Monetizing Rich Media

There is a shift underway in how Facebook users communicate with each other; specifically with the increased use of one-to-one, or one-to-a-few video communications. Video as a base concept has already received strong traction on-line, but as anyone who has killed time on YouTube knows, the model so far has been one to many. This is effectively entertainment video, which is not the same thing as communications-centric video. A good corollary would be the introduction of enhanced network services on the wireless network a few years back, the most obvious example being integrated voice mail that is part of the service delivery of any wireless carrier. Voice messages are not left for entertainment purposes (most of the time), but to provide specific information to the recipient. The increasing use of video within social networks is likely to follow a similar pattern, with the exception that because there is an additional, significant dimension, the overall behavior of users is likely to shift. As an example, sit down with someone and ask them a few simple questions, then do the same thing with a video camera pointed at them. People are way more self-conscious when on camera, and as a result they behave and communicate differently.

I think once people become acclimated to transactional communications in a video format, the self-consciousness will start to ease, and this will just become another evolution in network based social communications. Now of course, the real question for the folks who provide the technology and enabling infrastructure is, how do we make money at this? While YouTube has been wildly successful in terms of usage, the company is still struggling to monetize its vast content repository, and this is likely to be even more the case for one-to-one video communications, since it is not entertainment oriented (does anyone want to watch a video of my wife telling me what to pick up at the grocery store? Heck, I don’t even want to watch it.).

The value of any network based service is driven by how many people use it; hotmail is a great example of this. The value of any one hotmail user to generate revenue is limited, but the value of the aggregated hotmail installed base is worth millions or billions. For social networks like Facebook who are sticking out their neck and offering video messaging, the same thing applies; don’t worry about the monetization aspects yet, instead focus on delivering an intuitive, high-value service. If Facebook (or others) can create a vast network of transactional video communicators, it will become worth multiple billions within a (relatively) short period of time.

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