This morning I attended a panel "Advertising Models for Video on the Net" at the Video on the Net conference (co-located with VON). It was interesting, somewhat educational, but not startling. Worse, they were talking about CPMs, 15 second ads and product placements. There was some mention Google Adsense, but no real focus on the long tail or on radically new business models for Internet video. I wasn't left with the sense these people understand what it's going to take. But then I don't have an answer either, so who am I to speak.
For the next Video on the Net, I am going to suggest Jeff recruit Umair Haque to speak. Umair hasn't proposed a specific business model, but he does have a good analysis of where the new business model will lie.
The moral of the story is simple. You should see Heavy and YouTube as opposites in strategic error. Heavy doesn't create enough value consistently enough to be able to exert enough pressure to capture a significant share. YouTube, on the other hand, is creating a great deal of value - but also can't exert enough pressure to capture a significant share.
Let me put it more simply: focusing on being a channel or being a platform is the gap between value capture in the next media economy. It is going to be a kind of mournful refrain, an error players make over and over again.
Instead, capturing value for consumer-focused players depends critically on being able to plug brands and ads into the social and cultural structures of interaction itself, to make return on attention hyperefficient - like Myspace is doing.