At work, our biz dev guy forwarded around this highly interesting article about the future of paid video content on the Net: The Ala Carting of Video on the Net – Will it lead to disaster?
He commented that this had relevance for games — something about which I agree completely. I strongly suggest reading the full article, but here’s a brief sampling (which I gather is quoting a report from Bernstein Research):
On the web, early evidence suggests that consumers will tune out – click away – if they are forced to watch more than 30 seconds or so of advertising up front, and maybe another 90 seconds of advertising over the next thirty minutes. Hulu.com, for example, which has already been lionized by many as the future of TV, serves two minutes of advertising for every 22 minutes of programming(i.e. the programming duration of a typical half hour show from television). Assuming identical CPMs for web video and TV, and after accounting for lost affiliate fees, a 30 minute program on the web with two minutes of advertising yields approximately 1/8th as much revenue per viewer.
Are content producers prepared to reduce production costs…by 88%?
