An occupational hazard of following the online video space as closely as I do is that it's rare when I see a technology that feels truly breakthrough. So when it happens, it's not only an "aha!" moment, but also a tangible reminder of how much running room the online video industry still has ahead of it. These were my reactions when SundaySky's CTO and founder, Yaniv Axen, showed me a private demo of the company's "DynamicVideo" platform and explained its model to me.

In a nutshell, DynamicVideo integrates with a web site's database or content management system, and then upon a user's request, it creates short videos out of specified pieces of web site content, completely on the fly. Yaniv explained that DynamicVideo does for building on-the-fly videos what ASP or JSP does for creating dynamic web pages. All of the generated videos are completely customized based on the specific pieces of site content being assembled.

The process of implementing DynamicVideo starts with an upfront creative step in which SundaySky works with the site's team to create "Videolet" templates. This step includes generating all the creative elements (graphics, voiceovers, music, etc.) that would conceivably be needed in any of the videos to be created, along with the shell templates for the videos. When a user request a video, what's happening is that the required content is pulled from the site's database/CMS, matched against the corresponding creative elements and assembled into the correct shell template. All of this happens instantaneously and the video begins playing as quickly as you'd expect a web page to load. SundaySky also provides full analytics so it's easy to test and optimize different pieces of the video.

All of that may feel a bit abstract for some of you. Yaniv showed me several different mock implementations (though the company isn't ready to show any publicly, Yaniv did supply this example of an Israeli ecommerce site, which really just scratches the surface). One of the mockups was for Expedia. Imagine clicking on a suggested hotel and instead of (or in addition to) scanning the page for the hotel's number of stars, proximity to attractions, pictures, reviews, rates and contact info, a 1+ minute video instead presented it all to you. I believe the video brings the hotel to life far better than even the best-designed page can.

The mockups showed a broad range of potential applications: MyYahoo (personalized video summary of recent updates), CNET (product comparisons), YellowPages search results (vendor profile information), MySpace (social media presentation) and NBA.com (6 degrees of separation game). Basically, any content that can be extracted from a database/CMS becomes fodder for a video, tailored to the site's particular goals.

What's most compelling to me about SundaySky are the financial implications for content providers. Implementing DynamicVideo allows site owners to generate not just a ton of new and highly targetable videos and but also a ton of associated ad inventory (the idea of a "this video brought to you by" brand slate is a natural). Site owners can also deliver a totally new consumer experience that helps them meet users' increasing expectations for video. This can only help drive higher engagement and desired actions.

And last but not least, by providing a low-cost and automated "manufacturing" process for creating an unlimited number of videos, SundaySky completely changes the video business case, thereby enabling more sites to profitably embrace the online video medium. As I wrote recently in "Inside Demand Media's Content Factory," sites that learn how to crank out large volumes of high-quality video will have real competitive advantages in the broadband era.

On the heels of an $8M first round it raised in January, SundaySky is just starting to share more details. Yaniv alluded to a couple of big media deals coming soon. But, for competitive reasons, it's still keeping things very close to the vest. If its platform scales as well as the demos suggest, this is going to be a very interesting company to watch.

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