A marriage between Silicon Valley and Hollywood talent led to the birth last month of a video start-up Funny or Die. What took YouTube to do in six months, Funny or Die did in six days.

Its traffic exploded after the release of its first 2-minute clip, The Landlord, starring Will Ferrell. The video drew almost 24 million views. This would be in YouTube’s top three of all time.

Last year, I wrote (“Forget the Long Tail!”) that it wouldn’t be the Long Tail that wins out in the video space, but big studio and middle market talent. The operative word is “talent.” As I argued a year ago, there are only so many stupid human tricks people can watch and the future of online video isn’t clips of TV shows or movies. Funny or Die highlights what happens when talented writers and actors combine to produce videos for the online environment. Audiences will flock to their content and sites versus the vast majority of long tail plays on YouTube.

What else does this mean for online video over the next few years?

The market will become divided into fiefdoms. YouTube already won the first battle, but the war will rage on as users move to video communities based on genre, such as Funny or Die, or affinity groups. If I’m into soccer and just wanted to see soccer videos, why would I go to YouTube if there were a site that was rich in soccer videos? Hmm… if I was CEO of a second-tier online video site, I would find a genre(s) to focus on, aggregate content from outside and homegrown sources, and hopefully create a fanatical following.

Video search becomes critical. Assuming a few years from now the world will not be dominated by YouTube and video fiefdoms dot the landscape, the importance of video search becomes critical. Lightweight video search engines that return results based on text metadata associated with the video won’t do. Robust engines that conduct advanced visual analysis are critical in this next stage of online video.

Moving to mobile. 2-minute clips online are great predecessors for quality content packaged for the mobile environment. When next-generation mobile networks, known as “ 3G” and “4G” are deployed and reach their critical mass, user behavior and demands will be ideal for the longer quality short-form videos. I could see clips of soap operas or dramas 5 minutes or longer, but who knows?

It’s going to be fun watching how all of this plays out. Maybe Will Ferrell will conquer the mobile space too?

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