Ajit: 2006 seemed like the year of the YouTube. How did and does blip.tv fit in with all of this?

Mike Hudack: Well, I would argue that 2006 was in fact the year of online video, and that 2007 will also be the year of online video. The "online video" field is huge, and the viral video segment was the first to explode -- and YouTube led this viral video segment for a lot of reasons, not least because you can find any commercially produced video in the world on it.

At blip.tv, our focus is very different than YouTube's. We're focusing, first and foremost, on shows. Shows are different from viral video in a lot of ways. They're generally better produced. They're stickier. They're often focused on a particular topic, and they're extremely entertaining. We believe that 2007 will be the year of the independent content creator, and many of the great independent content creators out there are creating shows.

We've built the best platform in the world for independent show creators at Blip, and we're dedicated to ensuring that an independent content creator can make a great show in 2007 while maintaining editorial independence, maintaining ownership of their creative output, and actually making a living from their hard work.

To that end, we've built a platform that offers cost certainty (free bandwidth without fear of success), distribution to platforms as diverse as Blogger, AOL Video, Yahoo Video, Akimbo and iTunes, a marketing engine that has brought shows from 5,000 to hundreds of thousands of views per episode, and an advertising model that is now making some people more than enough money to live on.

Ajit: With my video podcast site, I tried to do all the hosting and then eventually decided to move partially to Blip because it gave us more flexibility. And also because there are so many platforms out there and it is impossible for an independent podcaster to keep up with it all.

Mike: Indeed. The thing about YouTube... you'll find lots of great commercial video on it, and lots of stupid human tricks, but only a smattering of great independently produced content. There are a lot of reasons for this, but you have to recognize that their platform is designed to drive the YouTube brand home, that it's incompatible with a great portion of the world, and that they don't offer any realistic revenue model for independent content creators. YouTube isn't compatible with iTunes, Apple TV or Democracy Player, just to name a few.

Keeping up with those platforms is Blip's job. It's our job to negotiate distribution deals with the latest and greatest video aggregators. We're about to launch automatic syndication -- with full credit given to the content creator and full advertising support -- to MeeVee. This is in addition to our existing deals with AOL, MSN (powered by AOL, actually) and Yahoo. And we've got many more coming.

Key to our model is that we offer an open platform. We're the only major service out there that offers direct and truly usable links to transcoded FLV files in our RSS. That's a pretty geeky thing to say, but it makes a real difference in practice. It means that people can build new tools and new platforms to work against Blip and your video will work perfectly in those platforms. That's something that other video services simply can't say.

Ajit: You also provide compatibility for the Windows Media Center. Which I certainly wasn't aware of before I switched.

Mike: Yes, we do provide compatibility for Windows Media Center. We think it's incredibly important that people be able to enjoy your video in a "lean back" way -- just like they watch television. Windows Media Center is an important part of that. Apple TV is also an important part of that -- it hasn't shipped yet, but we already support it. And we also offer a plug-in that allows you to upload videos to Blip directly within Windows Movie Maker. We're dedicated to supporting the great ecosystem of video software, systems and services that are already out there.

Ajit: With Apple TV, will you allow users to upload HD content?

We didn't have to do much of anything to support Apple TV because of the way our service already works. We technically already allow people to upload HD content, and we have every intention of dramatically improving support for HD content as we move forward. You can upload 1080p video to Blip right now, the only catch is that it can take a while for a user to download on a relatively slow DSL or cable modem. That's the real challenge with HD video. We're exploring a number of p2p distribution options for HD video right now, and we've actually gone so far as to implement one solution in development, but we haven't released it yet. We believe that HD video content will become increasingly important in 2007, and we're committed to staying in front of that trend.

Ajit: Just today, a mobile distribution service emailed me about distributing on cellphones. These emails are getting more frequent. Where is Blip in all of this?

Mike: Well, right now we're not very excited about the cell phone market. I know that sounds like blasphemy. In some senses it is. The conventional wisdom is that the cell phone is going to be the next great frontier for watching video.

With the exception of the iPhone (which we support because it's an iPod) we have yet to see a cell phone we want to watch video on. If you look at the statistics closely, you'll see that the majority of cell phone users out there agree with us. Not many people are actually watching video on their phones, despite all the hype.

We could release mobile phone support tomorrow, but we're not convinced it's worth the effort. We've had people from every major phone manufacturer and network talk with us about this, trying to convince us to support cell phones. When we press hard about our reservations, they tend to privately agree with us but insist that the revolution is "just around the corner." We've been hearing that for a long time. It always takes longer for those kinds of technical revolutions to happen than prognosticators would have us believe, and we don't see how it can be made a compelling experience anytime soon.

The great thing about video on the Web is the discovery process -- it's much better than a television channel guide. The great thing about video on the television is that I can sit four feet away with a beer in one hand and popcorn in the other and totally veg out. The cell phone doesn't give me either advantage. The only thing it's got is that it's with me all the time. So maybe I may want to watch two minutes of video while waiting for the bus. But CNN.com on my cellphone already fills that time for me. It's easier to read a news story on the phone than it is to watch video on that tiny screen.

Ajit: It would be cool to be talking about a video and just pull your cellphone out of your pocket and show it.

Mike: Sure, that would be great. But is there a business there?

Ajit: By your estimate, when do you think the transition will happen (if you think it happens at all)?

Mike: The transition to the point where watching video on a cell phone is a rewarding experience? I think it will take years, but that the iPhone will push the industry in the right direction. There's another problem which I haven't really touched on, and it's the approach the carriers are taking to the market.

On the Internet we have net neutrality, which means that we don't have to negotiate with individual ISPs to push video to their users. We don't have to go from Speakeasy to Comcast to Time Warner Cable to Verizon and say "Please, could we make blip.tv available to your Internet subscribers?"

With cell phones each carrier has their own little fiefdom, and we would have to go from carrier to carrier negotiating lopsided agreements to get access to their subscribers. That means that only watered down crap ever reaches the handset, and it means that the real driving force of innovation and platform adoption (choice, easy access and low barriers to entry) aren't in effect. Without those innovation drivers at work you're going to see uninteresting rehashing of offerings already available on the Internet and television that aren't uniquely suited to mobile devices. If the carriers opened their networks up you'd see real innovation and a class of applications that actually offer value because they're on mobile devices.

Ajit: YouTube has the popular video responses. In Blip you have blogs and a community page. Can you talk about that?

Mike: Sure. When we first started blip.tv, we built it as a publishing and distribution platform. We looked around at the market and realized that more than having a central point of discussion, people were crying out for the ability to put video on their own sites, on iTunes and throughout the Web at large. So those were the features we built out first.

Once we had that down, we moved on to really building out the community features on blip.tv itself as a destination site. We had an advantage in doing this in that we bootstrapped with all of the content people had uploaded for distribution. But we still didn't have enough conversation going on, and we realized we had to bootstrap a bit again. So we started asking people to share RSS feeds from their blogs and other platforms in order to really populate the site with content. Once that was done the site really started to feel "alive" and we've been building all those features out since.

We're very keen on building community on Blip, both around blip.tv itself but also around individual shows. That's why we added the show pages and the ability to read the show's blog and comment on the show itself right there on that show page. Now we're working hard on a set of features to encourage even more community building on Blip, and we're particularly looking to find new and interesting ways to stitch remote sites (like your blog) together with Blip in a community way. So we're looking at sharing comments across sites, trackbacks and pingbacks, and all sorts of things like that.

Our community has really developed in a different way than YouTube. YouTube is focused on being a digital video repository, we're focused on providing presence for shows.

Ajit: Let us talk about some of the new features in place (and coming up). Ads? The user can add ads to their content. Talk about that. Because unlike Revver, you have several options?

Mike: Absolutely. So one of our most important goals at blip.tv is to make sure that original content creators can make money from their work. We believe in independent content, and we believe that we're entering an age in which the traditional networks (your NBC's and the like) are losing relevance. Their importance and negotiating power is based on a monopoly on broadcast spectrum.

So our challenge -- everyone's challenge -- is to build a way that you can monetize good content while maintaining editorial control and ownership over your work.

The first thing we did differently with advertising is we made it opt-in. We're the only company, to my knowledge, to do this. If you don't want advertising on your videos on Blip, you don't get it. You have to ask for it. Once you ask for it, you've got lots of choices about how it works.

I'll talk about how we monetize most content first, then we can talk about the top-of-the-line content, which we treat a little differently.

No one knows what the right model for video advertising is yet, and at Blip we believe that there won't be any single correct answer. Some advertising strategies will work better for some shows, other strategies for other shows.

The first question you face when talking about advertising is the format. You've got pre-roll advertisements, post-roll advertisements, mid-roll advertisements and adjacent advertisements. Pre-roll advertisements pay the best, but really annoy users. Post-roll advertisements don't pay as well, and only get seen by 50% or less because they aren't displayed until the video is completely finished playing.

That brings up an important question. Do you annoy your users in order to make an extra buck? or do you go with post-rolls that don't annoy your users but don't make you as much money? Well, at Blip we don't feel like that's our decision to make. So we've punted, if you like. The content owner makes that choice.

Today we offer post-roll ads and we allow you to opt into pre-roll ads, which are coming soon. We expect that within the next month or two. So you have that choice.

Then you can pick mid-roll ads, which kind of split the difference. They're little text or banner ads that show up at some point while the video is playing, generally in the lower third of the video player. They overlay over the video and go away after a little while. We're also offering adjacent ads right now, which are banner or text ads next to the video player that change as you're watching the video based on whatever's being talked about in the video at that time.

So at Blip you can choose any one or any combination of these formats, with an eye towards finding the sweet spot for your content. We serve these ads through a series of partnerships with leading video advertising companies. You can opt into the blip.tv blend, which means that we serve ads from whatever partners we think will pay the best at the moment. Or you can say that you like one partner more than others, and you can drill down and build a "custom blend" which includes only the ad partners you like.

It's all about putting you in control of your monetization strategy.

Ajit: How much do these ads pay?

Mike: Well, some of them pay very well and some of them don't pay very well at all. It's very dependent on your content. Our goal is to get something like a $10 effective CPM from all ad formats, measuring based on how often they're seen.

Some of our ad partners pay better than that, and we're particularly excited about a new ad partner we're gradually putting online right now which offers 15-second postroll full-motion video ads for QuickTime that pay very well on a CPM basis. Other ad partners pay on a CPC (cost per click) basis, probably around ten to thirty cents per click. So that's what we can do for all shows.

Ajit: Talking about cost per click. You also offer raw statistics.

Mike: We do offer raw statistics.

Ajit: Will this get more elaborate?

Mike: And, by the way, I'd like to mention that we think that our model of using a number of partners is a winning one. It gives us access to a huge pool of very talented and innovative companies, and lets us do things with advertising that we could never accomplish alone. We're creating an open air marketplace for advertising, using the forces of the market to deliver the best possible solution.

Our advertising stats are actually about to get much more elaborate. We have a release coming up scheduled for Saturday which includes very pretty charts and graphs of your advertising performance, lists of your top-grossing episodes, your best days, and all sorts of other metrics. We believe that the best way to increase revenue for your show is to watch what works and doesn't work and change what you're doing as a result. You can't do that without the proper information to back it up, and we're building those tools right now.

Now that we've talked about advertising for everyone, we should probably touch quickly on really high-end shows. We believe that some shows can do much better than run-of-network advertisements from our ad partners. For them it's not about ad format or anything else. That's because they've either built a huge mass-appeal audience or because they have a relatively large audience in a particularly valuable advertiser-attractive niche.

For these shows we actually go out on our own and pitch sponsorships for them. When we do that, we're meeting directly with media buyers and brands and saying "You know, Show X has a great audience that perfectly matches your brand, and they've built up a great reputation. You should associate your brand with them."

A perfect example of this is Amanda Congdon's new show, starring Amanda Congdon. We actually launched Starring Amanda Congdon with sponsorships from Unilever and Paltalk. It was the first independently produced show ever to be underwritten by a major brand sponsor at launch. Ever. So we don't price those as CPC or even on a CPM basis. We price those for brand adjacency. And they pay really very well.

We believe that sponsorships will allow a great number of content creators to make their shows full-time, without having to worry about a day job. We're already seeing this happen.

As far as more elaborate statistics, our next release will include nice charts & graphs for tracking the performance of your content. We'll also be giving you lots of new ways to look at your show's performance over time.

Ajit: Will the show page become easier to configure? Or tailored to personal needs?

Mike: We've just launched new show pages, and we're really excited about how people are embracing them. They're uploading big show pictures and trailers and putting in RSS feeds of their own non-video blogs. We're switching gears a bit and redesigning the individual video view page now, and when we finish that up we're going to come back to the show page and offer a bunch of new and interesting features there. We're particularly interested in offering a version of the Jumbotron (that's the big video player on our homepage that rotates through a bunch of video samples) on the show page.

We've also got some enhancements to show page configuration in our new release coming out on Saturday, and we're always looking to make configuration easier. If you've got any suggestions, we're all ears and would love to implement them if we feel they make sense.

Ajit: Well, I guess basic CSS controls would be nice. I would like something very similar to my site in terms of colors and look. Do you think that will be possible someday? Similar to how Myspace allows you to customize (hack) the user page.

Mike: I think that some basic CSS controls should be possible someday, definitely. We're always trying to balance the Facebook approach ("we've got a good look and feel, and it works reasonably well for everyone") against the MySpace approach ("go! make this ugly and difficult to use!")

Ajit: There is a lot of chatter about a new feature called intros and outros, would you like to talk about that?

Mike: You know, I'd probably rather not talk about that much, except to say that it's something we've been working on for a while and we'll be releasing as soon as we can. I'm really thrilled to see that people are excited about the feature, and I hope we can release the functionality for them soon. There are a lot of delicate questions around intros & outros that we still have to figure out how to solve, though. In general, though, we think they'll have a pretty revolutionary effect on the way that people publish their show. Maybe evolutionary. Somewhere between evolutionary and revolutionary.

Ajit: Dvguru recently reported that YouTube is going to possibly put content on their own TV show or channel. I was bothered by this because the user gets nothing for this and though it is legal by the user agreement, it seems like a violation. I know from the videoblogging forum, you are very strong about user rights, can you talk a little about this?

Mike: I believe it's the price you pay for uploading your content to a service without paying attention to the fine print of the terms of service. This is the problem with being an independent content creator who wants to make a living off your work and putting it on YouTube. You're going to be taken advantage of.

They're not the only ones, of course, but they're at the top of the list. There's nothing wrong with taking Internet video and making it available on a TV show or channel. It just has to be done in a way that respects content creator rights, and based on YouTube's history I doubt that they will.

I also have my doubts, of course, on whether YouTube's viral video content will do well in a linear television format. It'll be about as compelling as America's Funniest Home Videos. Where's Bob Saget when you need him?

Ajit: What do you say to independent creators who host their own videos? Why should they bring their content to Blip?

Mike: Hosting your own videos is an exercise in the ultimate control, and in that it's a good thing. It denies you a lot of the services and value that a service like Blip can add, though, and at some point I think that most people will feel that pinch.

First of all, if you're hosting your own content and it becomes massively popular you get a big bill at the end of the month from your host. Either that or they shut you down just as you're peaking. Both suck. With blip.tv you get cost certainty -- you know we won't shut you down if you're successful and using a bunch of bandwidth, and you know we won't stick you with a huge bill at the end of the month. We don't punish you for your success.

We offer tons of value beyond that really basic thing, though. We've got a very mature, enterprise-quality transcoding system that turns your beautiful Quicktime masterpiece into a gorgeous Flash 8 work of art. We're about to release new functionality to grab the audio track and turn it into an mp3 audio podcast. We're automating all that hard work for you and spending our CPU time to do it.

Then you've got our distribution and marketing system. Syndication to AOL Video and Yahoo Video and MSN Video and Akimbo and the rest. The technical know-how and implementation of RSS 2.0 feeds for iTunes and Windows Media Center and the rest. A mature and capable system for accepting video uploads from cell phones and e-mails and FTP. A Flash player that's well tested and only getting better and more mature.

A very powerful application programming interface that people are building a universe of applications to interact with, including an upcoming Wordpress plug-in from the guys who do Galacticast and a Drupal plugin that lets you manage your entire Blip.tv-hosted show directly within Drupal.

Our marketing is important, too. If you've got a great show we can help you promote it with assistance from our PR firm and our relationships with everyone from Apple to the guys who run that latest video aggregator and search site you've heard about.

Last but not least, there's monetization. Do you want to sell your own ads, too?

Thanks to Mike Hudack for his time and effort. You can follow the Blip story on their blog.

• Jonathan Dayton and Valerie Faris (LITTLE MISS SUNSHINE)
• Justin Lin (BETTER LUCK TOMORROW)
• Maria Maggenti (PUCCINI FOR BEGINNERS)
• Cory McAbee (THE AMERICAN ASTRONAUT)
• Jody Hill (THE FOOT FIST WAY)