Web Video Cannot Succeed Until TV-Style Advertising Revenue Arrives | Money Is Key

1 min read

Money is key. It’s a shame that is the case but true nevertheless. And this adage is having a direct influence on the online video sector – from why YouTube is constantly engaged in battle with copyright holders to why Hulu no longer supports Boxee.

Money Is Everything?

It’s a sad fact of life that money is of the utmost importance in almost everything we do. Being in relationships, having kids, and enjoying life are all directly influenced by money. And of course, jobs and the art of business thrive or otherwise on how much money is generated.

Almost every decision taken can be influenced by money, how much you have, how much you want, how much it’ll cost, how much it’ll make. Television is no exception. Whether a show gets canceled or recommissioned comes down to how many people are watching, and consequently, how much revenue it is drawing in.

Online Video Revenue

Therefore, it stands to reason that online video, particularly that supplied by traditional media and television companies is also dependent on the same market forces. Unfortunately, so far at least, online video is failing to pay its way.

YouTube has found it hard to monetize its content, partly due to a dearth of video advertising opportunities, and partly because monetizing user-generated content is a sticking point. This has led to battles with record labels and the PRS over revenue share, with the former arguing the money just isn’t there to share in the first place.

Hulu and Boxee Battling

Even more profound than that is the still-raging battle between Hulu and Boxee. Boxee allows its users to view online video on their televisions in an user-friendly, optimized-for-television format. Hulu was one of the services streamed through Boxee until Hulu decided to cut support last month. Since then, the two companies have been playing a cat and mouse game.

The reasons for Hulu’s move to curtail Boxee are as yet unconfirmed. But NBC Universal CEO Jeff Zucker summed up the problem in his Digital Hollywood keynote speech last week.

Jeff Zucker Speaks

He said


“What we’ve lost in viewers and advertising dollars on the analog side isn’t being made up for at all on the digital side. We want to find an economic model that makes sense.”

Clearly Hulu is a (so far) unprofitable venture that the networks are willing to experiment with. After all, they really don’t have much to lose assuming people who are now watching on their computers wouldn’t have watched on their televisions otherwise.

But Boxee obviously throws a spanner in the works on that score, enabling viewers to watch Hulu programming on their televisions as easily as they would watch content directly from NBC. Which clearly isn’t pleasing bosses at NBC at a time when online revenues aren’t a patch on traditional television revenues.


Until advertising revenues on Web video and television start to match or come close to those experienced on traditional television, I find it hard to see how online video will succeed. If money is the all-important factor, which it currently seems to be, then media companies are going to protect their most important revenue streams. And those aren’t online.