It’s been added by an algorhythm. No kidding.

TV viewing is – besides for coverage of live events -  in slow decline. Sites like YouTube on the other hand is generating thousands of streams daily but very expensive to run.

But videos on YouTube and elsewhere online are very difficult to monetise. Users don’t like their viewing interrupted.

Enter ZunaVision, a technology based on an academic research project. In fact at an artificial intelligence lab at Stanford University by three researchers and an Assistant Professor and funded by Stanford professor David Cheriton.

Techniques to monetise online video have included pre and post roles, overlays and interstitial, but this is different – its overlays yes, but overlays in disguise. Techcrunch explains:

“an algorithm first analyzes the video, subsequently alters different aspects of embedded images or videos (such as the lighting, color and texture), and then attempts to fit the advertising into the physical space of their videos without appearing like a blatant overlay.”

ZunaVision claims on their site

We enable content owners to assign ad-spaces inside the physical space of their videos, ready for advertiser branding.

• Fully self-service, and fast
• No pre- or post-production, no screens
• Dynamic, resellable ad-spaces

The result: natural, uninterrupted viewing; unskippable impressions; and increased monetization for producers and sites.

Here’s another video of ZunaVision doing video inside video. Pretty slick.

Techcrunch is sceptical, calling it pop-ups for video. I don’t think its as annoying as pop-ups. In fact, did not spot the overlays in the first two scenes, probably because I expected something far more intrusive! Oops!

Still, all these Stanford whizkids still need to do is brainwash media buyers that reach ain’t everything.

Demos the influential left think tank has just published a report titled Video Republic. And it makes for interesting reading. In it they use Nerimon, an 18 year old YouTube user with subcribers totaling 30,000 as an example.

Generally positively deposed to user generated video and sites like YouTube, the report includes a quote by Jeff Jarvis, also one of ZuluZulu’s favourite media commentators.

“The revolution won’t be televised, it will be YouTube’ed”

They’re sounding a bit like Forrester Research with their Groundswell book does Demos. Forrester argues that social media is a trend, a groundswell where people turn to each other for things that where previously provided by corporates.

Demos argues that the Video Republic also promises a redistribution of power and has the possibility for a new kind of democracy.

Cecilia Hanon a researcher and lead author of the report made an telling observation in the UK Guardian with regards to the denizens of the Video Republic:

“Youngsters are working out their relationship to the outside world and forging an identity.”

This is of course not limited to YouTube. Sites like MySpace makes showing off and forging an identity easy with functionality that allows complete customisation of your page, blogging, video and audio streaming.

There’s a new easy solution if your looking to run a website that let’s users upload, transcode and play video via the web.

If you have a little coding knowledge you can use the new Panda video service.

This Open source service which runs entirely from Amazon’s Web Services. (Or in the cloud – whooooaaa.)

With YouTube allowing websites to embed their videos on other sites, and now the YouTube API, where users can upload to YouTube via your site, and even redesign the YouTube player, why would this service be useful?

Well, if you want to encode in a different format than Flash or at a higher quality, use a completely different player or if you don’t want pre or post roll adds on them, sold by Google. In short if you want YouTube like functionality but want to have full control.

Of course streaming online video is still expensive. Even when using one of the services ‘in the cloud’ where you usually only pay for the bandwidth you use.

The peril’s of live TV was amply demonstrated when a CNN report outside the collapsed Lehman Brothers Investment bank showed some men horsing around (in a rather racy fashion) in the background.

They are “pretending to console each other” says a quick witted CNN anchor.

Joost the P2P video service by the creators of the P2P Skype and P2P Kazaa that was supposed to save TV, is relaunching a browser version.

Despite superior image quality (due to it’s P2P nature) Joost never got off the ground.

One reason – Joost was not readily accessible through the browser like YouTube and Hulu is. It meant that bloggers could not embed their videos on their sites or link to video’s in emails or Facebook wall posts and Google could not index them.

In short, Joost could not take advantage of the web’s user marketing effect (where users market content for you by sharing), even if it could take advantage of users bandwidth through P2P.

The browser feature still requires a download, to facilitate the P2P action. If Joost does become successful, it will face another problem I blogged about more than a year ago. The jealous Internet Service Providers (ISP’s) will not like Joost’s usage of their customers bandwidth.

The purported influence of the internet and digital has been said to be threatening the media landscape with enormous change for some time. But could it be that major shifts are now actually taking place?!

A few news items that recently caught my eye. The Lostremote blog reports an increase in the consumption of news online, a good thing, because The Media Guardian reports that not even the interest created by the stunning success of the British Olympic team in Beijing could prevent all the British quality dailies registering a year-on-year fall in circulation for August.

But theirs trouble on the advertising front. According to Techcrunch the decline in newspaper ad revenue is accelerating. Yes, and even their ad revenue online is decreasing.

In TV the situation is as dire. The Media Guardian reports that although event shows and soaps are holding up, the traditional UK TV peak time has been decimated.

But it is the layer beneath the top tier where ratings have collapsed and hit the average peak time share, defined as between 5.30pm and 11pm, of the main channels over the past five years. BBC1’s share of evening viewing has fallen from 27% in 2003 to 23.1% in 2008 to date. On ITV1 the decline is more marked – from 28.4% to 21.8% over five years. Among 16-to 34-year-olds it is steeper still. BBC1 fell from 23.9% to 17.1% and ITV1 from 23.6% to 15.6%.

This comes hot in heels of news of media entities that are making money.

Applications can make money. Some of those apps on Facebook are making money. (Yes, even the inane ones.) And so are some of the useful apps on the iPhone making decent returns in sales.

And there has been other more predictable news: Search based text advertising is making even more money. The advertising spend has not disappeared. It has moved.

The result? Google is not just withstanding the advertising downturn. Google’s search based revenues are still growing according to the Wall Street Journal. Even when other forms of online advertising (like those on newspaper sites mentioned above) declines.

Spending on Internet advertising is climbing at a healthy clip — rising 20% in the U.S. in the second quarter — and growth forecasts are strong despite the weak economy. But that growth isn’t being enjoyed by everyone.

It’s internet display advertising in particular that has taken a massive hit.

The gap is widening between spending on simple search ads, Google Inc.’s core turf, and spending on flashier display ads, which companies such as Yahoo Inc. and Microsoft Corp. had hoped to use to gain ground on Google.

Faced with a slowing economy, advertisers are sticking to what they view as the safest way to reach online customers directly: the plain text…

Another item of note. In line with the failure of online display ad revenue is the news of the failure of online video ad revenue. Even Google is not making much money from YouTube yet.

And Rhythm New Media (disclosure – I used to work for Rhythm), the groundbreaking start up that placed dynamically targeted ads around a number of UK operator’s mobile videos, has announced it’s pulling out of the UK. It’s worth noting that Rhythm has recently released a very succesful iPhone application in the US.

What to make of all this?

If your an advertiser – It’s been the case for some time that if advertisers wanted to reach young people, they could not really do so through TV. This trend is accelerating. This demographic is to be found online. Expect this trend to spread to older demographics sooner rather than later.

If your a brand owner one has to wonder how and where your going to advertise to build your brand. With TV audiences dwindeling and online growing the answer should be – on the net. But successful brand advertising is measured in reach (the amount of people who saw and add) and frequency (the amount of times they saw the add).

With online display advertising the former is hard. Users are often spread over thousands of websites, not a few TV channels. The later, how many times users have seen an add, can be even harder to achieve or measure. Unlike TV advertising which interupts and dominates TV viewing, web display ads rarely do. Have people really noticed your ads?

Perhaps it’s time to sponsor those large live events?

If your a creative type there’s reason to be worried. Particularly during this recession and particularly if your working in video. You might want to take a cource on search engine marketing and Google Adwords, but job satisfaction is unlikely to come with Google Adwords.

If your a new media agency specialising in flashy display ads, its time to consider moving into building apps or perhaps social media.

If your a newspaper or magazine or TV channel one has to wonder how one could arrest the steady fall of readership or viewers. How does one compete with the wealth, quality and immediacy of online content? How does one compete with the volume, quality and low cost of user generated content?

(Jeff Jarvis does make some suggestions as to how newsrooms will have to adapt.)

At least newspapers and magazines have a more clearly defined and more niche identity: A more rounded brand that can be leveraged online. TV stations do not. TV is supposed to be a mass medium. A prediction – TV stations are dying dinosaurs and will only survive to bring us mass live events.