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Because they're using Flash to deliver the video, people won't need to download any players to watch the video. The company has also done extensive work on the backend, delivering video to people depending on their connection to the Internet, which minimizes buffering.
Eventually they want to allow in-video advertising of the content as well - so if you were watching a movie or show about a warm tropical island with white sand beaches and crystal clear water... Where was I? Oh, yeah, so you're watching a movie or show about somewhere you really want to go, you might see ads for that location in the video player, or they might have a way to allow you to plan your trip in the video player. Forbes has more details on those future plans, and the struggle now to find content for their network.
Monetization of online video is something that a lot of companies are struggling with right now. I think that the Adobe Media Player plans similar advertising features as Ooyala. NBC has recently started their own online video site, trying to extract some of the value that they think they left on the table with their old iTunes deal. I'm undecided as to whether any one company will really own the solution here - I think technology is enabling content providers to create their own solutions so easily, that its likely this market will remain fragmented for the foreseeable future. I don't see a Google behemoth coming for online video - instead I see a number of smaller and independent solutions from a number of companies.
Ryan Stewart had the original scoop on this one, and has more information on his fantastic blog.
