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Friday, December 02, 2005

Wherefore Video Ads?

The Wall Street Journal has a piece today about how piracy is likely up because the ratio of iTunes purchases to iPods is going down. This supposes that more people are stealing music, although it could be that the audience is expanding beyond music maniacs to people who are less passionate about buying music.

The article also says more people are likely to be watching downloaded TV shows on their iPods. Anheuser-Busch is shifting more of its ad budget from TV to online, and adding two and two together tells me that there is ample ad money to support increasing consumer demand for watching video content online or through mobile devices.

Now is the time for media companies to cash in by including ads within video streams. When online music piracy first exploded, illegally swapping songs was basically the only way to easily download a track to a hard drive or handheld. While there is still lots of piracy, legimate music downloads are doing quite well.

Video is different in that it is "free" as part of your cable bill, so the ad-supported model works better. Media properties such as CNN and Comedy Central have been much more aggressive in making segments available online, but inexplicably sans ads. We know that the 18 to 34-year-old male audience is what makes advertisers salivate, so who are the primary people downloading The Daily Show?

TiVo is going after this market with its TV to iPod solution, but downloading will always be easier for transferring content. Also, if ads are streamed online, people can't skip them. Google has its video search up and running, but the content is sparse and ad-free (for now).

By John Gartner at 03:46 PM | Comments (0)

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