David Deisel writes:
The ad-supported video model is currently underrepresented and carries huge potential. However, in the medium- and long-term, I believe that well see an array of sustainable digital video pricing models emerge. In the same vein as analog television today, we have ad-supported pricing (broadcast), ad-supported plus subscription (basic cable), subscription (premium cable), pay-per-use (pay-per-view and DVD). The same models break out for other media as well, like print (which has free pubs, periodicals, exclusive newsletters, books, respectively) and music (radio, music magazines, CDs, etc.). Whats interesting to note is that the digital video, unlike modern media radio of and analog television, started with pay-per-use, as opposed to an ad-supported model.
As the field matures, well see a mix of pricing which will discriminate among customers tastes for immediacy, location, viewing screen size, and whole number of factors. Ad-supported will likely emerge as the predominant driver of revenue, but the mix among the pricing models will change over time as technology and tastes change evolve.