Chris Baus

Video: It's going to be big!

I’m not exactly proud of it, but I wasted a few braincells watching YouTube on a Saturday morning a couple weeks back. It started innocently enough. I was reading up on the situation at Fukushima, and came across Evelyn Mervine’s interviews of her dad Mark Mervine. But those pesky suggested videos kept grabbing hold of my mouse pointer, and I kept clicking.

When I’m browsing around on YouTube, I oddly find myself drawn toward aviation videos – who isn’t intrigued by 747s making low clearance landings over a beach in St. Maarten? Clicking the aviation links found me in the midst of Radio Control (RC) airplane geekery. On YouTube, RC is ruled by Dave Powers, whose long, long tail channel, has attracted 10s of millions of views – yes millions.

I couldn’t help but get sucked into Dave Powers enthusiasm for topics such as adding gyros to home built foam RC planes. After watching these I started thinking, “Wow, this guy really likes gyros! I need some more gyros in my life!” Although the videos have a home-spun-edited-with-iMovie feel, the fervor for topics like high-alpha flying and the advantages of air-brakes makes them entertaining. Entertaining enough for RCPowers to sustain a small business selling plane plans off the traffic generated by YouTube.

It might be easy to dismiss RCPowers as a fluke that went viral, but then in another click, you dive even deeper into the long tail rabbit hole. Check out FliteTest. FliteTest is a near production quality weekly video with a cast of scripted characters, all about, you guessed it, RC Planes. FliteTest is produced by StoneKap, a small shop in Ohio with a few HD cameras. This caught my attention, as YouTube has gone way beyond a guy with a webcam playing Sweet Home Alabama in his bedroom.

As I clicked the hours of my weekend away, I began to realize that while everybody has been busy talking about social strategies on Facebook and Twitter, YouTube has been quietly blowing up into a billion dollar business. Which lead me to another realization: video is going to be big! Ok, so maybe I’m a bit late to this realization, but I think the boom is just beginning.

Last fall I had a conversation with the CEO of smibs.tv, Peter Urban. Peter told me about his business of creating online talk shows, and his bullishness for online video. He mentioned how he was creating multiple studios to record his shows at different locations around the world at a reasonable cost, and how internet video was quickly catching traditional TV for advertising in the critical 18-25 demographic. At the time, I started to wonder if these studios could be also used by executives to record presentations for their companies.

Video is becoming so pervasive, I believe investors and customers will begin to expect more transparency from executives they do business with. As an example, Apple produces videos after every major product release – here’s the latest for the iPad 2 release. Plus all of Steve Jobs’s keynote speeches are available as well. As an investor in mortgage REIT, Annally, I appreciate the quarterly reports by CEO Michael Farrell. I have a better understanding of the company’s political leanings and it provides me an opportunity to decide I agree with them. Which begs the question, why don’t all asset managers do this? Eventually I think they will.

The end result maybe the politicalization of management positions, as CEO’s and executives become more publicly visible as spokespersons for their companies, but I think this transition is inevitable, and I don’t think it unreasonable expectation of shareholders and customers to hear directly from the executives they invest or do business with.