Over the past few months I’ve spent time with a large number of companies attempting to solve the video search problem.  I think there is plenty of evidence to suggest that the consumer video search and discovery experience could be improved.  However, one issue that has been gnawing at me is whether video search can be a sustainable business.  If video search as a business depends on advertising as its business model, I have my doubts.  I don’t believe that advertising can be nearly as effective a monetization vehicle for video search as it is for traditional search.  From my perspective, there are many issues to be overcome, but some key issues are as follows:

1) Video searches are largely not commercial in nature. When searching for video, most consumers are looking for free entertainment content to be viewed at that moment. Based on the data that I have seen from various video search companies, my guess is that far less than 5% of queries have any commercial intent. As an example, below are the top 10 searches from June 2007 (representing about 28% of all queries) for one of the largest video search companies.

• paris hilton
• SEX
• u2
• angelina jolie
• Akon
• mya
• sexy
• ciara
• t-pain
• beyonce

Compare this data to traditional search, where Google delivers ads for the 40% of queries that it thinks are commercial in nature.  The volume of video searches that have commercial intent and could be monetized is likely to be limited. 2) Advertisers are afraid of user-generated content.  UGC is still the most highly consumed and available online video content.  Video search results are bound to contain UGC and few advertisers are willing to risk being associated with inappropriate content (e.g., violence, pornography, defamation).  Without appropriate filters and safeguards in place, big budgets are not going to be allocated to video search.

3) There is no standard solution to monetizing online video. CPC text and CPM banner advertising, which have been used successfully to monetize traditional search and webpages, respectively, do not effectively monetize online video. When a consumer is seeking video content, it is easy for her to ignore non-video ads as they are not the media type that she is seeking.  While numerous startups are tackling this problem by developing new ad units (e.g., overlays, bugs, post-roll) and targeting technologies (e.g., speech-to-text, audio analysis, computer vision), advertisers are not going to allocate large budgets until effective, standard advertising units are available in significant volumes. 

I look forward to seeing how the video search monetization problem gets solved.  Given the trends around online video consumption, someone is going to crack the advertising nut or figure out how to use search as the hook for another form of monetization.