• by Mike May , November 14, 2005

It has now been a month since the video iPod was released, and all of us who planned to, have ponied up our $1.99 to watch "Desperate Housewives" on the train or in an airport or at the office, just to see what it's like and to start to shape an opinion about how it will impact our industry.

Everyone has an opinion, and the perspectives range from Chicken Little to a 1999-esque exuberance, depending on which side of the revenue stream the opiner's barge is docked. The video iPod, an idea so unique it seemingly renders all review of it mere clichés, has been heralded "the interactive industry's tipping point", "a watershed event" and even "a Chuck Fruit moment" (named after the media buyer who pioneered advertising on cable TV) because the video component will lure even more advertiser dollars online.

Good news for online publishers. Or is it?

One early reviewer of the video iPod remarked that it "will do for TV what podcasts have done for the radio industry." His point was one about reaching fragmented audiences, penetrating extra-regional markets, and deepening relationships with key listeners. Perhaps podcasts did that for radio, but not without exposing the medium to a host of new competitors at the same time. Mark Svamme, partner at veture capital firm Sequoia Capital (a major investment in Adam Curry's new podcast network), believes that once the inevitable revenue streams are established in podcasting, as much as $2 billion in advertising will flow into the medium from radio.

$2 billion more online seems like a boon for publishers. But what if it fuels further fragmentation at their expense?

Until then, traditional media faces the same irrational competition that brick-and-mortar retail faced in 1999 and 2000. Then, hundreds of dotcom merchants burned through venture capital cash to acquire customers (or mere "eyeballs"), offering deep discounts, free shipping and other incentives in the process. Today, content creators with blogs, podcasts and now video can create whatever they choose and, in many cases, precisely what they are highly skilled at, unencumbered by advertiser preferences, editorial guidelines, format or duration, demographic targets--or even the FCC. Disney may very well be proud of the volume of videos it has pushed through iTunes, but we won't know for sure if they deserve to be until Dawn and Drew get their iSight camera dialed in.

This spells trouble for publishers. Or is it a windfall?

Last week I sat in a conference room with the MediaPost management and editorial staff, and we brainstormed how to program the upcoming OMMA West conference (set for March 2006). We started by looking at how the industry has changed in the six weeks since OMMA East (September 2005). The answer was, in a word, video.

But what advertisers, media directors, technology providers and a host of pundits regard as video publishers should distill down to "content." The video era online is already shaping up to be defined by the content creators and owners, not the distributors. In almost every major initiative since the video iPod, there is an underlying content ownership story. For example:

What ABC's "Lost" and "Desperate Housewives" have in common is that both shows were created by Disney studios.

CBS-owned CSTV.com will begin distributing podcasts of proprietary content via iTunes, an initiative that will almost certainly lead to video content as well.

In its 10-Q filing for Q3 2005 last week, Yahoo! reveals the following risk to ue aggressive efforts to develop unique content: "Yahoo!'s current and potential third-party content providers may view our services as competitive with their own and this may adversely affect their willingness to contract with us."

AOL and Warner Bros. announce today the launch of an initiative that will stream 100+ classic TV shows online. All of the shows are from the Warner Bros. library.

Proprietary content is white-hot, again. $20 million for Weblogs; $9.8 million into Adam Curry's podcast network, and dozens of other deals not yet in my feed reader. But then we hear Gawker's Nick Denton insist at Ad:Tech that "lame brands" shouldn't advertise on blogs, and that custom programs--even with big advertisers who fit well with the blog's audience--aren't worth the effort.

The stakes for publishers are massive, and now that measurement discrepancies have reached the public view, are now the industry's best-kept secret. Industry news, chatter and events have focused on the issue from the perspective of advertisers and, in what feels like more of a human-interest than business angle, the bloggers and podcasters themselves. We know more about what Soccergirl thinks about the video iPod than what Rupert Murdoch does. As a medium, it's fiscally responsible to love our advertisers. But publishers need some me-time on this issue, and should begin to commandeer mindshare wherever possible to vet, debate and brainstorm it.