Will Buy.coms Video Comments Change E-Commerce?

News Analysis: Buy.com is trying to merge two Web staples-user reviews and homemade videos-in an effort to boost sales, but will consumers buy it?

Think of it as a marriage between Amazons consumer review comments and YouTubes homemade videos. But will anyone turn little movies into big money?

Buy.com is trying to merge two of the Webs most powerful sales tools—consumer-written reviews and homemade videos—into a sales tool that will both tap a younger demographic and theoretically add more credibility to heretofore anonymous content.

From one perspective, neither of these Web capabilities is especially new. Consumer-written reviews were part of the original launch of Amazon.com and have been a prominent part of many e-commerce sites for years and multimedia has been a core of the Web ever since graphical browsers were launched a dozen years ago.

But both features have taken on a life of their own in the last two years, with consumer-driven content pushing such sites as NetFlix to replace professional reviews with consumer reviews, a trend that is likely to continue, according to a recent Jupiter Research report. (Click here to listen to a recent discussion with Jupiter and other analysts about this trend.)

Even small businesses—especially restaurants—are starting to feel the consumer-review pinch, according to this story in the San Francisco Chronicle.

Video sites such as YouTube, MySpace and Google Video have soared in popularity in the last 18 months or so, even impacting political campaigns with people shooting speech and interview excerpts immediately.

/zimages/6/28571.gifGoogle Video gets a decidedly thumbs down rating from the critics. Click here to read more.

This brings us to the core question behind Buy.coms move: Can these two trends be combined and will it work to boost sales?

Analysts watching the e-commerce sector pretty much agree that the combination has tremendous potential, but that this is merely a small experiment and that much has to improve before it has the potential for having a true impact on e-commerce sales. (Click here to listen to an audiocast panel discussion about Buy.coms video efforts.)

The approach faces some roadblocks. For one thing, a relatively small number of people will likely take the time to record and transmit a video review (which is a lot more troublesome than typing out a few sentences of comments), and the essential review-and-approval today must be done manually (which, if the technique becomes popular, could quickly translate into a huge labor and cost challenge).

"This is a really interesting approach. I saw some of the [initial] videos on Buy.com and they have the potential to be really quite effective," said Forrester Research analyst Sucharita Mulpuru, who added, "the ones I saw were mediocre, but I could certainly see some clever person creating a mini-commercial that ends up being entertainment unto itself."

Mulpuru stressed that, when viewed in the context of a very early work in progress, this effort is intriguing. "I think this Buy.com rendition is definitely version one of a process that will take many years and better technology to perfect," she said. "Its a germ of a great idea, but as with many interesting concepts, it may be a bit ahead of its time."

Another problem is supporting the vast amount of disk space and bandwidth consumed by an infinite number of videos being posted by consumers. "Another concern that I would have for retailers is: Would they have the bandwidth—either from an IT or human resources standpoint—to manage this?" Mulpuru asked. "Most retailers can barely manage written customer reviews. This could be pushing things a bit beyond the scope of their capabilities."

/zimages/6/28571.gifWith online video booming, media giants such as Lucasfilms Industrial Light and Magic are wrestling with storage requirements. Click here to read more.

Michael J. Liard, a director with ABI Research, said the ability to see the product review was a major advance in Web reviews: "I think providing a three-dimensional view of a product is compelling in and of itself."

That value is undeniable, to the extent that most reviews leverage the power of video. If a reviewer sits next to the product and talks about it, its not providing any great value beyond typing a text review. But if the reviewer thinks that the product spins too fast or is wobbly or difficult to clean, the video can demonstrate those issues in such a way that viewers can decide for themselves whether that spinning or wobbling is too much for their tastes.

Next Page: The wild, wild video Web.