By Michal Lev-Ram
July 18, 2012

FORTUNE — Millions of people watch funny cat videos on YouTube, but the experience mostly consists of sitting back and hitting play, pause or stop. Now a small company called Flixmaster is trying to make the online viewing experience more interactive. How? By providing easy-to-use tools that let publishers and consumers embed more hands-on features into videos.

Boulder, Colorado-based Flixmaster announced the public launch of its online video platform at Fortune‘s Brainstorm Tech conference in Aspen earlier this week. The startup’s CEO and co-founder, Erika Trautman, says its technology can be used by anyone, from fifth graders to cable companies. The editing software developed by the firm is web-based, with a drag-and-drop interface that lets users recreate videos by plugging in video segments and more interactive scenes.

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“Video isn’t interactive,” Trautman told the audience at Brainstorm during a brief demonstration of Flixmaster’s editing tools. “Flixmaster makes videos participatory, immersive and deeply interactive.”

According to Trautman, most viewers quit watching an online video about 45 seconds after they click on the play button. NBCUniversal’s USA Network tapped Flixmaster to create an interactive online series for its site. The show, called Sights Unseen: A Covert Affairs Prequel, launched earlier this month. It lets viewers choose what the characters do at key moments in the plot, and then watch the scenes they select (sort of like the video version of the once-popular “Choose Your Own Adventure” book series). Flixmaster says  viewing time for the show was up 400% as a result of the embedded interactive features.

Companies like NBCUniversal (CMCSA) will pay to use Flixmaster’s software, but the company is also offering a “freemium” version that lets consumers create their own interactive videos.

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Flixmaster was one of several startups that gave on-stage demos at this week’s Brainstorm Tech conference. Others included Narrative Science, Bina Technologies,, Axonify, Story Coach and Sift.

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