the way with “Big Brother” and “Idol”. If the networks don’t adjust their way of doing business profoundly in 2008, I would not be surprised to see some of these production companies distribute the programming themselves on the Internet, cutting out the middle man (the networks) so to speak.

All that said, I’m still waiting for a wave of original, quality video content to be created specifically for online and mobile. We have started seeing some of it, Eisner’s new media studio Vuguru's Prom Queen for example, but I think that there is a great window of opportunity right now for show creators to pitch these shows. The audience is there, the VC-money is flowing and advertisers are finally willing to get onboard.

I strongly believe that online video will be the key to the new media castle and 2008 will be the year that people unlock that door and start making some real money off it. I don’t think that online video will make it into the living room just yet, but change is happening fast.

Bottom line, television content don’t just have one outlet anymore - this year more people will enjoy television content on more devices in more places than anywhere before. Now that is something for the industry to celebrate!

Joakim Baage

VP Content/Senior Writer
Digital Media Wire

PS. As a sign of the times, we have seen the interest for our Future of Television conference grow and the 2007 event in NYC was our biggest one so far. This year we’re pleased to bring the event to the LA, so that you’ll be able to hear the latest as well as meet and greet some of the most progressive companies in the TV and online video space on the West Coast as well. For more info, click here. DS

Flickr Image By Shug1