Overlay.TV: Video Overlays Meet Product Placement

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Launching today is Overlay.TV, a new startup that lets you over text, photos, and pretty much anything on videos from many of the top video sharing sites, and even match them up with products and monetize them that way. Based in Ottawa, Canada, the startup closed a $4.5 million round of Series A funding last month.

The way that Overlay.TV works is that users drag a bookmarklet to their toolbar (or manually enter the URL of the video), and press it on the video that they want to create the overlay on. You can then sign in with your Overlay account (or alternatively, Facebook account — adding it as an application), and the video is imported into the Overlay interface. Now, you can create “Targets” (and even moving ones) of an item, product, or even friend on Overlay.

When users add a product target, the area becomes clickable and redirects you to the information/purchase page on any of their 600 partners — including Amazon, iTunes, American Apparel, and almost any online place to buy that you can think of. Upon a purchase, a commission is gained and shared by the submitter and Overlay. In the same way that product placement in real-life movies work, Overlay carries that concept into online video and for the first time gives a statistical way to track effectiveness, something that has been never possible before. Unlike forced product placement, however, Overlay gives users the option to turn off the overlays too, which is great thinking on their part and will do nothing other than drive more use of the technology.

If you’re wondering about use, let me tell you there are a lot of them. Aside from the monetization and product placement aspect, video overlays have a number of uses, many of which are yet to be explored due to the concept being never technically possible before. While a lot of videos currently on Overlay are for comedic, fun, and goofy purposes, I think the technology will be a lot of use to a lot of fields and current perpetrators of online video. For example, in a lecture video, important points can be denoted and referenced further. Another example is sponsorship with web-based shows: instead of having an interstital, the sponsor can be embedded right into the video and made into a clickthrough.

I have to admit, however, that at this stage, the technology is fairly unproven and new. Like any other concept in its early stages, the only words that could be used to describe it are “cool” and “neat.” That said, I think Overlay’s execution is superb, so there isn’t to say how long it will take when the product bypasses that stage, and the community kicks in to drive its use. Embedded below is a video from Overlay.


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