A major inhibitor to video revenues online so far has been audience size. Despite advances in the quality, quantity and length of videos on the web, most people aren’t watching them. To date, 99% of all video viewing is still happening in front of television sets.

But online video network blip.tv is looking to get bring its content where the audiences are. Today the
company announced a partnership with YouTube, Tivo, Verizon and Vimeo
among others to get more of its content around the web and to
television sets.

The company has long been working to distribute its content across as many platforms as possible. And today’s announcement marks a big jump in the size of the company’s footprint. That strategy is the key to the success of blip — and the online video marketplace.

Television networks and content creators are concerned about
spreading themselves too thin online. Currently, online video ads don’t
make nearly the profit that they earn against network content on TV.
But unlike the struggles that online publishers are having with text advertising, imbedded video advertising means that
online videos can earn money whenever they are viewed.

Due to the portability of online video ads, the blip content network (comprised of many amateur and professional content
creators) has long been working to syndicate its shows to as many
places as possible.

Blip gets about 72 million views per month for its content, but only
does about 4% of its total video stream on its site. With ads
built into its videos, blip doesn’t care where people are watching
their stuff. The more people that view blip videos — regardless of
where they are — the better.

Now blip content will be fully monetizable on YouTube and Vimeo. Blip splits all
advertising revenues with show creators 50/50 after giving partners a share of the ad profit, but to increase monetization, blip is announcing a new partnership with video ad network FreeWheel to optimize its ad options. TubeMogul will also provide video analytics, like in-video engagement and lost viewership. A new dashboard will help video creators see how, when and
where their videos are being viewed.

For YouTube, a site that wants to become a completely comprehensive video portal and
search engine for video content, an official blip partnership makes a lot of sense. According to George Strompolos, head
of strategic partner development at YouTube: “When someone runs a
search, we need to have an answer. The more partnerships we have, the
more successful we can be.”

And blip creators will be excited to send their videos to more locations. According to Robert Miller, producer of blip shows Political Lunch and That Sports Show, “The days before blip were like being flogged in a medieval torture chamber when we treid to distribute. It was very painful.”

The announcement promises to be profitable for blip. According to TechCrunch,
the video startup currently gets a high ad rate (an average $10 to $20 CPM), but YouTube gets 6.6 billion streams a month and its users are uploading 20 hours of videos every 60 seconds. Blip
estimates the partnerships announced today will double its 72 million
monthly views, and that doesn’t seem like an implausible estimate.

But the real news lies in getting blip into people’s homes who aren’t online video users.

According to blip CEO Mike Hudack: “Distribution is everything. The
audience is spread out. You need to find them where they are.”

To date, they are still at home on the couch. But getting web video on televisions has been a slow process.

Roku, Tivo and Verizon will now offer access to blip shows via their set top boxes. And NBC’s local New York channel will start showing blip content. These motions towards greater television distribution may be small steps, but will work toward helping user created videos compete with network produced content.  

As Hudack said this morning: “We’re on our way to actually creating an
economy where your talent, determination and hard work are a greater
determination of your success than who you know.”

Online video has a long way to go before it will earn anywhere near the money that the networks are bringing in. The online video advertising market is only expected to be a $1 billion business by
2011 and earn $2-7 billion by 2012. In contrast, the entire video ad market is currently hauling in around $70 billion.

But part of the challenge in growing the online ad market lies in creating quality content and making it easier to view it.

Says Hudack: “I’d like [television viewers] to be able to sit on the couch with their remote and not differentiate whether a show comes from ABC or NBC or that guy in his garage. It shouldn’t matter.”

The next step is getting people to use those remotes to actually watch online video content on their televisions.