Video-on-demand Killer App

Video-on-demand is a giant success that continues to grow.

But what about video-on-demand ads, commercials? Who wants to request a commercial? Who, for instance, wants to spend 30 seconds watching a Honda Civic cruising on a country road? Almost no one, of course.

In general, the only people who might want to watch an ad about a Honda Civic are people who are on the verge of buying a Civic or a similar car.

The economic ideal, then, is to let people request video ads about the products they want to buy, and then pay those imminent buyers to view those ads.

This is an economic ideal because such payments not only give prospects a financial incentive to view an ad, the payments also severely penalize advertisers for showing ads about uncompetitive products that waste viewers' time. In other words, the payments to prospects enforce relevancy, increasing the probability that an ad will be useful to the prospect.

The amount paid to a prospect for viewing a single video ad can range from tens of cents to tens of dollars, depending on the value of the product or service involved. Honda might pay small car buyers $25.00 EV to view an ad about a Civic, while Colgate Palmolive might pay toothpaste buyers $.25 EV to view an ad about Total toothpaste.