The fill-in-the-blank headline of 2007: [Insert Technology Company] powers [Insert Content Owner] video syndication

Today, I learned Microsoft and the AP combined forces to syndicate videos to local stations. Not surprisingly, the AP offers content and a newspaper/broadcaster network while Microsoft offers the technology. In the video portion of the post, Jim Kathman spoke to Beet.TV explaining the AP was concerned about the technology and went to Microsoft to reduce their concerns. But in regards to monetizing, Kathman said:

If [the local properties] were able to drive traffic to their site, how do they monetize it? We’ve taken care of that by partnering with MSN; and MSN does a great job selling national brand advertising

Yesterday I learned Borrell Associates had released a report that explained:

The local video advertising market is still small – just $161 million in 2006, growing to $371 million this year . . . In five years, local online video advertising will surpass $5 billion, representing more than one-third of all local online advertising

Local properties of all kinds, blogs, newspapers, broadcast, etc have advertising value because of their niche

As the video technology and hosting technology becomes more commoditized, technology solutions must appeal to the increasingly segmented world. New Media companies must have solutions that appeal to the rapid segmentation of content markets.

To capitalize on a $5 billion local video advertising market, New Media companies must develop solutions that enable niche advertisers to better target niche segments

MSN has created a system which shares national brand revenues with the AP, MSN & the local newspaper/broadcaster. But, how do niche properties insert local or targeted advertising into their online video content? As the local online video advertising market grows, is this partnership really the best way to monetize traffic? Shouldn’t the focus be on local/niche advertisers?