Amateur video sites like YouTube, which alone has 40 Million video views per day, are ripe for pre-roll advertising, yet none of them seem to be doing it. The industry is begging for more pre-roll ad inventory and it seems that the ones who have the most are not playing in the game. I guess advertising takes all of the appeal out of watching motorcycle wrecks and bad karaoke.
I had a conversation last week with Chad Hurley, one of the founders of YouTube, and he out right stated that he doesn't think that pre-roll will ever be used by their site. When asked what their direction is, I couldn't get a straight answer. He focused on the secret method used to serve their videos which releived them of the standard bandwidth fees that plague the video site business model. He claims that they don't have to do pre-roll to make a profit, while their competitors will be forced to. They have taken the stance of, "get the audience first and monetize later." This approach appears to be working.
On a competitive note, MetaCafe just announced 5 Second pre-roll ads as an additional way to monetize the video on their site. This will blend in nicely with all of the other ads blinking all over the place. MetaCafe must know that ads in front will turn away eyeballs and that is what the battle is all about right now.
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