Scoble lays out the issues with making money for online video solely through advertising:

Here’s the trouble. Most people I know are getting advertising revenues of between $10 and $40 CPM. That means that for every 1,000 people who visit a Web site, an advertiser is paying somewhere around $10 usually (often less, and in some cases, far less — Jeremy Wright told me he was only getting about $.50 CPM when he runs Google’s ad bar).

Now, that sounds great, particularly if you can get a big audience and when you write a blog that has minimum creation costs (yeah, some posts take hours, but others can be done in minutes and you don’t need anything but a computer to do this). That low cost of production is why Jason Calacanis was able to create $25 million in value by lashing together 100 bloggers. But, let’s look deeper at video.

First, the videos I’m putting up are around 200MB a piece. The bandwidth distributors I know are charging $.14 or more PER GIGABYTE to distribute those videos. So, that comes to $28, or more for 1,000 downloads (if my math is right).

That's going to be a problem, I think. It's just going to be very hard to get arbitrary video segments paid for - sponsorship works, but does have strings (implicit or otherwise). For those of us using podcasts and screencasts strictly for promotional purposes, this isn't really an issue - it's just part of the overall marketing budget. For others, it's currently a challenge.

Technorati Tags: advertising, video