Online Video: Where’s The Money?

On TechCrunch, Erick Schonfeld analyses the revenues (or lack of them) of online video providers and concludes that, as business model, it is less viable than some suggest.

TV and media companies can make ten times as much by putting a video on TV than they can by putting it on the Web, even if that video attracts the same size audience. Online video startups can look at that as an opportunity to close that gap, but they should also realize that the Web is not the only game in town. In fact, cable companies are striking back by gradually shifting up their video-on-demand channels to a bigger mix of free, advertising-supported video. Cable’s answer to Youtube will be more video-on-demand channels with better videos that advertisers will line up to buy ads for at ten times the price they are willing to pay for ads on YouTube, or Hulu for that matter.