The conventional thinking around monetizing video is through advertising. But paid subscription and pay-per-view will be viable, according to Saul Berman, who heads the global media and entertainment strategy practice for IBM. He is based in Los Angeles.
He told me that as much as half of U.S. consumers over 45 years of age are willing to subscribe to video rather than "participate" in advertising. (This is proprietary research data not previously released.)
What they are willing to pay for is hard to say, but it is going to happen. He says that subscriptions can be bundled with premiums — much the way that inexpensive song downloads are bundled with premium items such as ring tones.
If the subscription model works for online music, why not for online video?
Saul is a co-author of "The End of Advertising as We Know It," an exhaustive white paper at the revolution taking place in advertising and content monetization. The study was published in November and is free. Here his his adaptation of the study for Adweek.
Ad Networks Will Grow Dramatically
Another trend will be the rise of advertising networks. Saul says that they will take 20-30 percent of the advertising dollars within three years.
I met him at the AlwaysOn Conference in Manhattan where he was a speaker.
This clip is definitely one to watch. You can grab the video file here.
For a round-up of the conference, check out this post by VentureBeat’s Julie Ruvolo.
– Andy Plesser