Web Video All The Rage, But Profitability Nowhere in Sight

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Web video outfits blip.tv and Next New Networks get respectful treatment from the Wall Street Journal today, which argues that “a rising tide of marketer interest in Web video is lifting all sorts of Internet boats.”  The logic: Advertisers want to be on web video, but they don’t want to be on YouTube-style amateur stuff and there isn’t any inventory left on traditional TV networks’ sites. So advertisers are heading to the blip.tvs of the world, which offer TV-like programming with some quality control. GoDaddy.com, for instance, has signed on to sponsor blip’s “Geek Entertainment TV” .

But we’re still concerned that there won’t be enough viewers, and enough ad dollars, to support niche video networks. Video ads are growing fast, but from a very small base, and even the WSJ piece notes that audiences for the Web TV shows are “tiny.” Meanwhile video hosters like blip still have to pay producers, bandwidth, ad sales costs, etc., with the bandwidth and royalty fees generally being far more onerous than those involved in text aggregation.  Can the video business work?  We’ll take a detailed look at the economics next week.

Related: blip.tv “Best Video Site.” Now About Those Profits…

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