"The matter is under investigation, and all photos and video footage will be reviewed by the university," he said.
"When students are found to be in serious breach of the student code of conduct, they do face exclusion. This is a distinct possibility for ... students involved in organising these types of activities.
"These types of sadistic and potentially harmful flat initiations are not part of the tradition at the University of Otago, and flat initiations such as this have only started to become noticeable in the past few years."
University staff had been working with residential colleges and the Otago University Students' Association to reduce the prevalence of such initiation events.
"This potentially harmful behaviour as shown in the footage involving large quantities of alcohol is behaviour that is rejected by this university in the strongest possible terms," he said.
"The university is determined to stamp out this behaviour and to educate students, as inevitably, they will regret partaking in these events.
"We have to question the values of a minority group of our students and how they have come to think this is OK."
The university had not referred the matter to police, and a police spokeswoman said it had not received any other complaints about the footage or the party.