Steve Rosenbaum made his name on MTV and doing documentaries. So it’s natural that he’s into Web video. Rosenbaum is the founder and CEO of Magnify.net, which powers user-generated video (UGV) channels for Web publishers, media companies and video bloggers. The Magnify. net platform searches and sorts virtually all video available on the Internet based on a site’s interest (such as hobbies, politics, music) and engages users to discover, share and rate them for relevancy and entertainment value.

Magnify.net came out of closed beta in January 2007 at the DEMO conference and had 20,000 to 30,000 page views a day. It is now averaging 350,000 and was on target to pass 10 million page views in October. Currently there are more than 15,000 channels for users to discover.

Revenue magazine Senior Writer Alexandra Wharton asked Rosenbaum how he got interested in collaborative media production, how users can provide tools to build vibrant video communities and about the impact video will have on marketers and performance marketers

ALEXANDRA WHARTON: Although user-generated content has been all the rage for the past few years, you have been involved in it for much longer. How did you get interested?

STEVE ROSENBAUM: I’ve always loved hearing the authentic sound of a storyteller’s voice. So before video, that meant autobiographies, diary entries or journals – I found the raw and intimate nature of first-person storytelling very compelling.

I have been a filmmaker, and more of a visual storyteller, but there really wasn’t much of a place for first-person media in film or TV. The gear was just too big and expensive.

Then, in 1991 I got an 800 number and had viewers to my TV show call in and record their story ideas. I put their voices on the air. It was amazing. In 1993, Sharp released the first LCD ViewCam and made it possible to shoot yourself on video.

The result was a show I created for MTV called “UNfiltered.” It was a program that literally put the power of TV in the hands of the audience and let them shoot their own stories. People were hungry to express themselves and become part of the conversation. That’s only become truer today. You can see some of the clips here (www.unfiltered.Magnify.net).

AW: Can you explain how a user could use Magnify.net to create a community?

SR: Magnify.net takes the idea that communities want to communicate and gives them the tools and resources to activate video sharing and engagement within their site. Really any site can do it. If you’ve got a site that is up and running, but you don’t have video yet, Magnify.net will let you choose your URL, and pick topics and keywords that you want video around. Then Magnify.net discovers the video and your community can act as the peer-review rating system.

AW: Do users need to be technically savvy?

SR: Magnify.net is built for site creators who are passionate about their content and community – technical skills are not necessary. All the tools are drag-and-drop simple; there are a few bits of code and you’re done. We have great tech support: FAQs, discussion boards and quick responses to our support ticket system. Other community members are supportive as well. It’s easy, fun and is ready to grow as your skills and abilities increase.

AW: You have been credited with creating a new paradigm for community- created video – did you always see the potential to monetize it?

SR: This may sound simplistic but I see the future opportunities for revenue clearly. Currently there is an advertising system that is optimized to reach a mass audience. TV media is designed to be mass media. But if you look at Google, for example, the real future is in aggregating the niches and providing contextual advertising into those verticals. Just look at the readers of this magazine. Many of them have sites that serve extraordinarily narrow audiences. But they have large defined audiences.

So yes – I think there will be an inevitable shift as more systems can target focused audiences. Content creators and community curators who do a good job creating high-quality audiences will be well-positioned to garner revenue as the spend against community-curated UGV increases.

AW: How does Magnify.net help serve those who want to build a community around a very niche site?

SR: There are two models: those who want to start from scratch and build a site, and individuals who have already built a site and want to add video. Two examples of this are PrettyToughTV.com and Radio Controlled Universe, respectively.

Pretty Tough TV [www.prettytough.com/video.php] is a network of Magnify. net sites created on Magnify.net that serve serious female high school athletes. It’s the work of a mom and her two daughters in Los Angeles who have a passion for sports. Magnify.net allowed them to build 14 channels into a sports network that they run out of their den.

On the other hand, there is the site Radio Controlled Universe (www. rcuvideos.com), which had a successful website with 300,000 registered users. When they built their Magnify.net channel, hits on the videos were through the roof. Now they’ve got thousands of video makers and watchers and it is growing every day.

AW: Can you explain Magnify.net’s sites’ different types of advertising, including Google AdSense ads and integrated ads?

SR: We’ve built a solution that has three user configurations: advanced, moderate and hobbiest. The “advanced” users are going to claim their own inventory. That means banners, in-page display, CPC, CPA, text, and click-to-play video space on our pages. They’re going to bring their own ad relationships with CJ, LinkShare, Performics, Google AdSense and Amazon – whoever they want. They’re getting paid directly so there’s no waiting for us to reconcile and no crossed wires over payments. This is ideal for advanced affiliate marketers.

For the “moderate” users who want revenue but don’t want to be spending time on optimization and multiple ad network management, we offer a one-click integration with AdSense – just put in the AdSense ID and Magnify. net will do the rest.

And for the “hobbiest” that is using Magnify.net for the occasional video, you don’t need to claim any ad space at all. Odds are that for the casual user sites, they are not going to be participating in the ad network. Of course if traffic grows, they can claim their 50 percent of the traffic with AdSense.

AW: Can you talk about the AdShare Network that launched in August, which aims to allow site creators the ability to broker more lucrative deals with advertisers?

SR: For Revenue readers, our AdShare network is really the most interesting alternative. It costs nothing to build a video page and gives 50 percent revenue share.

We think that empowering our users to make their own decisions about content curation is smart for all. YouSurfTubes is the world’s largest collection of surfing videos [www.yousurftubes.Magnify.net/]. Its site editor, DC Smitty, knows more about surfing than we could ever hope to. He also knows more about surf products and surf advertising. We think that over time, the more our partners fine-tune their pages to increase revenue, the more we will learn from them and improve the targeting and contextual relevance of our ads on those pages as well. Relevant ads serve everyone – sites look better when all the ads are appropriate and useful.

AW: Can you explain how to create a branded TV channel that pushes content through Facebook?

SR: We think that in some ways, Facebook is the future of network television. It’s the most direct way to plug in to the zeitgeist of what your friends think is cool, valuable and entertaining. We think that Facebook groups could be a lau

nchpad for all kinds of things. Right now we’re learning a lot with our current Facebook application. It allows users to take their Facebook profile and use our technology to discover videos that meet their interests and share them with others on their profile page.

AW: How important is video to the performance marketing model?

SR: First, we believe that video will be ubiquitous on the Web within 24 months. That’s a sea change in the way people will be presented with information. Second, we think that the integration of UGV into content-oriented sites is inevitable and important. It means that publishers that have been marketing themselves as “speakers” will have to rebrand and rethink their offering and transform themselves into conveners of conversation really fast or miss out.

So performance marketing is logical as a partner to UGV because not all UGV is useful or valuable. And not all marketing messages have value. Now, customers get to vote – literally – and support marketing that supports sites they like simply by engaging in commerce within a context they want to support. This could be a powerful shift.

AW: If businesses are not currently using video, how do you suggest they dip their toes in the water?

SR: With both feet. There’s little to lose right now since it’s early. Customers aren’t yet critical and therefore won’t punish you for a misstep or a test. That doesn’t mean you can afford to have inappropriate content on your site, so curation is critical and essential. But it doesn’t need to cost a fortune. It can be as simple as adding video to an editorial product, getting some footage at a trade show or inviting your customers to videotape themselves using your product. But it needs to be interactive and enjoyable.

AW: What does video bring to online marketing that others can’t?

SR: Video is emotional – it can touch you in ways that text and photos cannot. It’s immersive – it can draw you in and take you on a journey. Video is convincing – you can convert people with a compelling pitch. But all of these things mean that you need to strive for authenticity and honesty – and really make an effort to go beyond marketing and into genuine storytelling. The Web is going to bring new tools to the experience as well – you’re going to see branch-and-tree video tools that allow viewers to respond to a story and have the video be responsive to that input.

For example, a company that’s touring a potential buyer through new construction of a high-rise could emphasize the playroom for families, and the neighborhood’s nightlife for 20-somethings. Old, one-size-fits-all video just won’t be enough, and that is what’s going to fuel innovation.

AW: Where do you see online heading in the next two years?

SR: I think the Web is the launchpad, not the destination. I think you’re going to see Web-programmed video on your flat screen [IPTV], and the iPod and iPod devices are going to be huge, and the iPhone will spawn a huge number of imitators.

The Web will be the engagement platform – it will be the place where you interact and “program” your video. I think that you’ll see RSS streams of your favorite Magnify.net channel on your TV within 12 months. That’s huge for marketers and users alike.

From a quality perspective, H.264 [a video compression standard] will mean a major jump up in quality. Not HD yet, but video on your TV that is looking good from the Web. For those of us that suffered through streaming video the last time, this is a major shift that’s been a long time coming.

In terms of revenue, you’re going to see two major changes. First, there are a ton of unhappy TV advertisers just dying to get their ads on the Web. It’s been a chicken/egg scenario – what comes first, the ads or the content to place them around? Now we know: Content is happening, and ads are next.

The second major change is the nature of who uses video for ads. We think of video ads as the realm of the big boys: national advertisers with big budgets. But that was back when making video and editing were expensive. Now with a digital video camera and a Mac with Final Cut Pro, you can whip up a great video ad for a couple hundred bucks or less. So as marketers figure this out, they’re going to jump to video in droves. Will it work for everybody? Certainly not. But for some categories it’s going to be huge fast – it’s a very exciting time to be in this space.

AW: What would you say to CMOs of big brands to convince them that video must be part of their marketing efforts?

SR: Most big-brand CMOs already know video works – they’ve been buying TV for years. The thing they’ve been facing is that there’s been a huge defection of the hard-to-reach consumer from TV to TiVO, DVD, the Web and other mediums that don’t do well using interruption advertising, so CMOs need to rethink how they talk to these customers. We don’t want to have our time wasted; we want to be educated and informed.

Community content is a powerful new tool that is just evolving – and it’s much nuanced, meaning that the line between education and evangelism is hard to walk. I think you’re going to see much more of what Seth Godin years ago called permission marketing – using video to deliver serialized messages to people who opt in. Today what a smart CMO should be doing is experimenting, taking moderate risks in a number of different platforms. The good news about all this is that it’s all measurable, so in the end, the new video-based solutions that will rise to the top will be the ones that work both for users and marketers.