Video is an accepted part of online marketing, but there’s one area it has not yet penetrated: E-mail newsletters.

Not yet, anyway. But IMN Inc., an e-mail service vendor, is working on a system that will soon allow marketers to present near-DVD quality videos in their e-zines.

Call them video newsletters or video-enabled newsletters, but they could be seen as early as this summer.

“It’s more than a beta,” says David Fish, CEO of Newton, MA-based IMN. “We’ve developed a prototype, and the next step will be a live trial with one of our clients.”

How will it work?

As Fish sees it, recipients will get “a polite advance download of video content before the newsletter is actually sent.” The material will be cached until the subscriber receives the newsletter and clicks through to the video. “We compress it a little bit for bandwidth efficiency,” he says.

In addition, “we will download a small piece of proprietary software to handle the video, and the acknowledgement of when the video is there,” Fish continues.

Fish estimates that the cost per thousand range from $100 to $1,000, or “a buck at the high end and ten cents at the low end.”

Who might spring for such a service? One candidate might a college alumni newsletter.

“Let’s say a major donor to your football team gives $1,000 a year,” Fish says. “You could send them half a dozen game highlights, something they would find very intriguing to open up and take a look at.”

Another might be a fitness club that offers virtual memberships.

“I can easily see someone paying $150 for an online membership, and getting newsletters with videos from their personal trainer,” Fish adds.

In a business-to-business setting, the customer can be sent a “fairly personalized message from a regional sales manager.”

Some firms might support the video costs with advertising—for example, an auto dealer might sell advertising to the manufacturer.

“The market rate for advertising is in the $30 to $40 per thousand range,” Fish says. “That can take care of a third to a half of the cost.” There’s no question that online video is booming, thanks to an increase in the number of broadband households. And ad spending on is shifting as a result. Companies spent $120 million last year on online video ads, and the growth rate is 68%, according to Fish.

To the best of his knowledge, though, videos have not been sent via newsletters. The closest thing would be video magazines, but those require “a different layout, and a different set of metrics,” he argues. “We’re saying, ‘Let’s put the video inside the newsletter. There will be one layout, and one set of audience measurements.”

Fish concedes that IMN is still working through “a fairly complex” set of technical issues relating to the advance downloads.

For example, what happens of a person is online long enough to receive only three out of six video clips? “We would have to modify the newsletter on the fly to make you aware that you’ve gotten these three,” Fish said. “Or, we could defer sending the newsletter until the video gets there. It’s not an inherent limit of the technology, it’s a policy choice: Is there a cutoff time?”

But he expects these questions will be answered, and that newsletter videos will boom as bandwidth grows and costs go down. And while it might be too early to discuss best practices in this area, Fish does offer some pointers.

One is to keep them short. “We think relevant use is on the order of five to ten minutes worth of video, broken into one-minute clips,” he says.

Another is to make sure that you have a good integrated reporting system so that you can see what’s working and what isn’t.

Videos are easy enough to shoot, as shown by firms that already use them on the Web.

“One of our customers, a fitness club, shoots fairly complex exercise movements,” Fish says. “In that setting, the production could be fairly low-cost: A digital video camera and a Macintosh will get you what you need. At the high end, people are recycling TV spots online.”

Of course, videos may become even more common when Really Simple Syndication (the delivery right to the screen of content chosen by the consumer) takes off. “When you combine video feeds with RSS, it then becomes more like Internet television,” Fish says.

Video is an accepted part of online marketing, but there