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Open Television Network: YouTube meets iTunes?

How to make money by distributing media over RSS.

The Open Television Network launched today. Don't let the name fool you: If you go to the site you won't see a competitor to YouTube, Hulu, Joost, or the like. OTN is a behind-the-scenes platform that lets small-fry media publishers sell content that's distributed through RSS.

This is a neat trick. OTN lets you subscribe to an RSS feed with audio or video content so you can see the headlines of new articles in a media player like iTunes or Miro (see story, Miro LeavesBeta) or the Zune player. When you click on a particular item to download it, your OTN account is debited.

The network, such as it is, leverages a technology the company previously built, called KlickTab. Users need to establish an account first, and then whenever they want to buy content from an OTN publisher, that account is debited.

Small publishers can sell their media via RSS using OTN's platform.

Publishers, likewise, sign up on the OTN site. They're given instructions to publish their content to the OTN servers so the technology can track downloads and credit their account. The site is self-service, and there are no content gatekeepers. Pornographic content is removed, though.

There is no DRM inherent in the OTN universe. While file locations are obscured through the system, downloaded files are not protected. Once they hit a user's machine, they can be copied.

I discussed this philosophy with OTN CEO Philip Hodgetts. My takeaway is that OTN was not designed to prevent content from being stolen. Rather, it's to enable content to be sold. There's a big difference, especially for the "long-tail" content publishers that OTN was built for.

Selling video via RSS: Cool. Overcharging: Not.

Big publishers will continue to sell content through major stores like iTunes. OTN, by contrast, allows publishers to self-publish content that, if fairly priced, might make a few bucks. Hodgetts told me, "I think it's really egregious that people would not be willing to pay a few pennies a minute for content." Television content, he said, monetizes at roughly a penny a minute per viewer, taking advertising and cable subscription revenues into account. He thinks that's about the right price for long-tail content like obscure hobby videos.

That resonates with me. By Hodgetts' metric, the sample site he showed me, Wonderful World of Flying, overcharges by about a factor of 30 for its airplane porn. Thirteen cents for a 13-minute video tribute of the Stearman biplane makes sense. But at $3.99 I'm skipping it, or going to BitTorrent instead.

OTN's fee is 15 percent for the money it collects. The service starts out new users with a $5.00 credit.

As Hodgetts says, current video technologies have "democratized production, but not distribution." Advertising only pays for a small proportion of online videos. OTN might help everyone else get paid.