Cory Treffiletti asks the correct question: "will online video advertising become a viable business mode, or will it be supplanted by paid access to video content? Will Internet TV have advertising or not?" (I'd link you to that, but it was in an email).

I'm an old television advertising guy accustomed to thinking about shows having commercial breaks imbedded so that money can flow to the content creators, signal distributers, and others. I used to live and breathe that subject so much that I understand everything from which systems transact the ad buys to what business economics motivate media planning and how do stations automate their inventory. So, when pundits say that broadband video will be monetized in other ways (such as subscription fees), it interests me what might actually come about.

I'm in Cory's camp when he says that "throughout the growth of the Web we've seen companies try to implement a paid access model, and these firms never achieve critical mass. ITunes is a slight exception to the rule in that it allows consumers to buy single episodes of programs you can [also] watch online for free." The reason for this is straightforward, combining the video purchase with a video iPod so that you can watch the show offline while mobile is a smart choice for some people.

All that being said, the landscape is littered with pay-for-access models and I don't think that this model will be successful online (with only a few exceptions). I note that a Starz subscription on cable TV is a successful enough venture but it does it did not catch on fire online through the a RealNetworks subscription. If memory serves me right, that monthly cost was only $9.95.

I must stipulate something here: no one likes advertisements - on television or otherwise. And truth be told, I go out of my way to skip them all. So, I have to chuckle when a study from Forrester notes that 82% of consumers say that ads within video are annoying, 75% say they ignore the ads, and only 10% of those consumers say they sometimes interact with video ads. Why isn't that percentage at 100?!?

The bottom line is this: consumers want access to their favorite programs both on television and online. No one will pay for access to something they can watch for free elsewhere. Let's say that you are a junkie of NBC's Heroes. Would you pay to watch it online, or record it on your DVR and zap through the ads? My bet is the latter. So, if you are going to watch Heroes online, I think that you might accept an ad (maybe two?).