Last week Microsoft discussed their plans to launch an updated online video player that will host full length programming as well as their existing library of video content. They join the ranks of the BBC, ITV, Channel 4, Sky and LoveFilm, among others, who are all building, readying and improving online video services for the future. Yet Microsoft, like YouTube, is in a unique position.
Content
Microsoft isn’t a threat to the traditional broadcasters because it is positioning itself as an aggregator of content. It will house programmes from multiple broadcasters including BBC Worldwide and other production companies to offer programmes like What Not to Wear, Shameless and Peep Show.
This is how video content has always worked on TV; think of this player as a web-based digi-box of sorts. Similar to what YouTube is exploring, Joost already offers and something we’ll be seeing a lot more of in the future. Even newspaper sites like Guardian and Telegraph aggregate ITN and potentially BBC content.
Audience
There are a number of reasons why marketers are getting so excited about this new service but, primarily, it’s all about the consumer. This is the latest project by Ashley Highfield, one of the founders of the BBC iPlayer, the service that is still considered a benchmark on-demand video player. Microsoft’s video player is expected to be as usable as the BBC service.
Secondly, it’s the pure-play online media owners like YouTube and Microsoft that receive the lion’s share of the online video audience (over 70% – comScore), let alone the millions of people that visit their sites for other reasons. This is a major move from a major global media owner. It will undoubtedly gain traction with consumers with the right content.
Advertising
The Microsoft player will be free because it will be funded by advertising. Which formats will be used is yet to be revealed, but we can expect pre/mid/post-rolls and perhaps the use of some newer formats like in-stream overlays and branded skins.
Aggregators of quality content combined with an existing massive audience like Microsoft’s offers all of the branding power of TV with reach and the benefits of online targeting and measurability. Basically, it will become the most powerful way of delivering video ads traditionally reserved for TV because it’s essentially all the same thing with extra bells and whistles.
The future
What this all means is that in 2010 consumers will have a variety of incredibly powerful on-demand video players to choose from. While Microsoft won’t be the only one, it will be one of the leaders of this pack.
Once it’s up and running, it will only be a very short matter of time before many of us are all accessing these services on our TV screens. Microsoft could easily make it available through the UK’s 4 million Xbox 360 consoles for instance (they’re doing this with films and Sky already). The mass market will follow extremely quickly.
These services are the living room’s digi-box of the future, not to mention the bedroom, the office and on mobile. For the likes of Microsoft, it’s a massive new market to compete for. If the last 12 months for online video were fast and furious, the next 12 are going into warp speed (sorry for that last sentence).
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I’ve noticed that I generally start a blog post apologising for the many celebrity references, and not talking overtly about advertising, but I guess brands can actually learn a lot from the rich and famous, who are of course brands in themselves, and digitally some of the most forward-thinking there are. Step forward Lady Gaga, a current obsession of a couple of IABers, not just because she has good music and clothes, but also because she’s a fan of… online video! 
