The Benefits of Signing On With Microsoft's Movie Maker

Both POPcast and VideoShare have previously announced that they will provide video hosting services for Microsoft Movie Maker when it hits the market in mid-September. Movie Maker will come bundled with the upcoming Windows Millennium Edition, and thus has the potential to put 28 million new webcasters on the Internet. When it is initially released, the software will name POPcast (http://www.POPcast.com) and VideoShare ( http://www.VideoShare.com) as the application service providers (ASPs) users can choose to serve, store or share streaming video created in Movie Maker.

This makes for strong positioning. But it's not necessarily consumer brand awareness that interests POPcast and VideoShare, both ASPs operating in the B2B marketplace.

The benefits will be much more indirect. More people making home movies will mean that more sites will focus on accepting and serving those movies, either for public viewing, or for friends and family. And those sites will need to be video-enabled.

"Very few sites, if any, will want to develop the capabilities to serve video," stated Gerry Brown, VP of Business Development at VideoShare. He hopes VideoShare's investment with Microsoft will bring returns in the form of new clients choosing to integrate VideoShare's services into their sites.

Getting a mention as an ASP for Movie Maker isn't cheap. Earthnoise, which hosts user-submitted videos, was approached by Microsoft with an offer of sponsorship - a deal that would make perfect sense for Earthnoise, which depends upon user participation to drive site traffic. However, according to Adam Siegel, VP of Product Development at Earthnoise, the price of a sponsorship was prohibitive: $2 million for top billing, or $90,000 to be included on a list of many other ASPs in Movie Maker.

Microsoft was not willing to comment on the price of Movie Maker sponsorship; however, the company did provide a few details. According to Microsoft, Movie Maker users can choose to use any ASP they like. After creating a video, users proceed through the submission process, part of which involves choosing an ASP and a destination site for the video. A list of ASPs will appear underneath a "Sign Me Up" button.

POPcast apparently got a much better deal on its Movie Maker sponsorship than its competitors. According to Founder and CEO William Mutual, POPcast did not pay a licensing fee to Microsoft for its positioning on Movie Maker. "The deal that POPcast has (with Microsoft) is a deal that nobody else has," he said.

According to Mutual, this is because POPcast was involved in the engineering of Movie Maker and its components, and during beta testing users employed POPcast's hosting services.

POPcast intends to use its position as the first ASP on the Movie Maker list to create vertical networks. According to the company, when users choose POPcast, they are led to a list of POPcast licensing partners - channels where they can publish and share their content. POPcast will generate revenue from the licensing fees it charges these partners. If POPcast can recruit the most popular consumer sites to use its services, it may be able to create a powerful marketing mechanism. Conversely, a site that partners with POPcast may have a better chance of capturing traffic generated by Movie Maker.

In addition, POPcast says it will announce a major branding rollout in conjunction with Microsoft within the next couple of weeks. On a separate note, VideoShare has announced that they are providing the video hosting services for the Lycos VideoCenter.

Users will soon be equipped with more options for sharing and creating their personal videos, and POPcast and VideoShare are positioning themselves to capitalize.