The Web is Branded Entertainment
Aside from a tiny number of paid or subscription services it seems to me that the vast majority of the web is ad-supported in one way or another. There has been plenty of discussion, pro and con (here’s a good example), as to whether or not this model can support the growth in web video but we’re definitely gonna find out.
Beet.tv has a good interview with Fred Seibert, the creative director of NextNewNetworks about the current role of product placement in web video. Fred’s a pretty smart guy and worth a listen.
There does seem to be a role for sponsored programming on the web but not at anywhere close to the budgets most producers have grown accustomed to. The truth is that nothing on the web consistently draws the number of viewers that currently watch TV and without focused consumption by a broad range of consumers advertisers are not going to pour their money all into one or two efforts.
This means smaller budgets for creators and producers in-line with their audience size.