For nearly four years, the blog at Video-Commerce.org has been dedicated to bringing you the latest video commerce best practices and industry developments.  We’ve hired bloggers and blogged ourselves to make sure that the content posted here remains fresh and up to date.   As some of you may know, this blog is funded entirely by my company, Liveclicker.   In addition to this blog, Liveclicker also runs a separate blog at VideoRetailer.org.  VideoRetailer.org is a video commerce blog, but it’s more centered on Liveclicker while this blog remained a general industry resource.  Recently, we’ve decided that it’s no longer worth the financial investment to continue paying bloggers to blog at this site and to keep content fresh on both blogs.  We have decided to combine VideoRetailer.org and Video-Commerce.org into a single blog.

What changes can you expect as a result of the blogs merging?  

You will continue to access the blog at Video-Commerce.org.  Content will be updated more frequently since postings that would have previously gone up only on VideoRetailer.org will now be posted here at Video-Commerce.org.  We will continue to blog about best practices and industry developments.  We will continue to have guest bloggers share their cases, ideas, and stories.  We will continue our commitment that began in early 2009 to have video-commerce.org be a premier destination for all things video commerce and video marketing.  These things will not change.

The biggest change you will see is that we will now use the blog at Video-Commerce.org to share Liveclicker-specific content in addition to industry best practices and cases.  We will announce our company webinars, presence at trade shows, product developments, and other Liveclicker-centric information.  We think you will find the information valuable and helpful as a complement to all of the best practices content.

I invite your comments, emails, and questions.  You can comment below or email me at justin [at] video [dash] commerce [dot] org or justin [at] liveclicker [dot] com.  Thank you readers and as always…

Happy Selling!

Justin Foster

Founder, Video-Commerce.org

Scot Wingo

I recently had the opportunity to interview Scot Wingo, who is on the Board of Directors for Shop.org as well as the Founder and CEO for global e-commerce platform provider, ChannelAdvisor. In the interview, Scot shares his insights on how the retail industry can utilize video commerce to strategically improve product conversion.

Interview with Scot Wingo:

Justin Foster: Today we’re speaking with Scot Wingo from ChannelAdvisor.  Scot, thanks for joining us.

Scot Wingo: Hey, thanks for having me.

Justin Foster: Can you tell our readers a little about yourself, and specifically share with us what your background is in the e-commerce industry?

Scot Wingo: Sure, I’m the CEO and one of the founders of ChannelAdvisor. We are a software company that started in 2001.  Our software is on-demand, or used in a browser. Our customers are retailers.  We have over 3,000 retailers as customers, and what we do is help them manage what we call the e-commerce channel, and there are three different buckets in there. There’s paid search like Google, Bing and Yahoo!  There are comparison shopping engines. We actually support over 130 comparison shopping engines.  And finally, there are marketplaces like eBay and Amazon.com, and also new marketplaces out there, like Buy.com that we support.

Justin Foster: Our listeners here tend to be from large multichannel retailers and midsize retailers as well.  A lot of them are fairly new to video or have been producing video content for maybe just a couple of years.  Many of them, when they started retail video production, they would produce a product video and then they put that video on the product detail page. Do you see opportunity outside of the product detail page to syndicate video content other places?

Scot Wingo: Yes, if you’re going to invest in these digital assets, and video is obviously a very important one, you might as well syndicate that out there as well.  Marketplaces like Amazon allow for submitted videos.  eBay, which a lot of our customers use, especially on the luxury side, allows you to include a video with an eBay listing.  Comparison shopping engines are a little bit tougher. Only a couple of them will allow you to send a video, but right now it’s kind of limited.

Justin Foster: So it sounds like there is some opportunity in some of these marketplaces, and it sounds like there is also some limited opportunity in comparison shopping as well. Now in regard to the media assets in general, are you seeing clients experience greater sales and higher conversion rates when they push these assets out to these marketplaces?  What have your clients’ experiences been in that area?

Scot Wingo: The way I look at it is from a very high level view.  In the world of e-commerce, only 7% of sales are online, and I view video as a really exciting technology that helps bridge that gap between offline and online, and will hopefully take us from that 7% penetration level up in the 20s. That is the 30,000 foot view of it

The way we encourage retailers to look at it is that we view video as a strategic conversion enhancement. Usually, the best measurement is an a/b test of the conversion rate before and after video.  We definitely see a significant increase anywhere from the 10-20% range when you go from a flat presentation to a video presentation.

Justin Foster: How would that fit within the context of these rich interactive catalogues? Can you help me understand if video is a part of these catalogues or do you think of video as something completely separate from these?

Scot Wingo: In many times, video will live on the item page of the e-commerce site.  Sometimes retailers will have a separate interactive catalogue that could absolutely contain some video.  Retailers also sometimes have a separate video section on their site that shoppers can use if they want to see less product specific videos, and more category videos about a family of products, or a new line coming out.

Justin Foster: Today, does ChannelAdvisor have any clients that are syndicating video content out to any of these marketplaces or that are actively using video?

Scot Wingo: Yes we do.  They tend to be in the luxury segment, so folks like Saks Fifth Ave, Ann Taylor, and a lot of our jewelry customers tend to have video. We do have some TV networks as customers and they do everything they can to syndicate their video.

Justin Foster: Why do you think you’ve seen greater penetration of video syndication in those particular segments? Any thoughts there?

Scot Wingo: I think when you have a commodity product like, Nintendo Wii, or something that’s pretty well understood by the consumer, the video can be useful for some of the advanced things going on, but it’s not as compelling as if you have something like a diamond ring.  With a luxury item, the user wants to not only learn about that product and see it in its two-dimensional format, but they also want to see it on a person, and learn more about it in a way than you can only do through two-dimensional display.

Justin Foster: That makes sense. When you look across your entire client base, is video a topic that really comes up a lot? Or is it something that is just kind of hit or miss right now? Are you seeing any increased momentum among your clients with regards to trying to get into video or has it just been kind of stagnant?

Scot Wingo: I would say it is increasingly coming up into more conversations, especially in those categories that we talked about. In consumer electronics or media, it doesn’t come up much at all.   In contrast, in apparel, home and garden, sporting goods and jewelry; it is definitely on top of mind. I think part of it is that the competitive landscape is such that you have Amazon doing a lot of video, a lot of the flash sites are augmenting what they do with some nice video, and retailers feel like the bar is being raised with video and they need to catch up. You also have vendors out there that are offering a lot more services around video, so that retailers can outsource it if they don’t want to do it in house. There are even some that have templated programmatic ways to add video.  It used to be that if you have a lot of SKUs, you would think video is out of your range, but now maybe you can take your top 5% of SKUs and do a heavily customized video, and then the rest you do in an automated video. There are a lot of retailers experimenting with these different options that didn’t exist 2 or 3 years ago.

Justin Foster: I want to probe a little bit deeper there as well, and this is just with regard to importance of quality.  I think that a lot of retailers for a while now have believed that having high quality media assets, particularly image assets or even flash demos, are important, but there are still scalability issues with video.   You have this idea in which you do a higher quality, more customized kind of video for the top 5%, and then do the more automated video for the rest of the products. Do you believe that the automated method of producing video content runs a risk of harming the user experience of the shopper? Do you feel like those more automated methods of producing video add as much value?  What are your thoughts there in general?

Scot Wingo: There’s definitely a trade-off, where if it is automated, it’s not going to add near as much value as custom produced video. The automated ones I have seen fall under two kinds of experiences.  There are ones that add absolutely no value at all, and after you watch the video, you almost feel like you want those 30 seconds of your life back. On the other hand, others I have seen are somewhat informative and have told me things that I probably wouldn’t have known, so I think right now I’m kind of cut both ways with regards to automated video. I do tend to see more that are maybe a waste of time than that are helpful on the automated side, but I think as those technologies get better that they can perhaps further add value.

Justin Foster: That makes sense.  We call this the implied contract that retailers have with shoppers. We live in a very ADD culture in my opinion, where shoppers are clicking around a lot and are spending very short periods of time on different places around the web.  When you ask someone to watch a video, the contract that you’re making is that in exchange for giving me your time to watch this video, you have to add more value than the time you’re taking away from the shopper. It is interesting to hear you say that you think there’s a trade-off there.

Scot Wingo: Yeah, definitely.

Justin Foster: Before we wrap up, what are some of the largest obstacles that you see retailers facing with video?  What advice might you offer for those retailers?

Scot Wingo: When we talk to retailers, I think their main concerns are the cost. Obviously, if you’re going to do it in house, it’s extremely expensive.   Even with some of the outsource options that retailers try to look at, I think it’s their natural inclination to multiply the per item cost by the number of items they sell, and then that makes it really seem very large and insurmountable.

A lot of them also question the efficacy of video.  Many think that if it only moves the conversion rates 2%, it’s never going to pay for itself.  We often see this scenario where retailers think these problems are insurmountable, and we encourage retailers to just kind of nibble away the problem and do some smart testing.  The nice thing about e-commerce is that we have so much data.  If we know what the top sellers are, and we know what our conversion rates are on those items, you can pick 10 – 20 items and do a $5K-50k pilot test. Most retailers can afford to experiment at that level.  After you measure the conversion rate on those items, you have actually eliminated a lot of the variables, and you can actually make a smart decision.   Let’s say it increases conversion rates 10%, and then you can now do some math and figure out what items video will pay for itself.   In your test, if you pick some strategic products that span across multiple categories, not only do you eliminate one variable, but two. That is why we really encourage retailers to experiment with these things and use some smart a/b testing.  Then when you evaluate the opportunity, you can have a solid sense of what your video ROI would be, versus just kind of being scared of it.

Justin Foster: Absolutely. Good advice. Well Scot, do you have any other thoughts that you’d like to share with our listeners here before we wrap the interview?

Scot Wingo: The only other thing I would mention is that a lot of our retail clients tend to have low single digit conversion rates.  If you can do anything to move the needle on that, then the top line will grow, and the margin will just kind of come out of the equation.  Many of these video technologies can help move that needle, and they are definitely worth the time to evaluate.

Linda Bustos

I recently had the opportunity to interview Linda Bustos, Director of Research for enterprise e-commerce solutions provider, Elastic Path.  Linda is the author of the number #1 subscribed e-commerce blog, Get Elastic, and provides conversion optimization consulting to some of the web’s largest technology companies.   In the interview, Linda shares best practices and tips for using videos on retail websites, in email, and on mobile devices.

Enjoy!

Interview with Linda Bustos:

Justin Foster: Please tell our readers a bit about yourself, Linda.

Linda Bustos: I’m the Director of the E-commerce Research at Elastic Path Software. So a part of my job is writing for the Get Elastic E-commerce Blog three times a week on conversion, optimization, marketing, and anything to do with selling more products on an e-commerce site. Aside from that, I also do some consulting for our clients on the same topics. Prior to Elastic Path I was an SEO with a web design firm, where I had my first experience with online marketing for ecommerce sites.

Justin Foster: Briefly, can you share with us, what Elastic Path Software does?

Linda Bustos: Well, we are an e-commerce platform, and we’re focused more on digital commerce, technology and virtual goods.  Really, the big difference between retail and that industry is there’s different ownership, and different payment models, so our customers have different needs for our e-commerce platform, so we’re kind of niche.

Justin Foster: Got it, thanks for sharing that with us. Now I know Linda that you’ve blogged before on some of the benefits of using video in the context of e-commerce. Can you share with our readers what you think the most important applications of videos are in an e-commerce context, and where you think video makes sense in e-commerce?

Linda Bustos: Well, I think that video is the closest thing that we have to experiencing a product in your hands.  This is the big challenge about buying online things you have not seen in person, and relying on teeny tiny images on the screen. Plain and simple that is the big value of video, but also we know through customer research and that customers primarily want content. Although they like to read on the web, they want to see images from every angle.  Video allows you to see the product in use, and you can get a person actually demonstrating or reviewing the product, and giving you additional information that you can absorb better. Some people absorb by listening rather than reading.  It’s also interactive.  We have become a YouTube culture, so it just makes so much sense to bring the type of content that people want to consume to your e-store.

Justin Foster: Now, when you think about video, are e-commerce merchants mainly using video to sell products, or do they use it more for branding or for entertainment?  What is the right mix? Or does it really just depend on the brand?

Linda Bustos: Yeah, I think it depends on the brand. There are different functions of video, like you can use video to sell, you can use video to inform, you can use video to engage, and you can use video to build your brand and create a passionate community.  That’s more of the entertainment side of the videos that might appear like a blog instead of on a product page, or on your YouTube channel, on your Facebook page, or that kind of thing. So, I don’t think there’s any right or wrong way if you’re selling.  I think that making something more informative about the product and very persuasive is going to actually get you to the conversion, but it depends on what your goals are.

Justin Foster: You mentioned your focus on conversion optimization.  As we look at the different types of video content on the product page, what type of content makes the most sense would you say?

Linda Bustos: Well, product related content of course, but you can have multiple videos on a product page.  You can have one that demonstrates, you can also have a little section like Amazon has, where people can upload their own videos.  Just like you can have multiple sections of content on your product page, you can have multiple videos.  Now, keep in mind that that can add to the page load, and it can add to the visual overload of your product page. You don’t want to just throw it up there for the sake of, “hey, let’s have some more content, let’s have lots of videos up there.” It should be tested.  Know your audience and know your products, and also keep the videos very hyper focused. Even in length, you don’t want to have a super long video on there just because you want to explain absolutely everything that could be right on the product page.  Understand what parts of the video are going to be most effective to sell your products.  This might come out through your testing, or user testing or doing other types of research. It’s not necessarily whatever your gut feels is right, or what your team feels the first time,  there’s a lot of room for experimenting.

Justin Foster: What has been your experience in particular on the issue of video length best practices? Is there one length of video that tends to work the best? Or does it again, really depend on the brand?

Linda Bustos: Well, you’ll be able to see using your video analytics where people drop off during the video, so you’ll be able to know.  There are some products which are such highly considered purchases that people will watch an entire hour long webinar on the product.  There are some things that people only have an attention span for one to two minutes for video. There is a lot of research about that. If you can’t keep your video content down to a minute or two, then just break it up into chunks.  If there’s a software demo that goes on for ten minutes, we’ll break it down feature by feature, and give the user control to learn about the features that they find most interesting to them.

Justin Foster: That’s very helpful, thank you. What are some of the retailers that you think today are doing an especially good job with video? And what about their implementations do you like?

Linda Bustos: Well there’s a lot of different ways that retailers are using video, so for example Tiger Direct is selling electronics and they really understand the fears and uncertainties and doubts that their customers have.  I was looking for a camcorder. I don’t know what all of the technical jargon means about the features, I just wanted something that’s going to allow me to take good video, and something that’s easy for me to use.  I found that on their product page they had a channel with a personality who’s definitely trained in broadcasting.  It makes you feel excited about the product and builds trust. So you trust this reviewer, he comes across as an expert, and he demonstrates everything on that product in a way that that all the features and benefits are explained. That works really, really great with electronics.

If it’s a fashion site, look at As Seen On Screen over in the UK, they have multiple pictures, and also a runway and a catwalk.  You just see a model come down and turn around, there’s no narrative, there’s no close-ups or anything, and you just see the product in use. Other good examples are videos that are tell a story about the brand. For example, eBags, they have a lot of different types of video content and it sometimes comes from the manufacturer, and sometimes it’s produced in-house, but that doesn’t really matter.  Some are brand experiences where you want to know a little bit more about the designer and that appears on the category page.  The actual product specific videos will appear on the product page. So there are a lot of different ways that you can do it.  One other example is Dylan’s Candy Bar which sells all types of candy.  For their nostalgic retro candy bundle, instead of actually showing the candy or people eating the candy, they’ve got old cartoons on there.  It builds this atmosphere where you start getting nostalgic, and once you’re in that state of mind, you’re like, “yeah, I have to have this candy.” So, there’s a lot of ways you can get creative with video.

Justin Foster: Do you think it is okay to blend a little bit of entertainment in with the product oriented videos, if it’s congruent with the brand?

Linda Bustos: Yes…I mean you should test it as well, but yes definitely there’s room for that.

Justin Foster: That makes sense. Now Linda I want to switch gears a little bit. There’s been a lot of talk in the industry about video SEO and you indicated you have a background in SEO and web design, and I know that you’ve blogged about video SEO in the past.  I’m curious if you think that video SEO represents an untapped opportunity for a lot of retailers? Or do you think it is more of red herring?

Linda Bustos: No, I think video SEO is extremely important and even more so this year, next year, and the year after, because YouTube itself is a search engine, right? And we’re getting tablets and people love to watch video on their iPads, and even on their phones. People are searching in mobile engines now too, so it’s very, very important that your videos are being indexed, and that their meta data is being indexed, and the keywords that are actually in your video transcript are getting picked out. The most important thing that you need to have is a video site map inside Google webmaster tools or your other search engines, because that will show you where there is problems or errors with your file format or anything else.  It is also important to make sure all of your videos are hosted on their own URLs, so that they can show up in the video search.  You will know when you go into Google and it has links with image verticals, video verticals, and social links. The traditional SEO works tactics of building back links, creating good title tags, and syndication are important as well.

Justin Foster: You mentioned a lot of great tactical recommendations; let me see if I can list them out here: Publish video site maps, include video transcriptions, make sure that videos have their own URL, and include links back to videos.  Did I miss anything?

Linda Bustos: One more thing would be to utilize the video site map for troubleshooting. If you have some formats that are not working or if your tags aren’t working, the sitemap will show you where you can fix those problems quickly and easily.

Justin Foster: Great. Now moving on from SEO, I would like to touch on the topic of video in email. This July, Hotmail became the first major webmail client to begin supporting HTML5 video directly within the body of an email message. Do you see this trend of video in email accelerating particularly when it comes to retail and e-commerce? Or do you see it as something that just happens to be the latest bell or whistle, but doesn’t actually create value for retailers?

Linda Bustos: Well I think it poses a challenge for retailers, because now you’re going to have to segment your list by the clients that support video. So in this sense we have to create a campaign that works with compatible clients. I think it’s too early to know whether this is a proven tactic, so testing is really important. The videos would need to have some kind of clickable call to action either inside the video or around the video. What makes email works from our e-commerce perspective is its ability to generate interest; you don’t convert right from the email message. It’s there to generate interest and desire for your products and to point people back to your site and your site has to pick up that job. I absolutely think that there is a place for this in online retail, and that it can create a lot of excitement and interest in visiting your site again. It’s easier to show someone that video content right there in the email than to try and sell them in the email to actually come to your site to watch the video. I think there is room to test it and generate new ideas for using it, but I think it is too early to say what the best practices are.

Justin Foster: When it comes to using video either in or with email, do you feel that more email marketers are focused on driving click-through rate in e-commerce or more focused on driving conversion rate? And what is the metric that email marketers in your opinion should be focused on when it comes to determining the success of the campaign?

Linda Bustos: Usually with any type of metric, marketers want to drill down as far as we can into revenue. You can have a great conversion rate, and still have poor revenue. With any type of email, you have got to be focused on all the metrics, because all of them matter. If you have a low click-through rate, then you have to fix that because that will ultimately affect your revenue. Adding video in the subject line, just like you do in a blog post or in a Twitter post, might even increase your open rate. That’s something to play around with, and then measure open rate, clicks, and ultimately conversion. I think that if you’re just trying out video that it would be a success if you have a higher open rate than your regular emails.  It doesn’t necessarily have to convert more.  You would come away with the knowledge that putting video in the email subject line gets more clicks.  Then you could start to learn how to optimize the creative layout, and call to action.

Justin Foster: That’s something that we see as well.   Marketers that use video in the subject line of the email consistently drive higher open rates, and see anywhere between 5 – 20% increase in a/b split testing.  It can of course depend on the particular segment and retailer list. One last question for you Linda on the topic of mobile video: do you see real opportunities in the e-commerce space to leverage video on mobile devices for shoppers that are maybe in store, or looking to make a purchase away from their computer?

Linda Bustos: Yes, I think so.  Going back to that example of Tiger Direct, I could be inside the electronics store talking to a sales rep, and still not get that demonstration that I had on that video.  You can’t just open up boxed product, plug it in, and start using it to see if you like it. If the retailer had little kiosks, or had customers sales reps walking around with iPads showing video demos.  It would also be cool to have kiosks where you would be able to wave your mobile device in front of a larger screen and activate some kind of interactive video or multimedia.  There is so much potential for mobile video both in store and on the go. There are more and more mobile devices supporting HTML5 video with larger, more shopping friendly screens.  Many people are already using their smartphones to do quick searches while shopping, and that is where your video SEO comes back into play. The technology is going to catch up and I can see that rather than reading through tons and tons of customer reviews, people will be using mobile devices to see the product in action.

Justin Foster: Absolutely. Linda we’re close to out of time here. Do you have any closing thoughts that you’d like to share with our listeners here before we break?

Linda Bustos: If you are using video right now, congratulations, because you are now ahead of the pack.  Never stop testing, never stop pushing the boundaries of your creativity and make the most that you can out of it.

Event info:

When: Sept 28, 2010, 5:45PM
Where: Gaylord Texan Resort (Dallas), Pool Bar & Grille
Who: Intimate crowd of the web’s leading video commerce pioneers, “A” List
Contact: justin [at] video [dash] commerce [dot] org or 253-988-3183

This will be a “chill” event not to miss – possibly your highlight of the entire Shop.org experience.

Until next time… Happy selling!

Justin

I’m still digesting all of the information from the summit so beware the below thoughts are somewhat stream of consciousness as I reflect on the state of the video commerce industry.

• The manner in which retailers are using video varies widely today, however most e-commerce sites seem to be concerned mainly with product videos.  It wasn’t universal, but the focus on product video was unmistakable.
• Scaling video in e-commerce is a hotter topic than ever before, and it seems clear no one method of scaling is poised to dominate.  Automated video (e.g. SundaySky, Treepodia, DynamicVideo, Stupeflix) is preferred by Overstock.com (which uses SundaySky), but other retailers like REI choose to use a system like TalkMarket which automates much of the traditional filming process without creating artificial/computer-generated looking slideshow content.  Still other retailers are scaling through user generated video: Beautychoice.com scales through its YouTube “Beauty Stars” program while drugstore.com is using ExpoTV’s new integration with Liveclicker’s Video Exchange Marketplace to broaden access to user generated videos.  Zappos, which initially began using TalkMarket, has chosen to instead hone its own in-house production process to make video scale as they race toward producing 60,000 videos in 2010.
• I’m more convinced than ever before there is a direct response TV play for many retailers, especially lifestyle brands.  The reason is simple: TV offers reach.  Reach is the #1 problem faced by retailers today in their video programs.  It’s not about the number of videos, but rather making sure the investments in video are targeted enough that they reach a wide audience and focus on hot products that generate lots of revenue (HSN model, which btw is total opposite of the auto-video model in my view).  I’m unsure whether my view is shared by many retailers, but seeing HSN’s stats for the lifetime value of their multichannel shoppers for TV and web (~$1,250) is nearly twice the value of the shoppers that are only on TV or only on the web looks like a major opportunity for most traditional “web only” e-commerce sites.   Plus, smaller retailers like PFI have been able to make TV work with close to “zero” budget, funding efforts through vendor co-op programs.  Still, the lack of video as a core competency for most retailers, plus the inability of most retailers to make a sizable direct response TV play without direct CEO level support will probably hold most back for now although I do expect to see a couple of interesting announcements over the coming 12 months that are likely to propel the industry in this direction and further blur the distinction between TV direct sales and traditional e-commerce.
• Video SEO continues on as a hot topic in online retail.  This is the subject of a multi-part blog post, but suffice it to say many retailers see a big part of the immediate video opportunity comes in the form of better SEO.
• Guided video shopping is poised to become an emerging trend in the second half of this year entering into the busy Q4 season.  We’ll likely see several interesting cases from top retailers that are working to bring interactive video to the next level during the upcoming holiday.
• We held a ‘future of video’ panel with Dan Greenberg (Founder/CEO Sharethrough), Xavier Casanova (Founder/CEO Liveclicker), Yaniv Axen (Founder/CTO SundaySky) and Mark Robertson (Founder/Publisher REELSEO).  Some of the views held in common by the panelists included a) each person sees a rich future in automated, personalized video, although it wasn’t clear what form that would ultimately take b) successful video platforms will take open approaches while providing the right amount of rich functionality to appease the partner ecosystem while remaining highly competitive in the core product c) there is going to continue to be a blurring between brand and direct marketing with video, but the two worlds are still far apart.  It’s clear though that video is blurring the worlds of branding and e-commerce in new ways that are likely to have significant impact on the ways we shop and interact with brands.
• This video commerce industry feels like the e-commerce industry felt in 1998.  The future is bright for all of us in video commerce.  We’re still in the top half of the first inning in an exciting baseball game.  Until next time… Happy Selling!

Like many others, yesterday I huddled in line for close to 11 hours to pick up the coveted iPhone 4 (much to the chagrin of my wife, I’ll add). After playing with the phone now for half a day, I’m more convinced than ever that this phone is going to have a meaningful impact on the online video world.  Here are just a few initial predictions:

• More people are going to want to watch video on their phones because of this phone. Watching video on the iPhone 4 is actually pleasant.  While video on the older iPhones was a ‘game changing’ step forward in terms of quality, the higher resolution screen of the iPhone 4 pushes it to a new level.  Even skeptics are going to have a very difficult time arguing that the quality improvement made possible by such rich pixel density doesn’t make a significant and noticeable difference when watching video.

• HD video recording for the masses will drive user generated video into a ‘new era.’ The iPhone 3GS brought video recording capabilities, yes, but the 3GS was always a ‘stepping stone’ phone for Apple and its users.  It certainly didn’t generate the same level of excitement in the market as the iPhone 4.  When waiting in line to get my hands on the phone, one of the things that immediately struck me was the diversity of the crowd.  It wasn’t just a bunch of programmer geeks, design snobs, and urban hipsters that one might expect to show up for an Apple Fanboy rally.  People from all walks of life were represented.  The guy standing in line behind me was a landscaper who said, “I’ve never geeked out this hard for anything in my entire life.”  That sentiment was repeated over and over again when I asked others in line about their attitude toward the phone.

• FaceTime will advance the cause of interactive video. Apple has outdone itself with FaceTime, but there are major problems with this service.  Everyone knows about the wifi only limitation, but I’d argue that’s not the biggest issue (the iPhone released next year will probably solve it anyway –  phones like the HTC Evo 4 already support video calling over 3G).  To me, the bigger issue that that in order to participate in a FaceTime conversation, the receiver of the call has to be an iPhone 4 user.  If video calling becomes the ‘killer app’ of mobile, this could prove a critical misstep for Apple as it squares off against rapidly improving Android phones that take a more open approach.  I’m sure we’ll soon see video calling on iPhone for Skype and many other uses for the front facing camera in the App Store, but FaceTime itself needs to be more open.  The mobile world is moving toward more open standards.  If Apple isn’t careful, it will become a niche player in the smartphone market while Google becomes the Microsoft for mobile phones.  The PC v. Mac battle tells us that it’s the more open standards that usually win.

Whether the ultimate impact of the iPhone 4 on online video is large or small, the phone clearly sets a new benchmark for video playback on a smartphone.  This quality is sure to drive more mobile video consumption and push other device manufacturers to build more video-friendly displays.

Even if FaceTime ultimately loses out  to more open approaches, enough people will use it (and enough other smartphones will launch competing services) that retailers will need to seriously consider possible uses (customer service calls, shopping assistance onsite, more mobile video reviews).

And finally, the macro-trend, the one of an ever-expanding mobile audience, is one that online retailers ignore at their own peril.  Consumers want video, and if my 11-hour wait in line yesterday is any indication, they also want the iPhone 4.

Until next time,

Happy Selling!

This year REELSEO is attending the IRCE in Chicago.  The VCC is assisting REELSEO in identifying any retailers that may be interested in being interviewed for an upcoming article on online video in e-commerce.  If you or one of your teammates is attending the Internet Retailer conference and is interested in an interview opportunity, please drop me an email at justin [at] video [dash] commerce [dot] org.

The webinar covered:

- Overview of what HTML5 video is

- HTML5 video adoption curves

- Browsers and devices that support HTML5 video (and those that don’t)

- The state of HTML5 video codecs (OGG Theora, H.264, WebM) and why they matter

- Flash v. HTML5 video

1. Apple has no plans to support Flash on the iPhone or iPad.
2. Ever.

As an online retailer, why should you care?  For starters, over 1 million iPads have already been sold since its launch (in 28 days).  That is twice the pace of sales as the original iPhone, despite the iPad’s higher price tag.  Love it or hate it, the iPad is a hit.  With a bigger screen, consumers may quickly make the iPad a strong force in e-commerce for the simple reason that it can be easier to shop on a screen with larger dimensions. Second, iPhone sales are booming. Apple sold 9 million iPhones in the second quarter alone.  In 2009, it sold around 25 million iPhones. A new iPhone will likely be announced this June.  Apple is on a tear.

We posted on HTML5 earlier on the VCC and its relevance to video commerce, but since that time several important developments have taken shape in the industry.  MPEG-LA extended free licenses for the H.264 codec through 2016, providing the marketplace with additional certainty around the viability of H.264 (what happens after 2016 is anyone’s guess).  Second, Microsoft announced HTML5 support will be included in Internet Explorer 9.  HTML5 video is already supported in Firefox (3.6), Chrome (3+), Safari (3,4).  Now that Microsoft is in on the HTML5 party, all the major industry players in the browser game are aligned.

If you are not supporting HTML5 today on your site, it is something to consider strongly.  With surging iPad sales, soaring iPhone sales, and what is likely to be strong next-gen iPhone sales (many purchasers of the original 3G iPhone have expiring plans with AT&T this June and may look to upgrade their phones subsidized with a new plan), retailers can expect to see more shoppers using these devices.

Until next time -

Happy Selling!