There has been a lot of attention on how video sites will generate revenues this week, with three articles talking with or about most of the usual suspects. Looks like there is money being made, but the preroll is on the way out . . .
The WSJ had an article about video websites looking for new ways to generate revenue:
Are Skins, Bugs or Tickers The Holy Grail of Web Advertising?
Video Web sites have spent the past year searching for the Holy Grail of online advertising: ads that don’t annoy consumers and still fetch high prices from advertisers.
Now some believe they’re beginning to figure out what works and are starting to cash in. Sites ranging from Google Inc. to Break.com have been experimenting intensively with replacements for the preroll, the video ads that users are forced to watch before viewing a clip.
On the same day, MediaPost ran an article about Heavy.com using skins to generate revenue: targeting Heavy’s core demographic of young men and specializing initially in “skins”–a branded ad format that wraps around a site’s video player, and arguably interferes less with a consumer’s viewing experience than pre-roll advertising.
Advertisers include Coors, Nissan, Panasonic, Diesel, Axe, Sony and Nike. CPM Rates for the skins are between $10 and $20. The skins wrap any video player–YouTube, Revver or Google, just to name three–with a branded ad.
VideoEgg must find it tough to monetize their content - BusinessWeek reported that the 25-year-old chief executive of online video service announced his company will sell ads for any outside developer creating interactive, shareable programs—known as widgets—for Facebook.
Ads are shown on “canvas” pages—the Web page that loads when a user is installing a new application on their personal page. Some early ads include movie ads that play trailers of films such as Beowulf and The Bourne Ultimatum when a user mouses over a video screen embedded in the ad. Facebook does not allow third parties to place ads on users’ personal pages. VideoEgg shares the advertising revenue, giving 60% to the developers.
Video sites are scambling to uncover new revenue streams before the VC tide ebbs - if not by surrounding their content (and anybody else’s content they can get access to) with ads, how will they stay afloat? Are we heading toward a consolidation and shakeout, or will we continue to have dozens of video sites?
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