You’d think by now content companies, especially the large portals, would have figured out a better way to deliver online video ads in a compelling manner. But if Yahoo! News is any indication, the world of online video advertising has a long way to go before this business grows like we all want it to. Delivering online video ads is still a terrible user experience with un-targeted ads, of different lengths, too often in the content whilst taking away all of the user control.

If you want to see clips from the show 60 Minutes, Yahoo!, through a deal with CBS, has created a portal at http://60minutes.yahoo.com. While the interface of watching and finding videos is decent, the entire business and delivery of online video ads is horrible.

I chose to watch the story about online gaming and a window popped up with the video and nine thumbnail videos below the main window. Before the start of the video, I was delivered a 30 second ad for Netflix. While the ad was playing, nothing on the website was clickable, forcing me not to be able to click on any other links and disabling all content on the site. And once the ad was over, the video that played was only about a minute in length. What Yahoo! has apparently done is taken the 60 Minutes segment on online gaming, and cut it up to nine one minute segments. So when a user clicks one of the other thumbnails to watch the second section of the video, they get another ad, again for Netflix, again 30 seconds in length before you get to watch a video that’s 48 seconds long.

And if you want to watch all nine segments of the show, get ready to also sit through nine ads. Adding this up, I have to watch nearly four minutes of ads, to see a segment of content less than nine minutes in length. And the ads are completely un-targeted. I got 6 Netflix ads, and 3 ads for online trading. So why is there no ad system in place showing me different ads? Does Yahoo! really think showing me the same ad six times is what consumers want or is effective for the advertiser? And why were some of the ads 15 seconds in length and others were 30 seconds? In the same piece of content you’re delivering two completely different ad lengths which is a horrible user experience. I get a fifteen second ad which I then get use to with this content, only then to be delivered one twice as long when I watch part two of the same piece of content.

And even if you let all nine of the videos play back to back playlist style, Yahoo! still puts many ads before each of the segments breaking up all of the content into way too many pieces. If a segment like 60 Minutes is under nine minutes in length, it should not be broken up into nine pieces. And why is it that the 60 Minutes episode that is on the Yahoo! portals home page, is one from close to a year ago and not from the episode that aired last night on TV? The story of online gaming was one I saw on TV at least six months ago. But the one I saw last night on TV is no where to be found on the Yahoo! website.

To find it, I have to go to a different website. And not the CBS Innertube website where you would think it would be since that is where you can watch full-length CBS shows, but rather you have to go directly to the 60 Minutes website on CBS.com. And once there, while I can find the video, see the screen shot on how it plays. It is embedded into the page, in a window that is larger than it actually plays in. But I guess I can’t complain since while the video window is super small in size, it is free of ads.

For all the talk of how big the online video industry is, it’s not even going to be a billion dollar industry this year, compared to TV advertising which is expected to do over $22 billion this year. While many times different segments of the online video industry say that the business models are what’s stopping the growth of an industry and not the technology, when it comes to online video advertising it’s the opposite. Online video advertising technology still does not provide the level of functionality, standards, reporting, targeting and interactivity that is needed to drive this business forward a lot faster. The technology needs to get fixed before this business can really start to take off.

It’s good to see that I am not the only one who thinks people are crazy when they say that TV is dead. TV is not dead. People kept telling me they don’t watch TV anymore and only use their computer for video. What are they watching? Nearly every single show I watch is not available on the Internet today, in any form. TV is the only place I can see it. Yes, other means of distribution are going to affect the TV platform, but people are not abandoning the TV in favor of video online like people make it sound.

And to date, those creating content for the web are not creating the type of content that I personally want to watch. And even if they were, can I get it in HD? No. Can I watch it on a large screen? No. Can I easily watch it on my computer with someone else? No. When I travel and am in a hotel, is there a computer there? No. Can I TiVo it? No. Can the Internet scale like TV? No. The TV and the PC (or Mac in my case) are not the same platforms, showcasing the same content, or providing the same kind of experience.

An article in Business Week recently said, "when the line between the TV and Internet will blur…" and it’s a comment you hear all the time. The line will never blur between them. They offer different experiences, on different devices, one via a closed network, one open. Yes, they will have some cross over, but they will never "blur". No one will even confuse their PC for their TV or vise versa.

And it’s good to see that Google agrees. Vincent Dureau, head of TV technology for Google in a keynote address at the Internet Television Technology Conference this week said that, "on the surface it looks like TV is dead, but I believe there is actually a bright future for television." EETimes.com has details of the  keynote here. Some of their coverage said: Every minute six hours of video is uploaded to Google’s YouTube service. What’s more, "every day 95 percent of the YouTube library is watched at least once," Dureau said. That implies there is a broad, but fragmented audience for a wide variety of content. "You need to make the long tail of this content available, and the tail is very long," he said.

But I do disagree with Dureau when he says that the biggest problem right now is that users can’t find the content they want to watch on the Internet and it’s no surprise he says that search is the way to solve this problem. For me, it’s not trying to find the content online that’s the problem. The problem is that the content does not exist online. And telling me that there might be other content that is "similar" to the content I am looking for is not an answer.

If I like to watch MacGyver, which I do, then I want to see MacGyver shows online and not something that someone created that may be similar to it. I want to see that specific show. So search is not going to help me there. The Internet is not yet ready for TV as we know it and in my eyes, there is no such thing as "Internet TV" even though it is a phrase widely used in the industry.

So many press releases and reports I read still talk to broadband adoption as if we are still in the year 2000. They say things like "due to the growth of broadband", "because of the proliferation of broadband subscribers" and "the widespread penetration of broadband" etc… broadband access is not the reason online video usage is growing.

At least 55% of all connected households in the U.S. are already accessing the Internet via a broadband connection (some reports say as high as 63%) and the majority of all users who are on a computer at work are on broadband. Yes, the downstream speed of broadband is growing but anyone who is on a DSL line gets at least 1.5Mbps which is plenty fast enough to get a 300Kbps stream, which is considered broadband today. And it should also be noted that two years ago, the standard rate at which "broadband" video was encoded, is the same it is today. So for all the hype around broadband, two or three years later, we’re still encoding and consuming the majority of our online video content at the same speed. So the growth of broadband has done nothing so far to change that.

When you talk to a company about it’s services or products in the space it’s amazing how many of them always throw in the broadband growth sentence as if they have to mention it, as if that validates something or makes them look like they "get it". And most times, if you then ask them for market data on how broadband is growing, at what speeds and in what regions, they have no idea. It’s like somebody in their marketing dept preps them and says "make sure to mention about how broadband is growing." I see it all the time on CNN as well when they interview someone on the stock exchange floor. The person being interviewed always make a reference to some aspect of broadband if they are from a tech company.

Yes, broadband plays a role in the consumption of video, but we’ve had over 100 million households with broadband access for almost the past 4 years now. We should be talking about the real factors that are driving the growth of online video and more importantly the factors that are limiting the usage and growth.

The session I moderated last week at the NY Video 2.0 Meetup entitled "What’s Next for Online Video Advertising" has now been archived thanks to Viddler. We had a good session with a lot of questions from the audience for the panel of speakers from NBC, DoubleClick, ScanScout and OMD.

The NY Video 2.0 Meetup is a free event organized each month by Yaron Samid over at Pando Networks. Each month the event draws 150-200 attendees and focuses on a particular topic in the industry. If you are in the NYC area this is a great event to attend for lively Q&A and networking.

If you are a blogger that covers the online video industry or any facet of it including infrastructure, advertising, content, etc…. I am looking for a few more moderators for the Streaming Media West show taking place in San Jose from Nov. 6-8th.

I have some sessions already planned out that you can jump on or you can write your own session topic and description that you want to organize a panel around. I am specifically looking for bloggers/writers who cover the industry and have insight into the business and technology trends taking place.

If interested, please e-mail me or call me at 917-523-4562. Note: I already have a lot of bloggers on board so only a few spots are left. Contact me ASAP if you are interested.

Since my post three months ago entitled "Comprehensive List Of Stream Hosting Providers" much has changed in the content delivery market. That being the case, here is an updated list of content delivery networks who support streaming media delivery. Notice I didn’t say "video delivery" but rather "streaming" since many companies can deliver video via progressive download off of web servers but don’t support streaming via media servers. I also classify a content delivery network as one that providers deliver services from more than just a few locations and has its servers located in at least the North America and European regions.

Now that being said, this list does not take into account P2P providers or networks that are more of a hybrid or the ones that classify themselves as non-traditional CDNs or are P2P based. That list can be seen here and will be updated shortly as well.

Here are the networks I track, in alphabetical order.

• Akamai
• CacheLogic
• CDNetworks
• Ignite Technologies
• Internap
• Level 3
• Limelight Networks
• Mirror Image
• NaviSite
• VeriSign

What’s interesting to note about these ten providers is that only Akamai and Limelight have streaming media servers deployed in the Asia Pacific Region. Many of the other providers are working to build out that capacity for the near term, but don’t have it today. CDNetworks is the one exception in that they are based in Korea, but have since entered the U.S. market with a streaming media offering serving content of out nine locations in North America. I will have a more in-depth profile of CDNetworks next week.

Level 3 announced this afternoon that it had acquired Dublin based Servecast, a provider of live and on-demand video management and streaming services for broadband and mobile platforms. Level 3 paid approximately $45 million in cash for the company which did about $5 million in revenue for 2006. Servecast his a nice suite of content management tools for the enterprise and the media and entertainment verticals and has a good reputation in the European market.

No surprise here. As I wrote about a few months ago, Level 3 is looking to be a serious player in the content delivery market for audio and video. While some doubt whether or not a networking and carrier company can really thrive against the larger CDNs, I think they can and will. They have all the pieces to be able to provide a value service offering based on the entire ecosystem for content as opposed to just pushing bits.

When Level 3 launches with their streaming media based service in Q4 of this year, I expect they will become a serious competitor right out of the gate. There is no sign of the CDN market slowing down and with the arrival of new companies in the U.S. like CDNetworks and the P2P and next generation delivery networks gaining some traction, the fight for the content delivery market is really about to get serious.

Beet.tv has an interview with Level 3’s Lisa Guillaume from the Streaming Media East show in May.

Note: I will be profiling CDNetworks, Internap and Move Networks in the coming weeks.