Here in the United States, television has—we hope only temporarily—lost its spark. Back in November, the Writer’s Guild of America went on strike after it was unable to reach an agreement with The Alliance of Motion Pictures and Television Producers. No new shows are being written meaning that many television programs are in danger of going “dark”—some are there already. I know I am certainly getting tired of re-runs and I was already sick of reality shows. How soon will we start signing up for more Netflix deliveries and tuning in online for our primetime entertainment? Pushing advertising dollars online, whether in the form of video or display ads, could provide advertisers with a new user base as they look for ways to reach consumers and tap into the $7 billion online video search and advertising market.

But successful online advertising takes more than a conversion of 30 second TV spots repurposed and redirected onto the Web. This week Burst Media, an online advertising network, released a survey that reiterated the growth in online video viewing across demographics while also highlighting low consumer acceptance of video ads. Numerous studies have charted the growth in video viewing online and research increasingly evinces consumer hesitation about viewing online video ads.

Ads, by their very nature, are disruptive. The good news from the Burst survey is that about 53.6 percent of online video viewers recall seeing in-stream - either pre-, mid-, or post-roll - ads attached to some form of web programming. Unfortunately, more than three-quarters (78.4 percent) of respondents said in-stream ads are intrusive and fully one-half (50.4 percent) say these ads disrupt their Internet experience.

The bad and the worse: the Burst survey found that one-half (50.7%) of respondents stop watching an online video once they encounter an in-stream advertisement. Ominously, 15.3% of respondents report they immediately leave the website once they encounter an in-stream advertisement in an online video. And in-stream advertising does not always make a lasting impression. In fact, two-thirds (69.1%) of survey respondents say they pay about the same or less attention to in-stream video advertisements than they do to standard creative units on the same page.

The Burst study should force advertisers, agencies and publishers to take notice as it juxtaposes the growing consumption of online video with the dissatisfaction consumers feel when content is interrupted by streaming ads.

“Online video is clearly in demand by web viewers,” said Jarvis Coffin, CEO of Burst Media.

“However, marketers need to tread carefully with online video advertising. It’s pretty clear from our research that most online video consumers are not yet willing to sit through advertising to get the content they seek. For online video advertising to be truly effective, advertisers must approach it with a consumer’s mindset, and recognize that what might be right for one segment could fail with another.”

The time for online video ads is now; video ads that respect and target consumer preferences so that users are willing and even eager to view them. Whatever the outcome of the writer’s strike, online video is winning an increasingly central role in consumer engagement with media. Content producers and media companies must make their video content more discoverable and accessible to consumers if they hope to capitalize on this trend. In doing so, they will make the shows and clips more valuable to advertisers, perhaps enticing those advertising budgets away from stalled television series and into the online realm.

The buzz around online video has recently grown to a dull roar in the realm of business and finance. CNBC and The New York Times have said that they will begin contributing financial articles and video to their Web sites and Bloomberg News recently launched CEO Spotlight, a new Web video series of CEO interviews produced in Bloomberg bureaus around the world. This is Bloomberg’s first step towards bringing a vast amount of business news video clips to the public Internet. Bloomberg creates a huge amount of video content across the globe—in multiple languages—and that content is already distributed live, 24 hours a day on cable, satellite and the Internet. So what is changing? Bloomberg News is shifting gears from traditional broadcast efforts bringing quality, Web-purposed video to the forefront. At the core of Bloomberg’s strategy—and the strategy of other business and finance content producers—is the conversion of traditional, linear programming into easily consumable, searchable online video clips.

CNNMoney.com is another site making a major push into online video. As one of the most popular online destinations for financial news, last month CNNMoney had more than 7 million unique visitors, according to Nielsen Online. The site launched a broadband initiative this past Tuesday and will soon go from producing one or two original videos each day to creating about 30 broadcast-quality Web videos daily. CNNMoney’s newly designed homepage includes an embedded video player, allowing users to view video content while they follow breaking business news and streaming financial data online. Executives and editors anticipate the site’s new emphasis on original, fresh business and financial news clips will better serve users and attract lucrative online advertising.

Touting that “The future of business television is online,” CNNMoney.com Editor Chris Peacock explains,

“The audience for business and finance information migrated online very quickly…They’re at their desks. They’re an at-work audience. We have a footprint to reach more people through our distribution than I think the classic cable networks can.”

CNNMoney.com hopes their online video focus will take on financial TV networks such as CNBC and the Fox Business Network. Online video may trump TV during the business day when CNNMoney’s target demographic is at their computers and short video snippets appeal more than long form content, but how much should people worry about competition between TV and the Web for viewers and advertisers? Allen Wastler, the managing editor of CNBC.com argues that the “holy grail” of the industry is finding a complementary relationship between the Internet and TV that best serves the audience/Internet user.

Yet both Bloomberg and CNNMoney’s new video strategies come in the midst of upheaval in the media and advertising industries. While a complementary relationship between TV and the Web may be the ideal, in the current reality companies are focusing on attracting viewers to their content and subsequently gaining a greater share of potential advertising revenue. As Jonathan Shar, CNNMoney.com’s general manager declared,

“The ultimate goal is to start competing with television for those [advertising] budgets.”

While the goals may differ—“We’re not pretending that we’re trying to re-create a television channel here,” CNNMoney’s new executive producer for video, Caleb Silver, explains—media companies all want to guarantee advertising budgets factor their sites, stations, and content in heavily. With so much attention on growing online populations and user interaction with Web video, it appears the challenge will be for TV to hold onto ad dollars. Online video, however eager the business audience may be to consume it, faces distinct obstacles to monetization; content needs to be fresh, engaging, discoverable and easily navigated in order to increase views and prove valuable to advertisers.

John Shinal of vator.tv recently spoke with EveryZing CEO Tom Wilde about video search. As traditional media companies rush to get their content on the Web they face a serious problem—how to help Internet users find their audio files and video clips. EveryZing helps traditional media companies port their offline content onto the Web and put it in a form that can be more easily discovered.

“We’re the inverse of Google video search, Blinkx and Truveo,”

Wilde says, naming just three of the many companies that search Web video.

“We take videos and optimize them for search.”

Go to vator.tv to watch the interview.

Happy New Year!

Undeniably, 2007 was an exciting year for digital media. As we enter 2008, we continue to witness the explosive growth of the next phase of the Internet’s lifecycle – multimedia.

In 2007 YouTube—then later in the year Google by association—stood as the archetype for a new age of user-generated content and viral videos. The number of people engaging with video online soared and virtual communities of every shape and size attracted users and investors as social networking established prominence as an online activity. Presidential candidates, their supporters and detractors jumped on this trend having realized the potential of such networks and social sites to spread their messages, videos, and sway voters—particularly younger constituents. As multimedia content flooded the Internet so too did the advertising dollars, pushing Newspapers and other traditional media to reexamine and reshape their own online presence.

At the end of 2007, users spent forty-five percent of their time online consuming content, and 77 percent of unique users consumed online video.

The revenue opportunities for multimedia online are currently red hot—video advertising is predicted to increase from $700 million in 2007 to $4 billion by 2011, according to eMarketer—as companies continue to look for powerful ways to impact the growing online population. Thus far however, major media companies have struggled to turn their video assets into large revenue streams online. The online “video value chain” will continue to take shape in 2008 as more companies bring creative solutions to questions of content production, delivery, discovery and consumption. This year will bring even greater innovation to the Internet video space as content producers and consumers negotiate the evolving sphere of online multimedia.