We’re deep in Wizard of Oz country this week bringing you APCOtv. For those who don’t know APCO represents emergency service first responders. Men and women who deal with the most harrowing situations day in and day out and we had several heart rendering stories to report on.

Also in America this week came a glimpse of the financial realities behind on-line video and the media industry in general. Whilst you tube is a testament to the phenomenal interest in on-line video we’ve yet to see the emergence of a sustainable economic model.

So when AoL/Time Warner released their latest results it gave us all a good opportunity to see how things are working out. It’s particularly interesting because that media giant has fingers in so many pies. And a rather clear – if slightly counter intuitive picture is emerging.

Contrary to public perception this isn’t a migration in income terms from traditional television to on-line video. Traditional television income still dwarfs on-line video and is holding up pretty well. And in absolute terms there’s no doubt that the big increases in advertising linked to on-line video have yet to emerge.

What is clear though is the dramatic fall in print revenues. Year on year declines in revenue of 10% or more are not unheard of. So media owners have  a big hole to fill and are struggling to do so. Strategy after strategy looks to on-line video display advertising to fill the gap and that just isn’t materialising.

So what’s the way forward? As far as on-line goes it’s simply a question of engagement. All the figures show that whilst people love watching video over the internet they’re not engaged by it. And given the smaller numbers compared to terrestrial television that means a lack of advertising revenue.

I think the good folks at APCO might give us a clue here. Waiting for the Wizard to deliver big revenues is just not going to happen. What we need to do is to make our programmes relevant and engaging to the people we serve. And if we do this the revenues to support it won’t be far away.

So what’s caught my eye this week here at WebsEdge? Well it’s interesting. The headlines are full of news of the iPlayer and the iPhone. And as regular readers will know I’m a great fan of both devices.

But what’s really grabbed my attention is the work that’s being done to help communities engage using on-line video. More often than not it’s actually practical applications that are making a difference. Let me give you some examples.

We’re currently working on an initiative with Norfolk, Virginia to let job applicants get more of a feel for both the city and the job specification through the use of on-line video. Straightforward enough you might think. But it’s actually making a real difference to their recruitment. They’re finding it much easier to get people to relocate after watching the video.

Another is the work we’re doing with the International City Managers Association based in Washington DC. We’re helping them run a simple competition where young people can upload their own videos and have people vote on them. Again, nothing too complicated but it facilitates two way communications and lets people feel a part of things.

And I think this is the way things will develop. There’s a great demand for top quality content delivered on-line – be in Doctor Who or CNN’s Doctor Dr. Sanjay Gupta. Literally millions of people a month are consuming television in this way. And running alongside that you’ll see lots of different communities coming together in a very 21st century way through the growth of on-line video.