I totally think that offering up your shows as pay for AND ad based is the way to go.
Personally, I wouldn't use it a ton. Only for the reason that I like to watch TV on my TV. I want to be immersed in the TV experience, not just watch it on my little 17 inch screen.
So I probably would be more likely to download the occasional episode for the cost of having to watch a few ads.
Here is an article from Ad Age talking about ABC's plan to launch shows on their website for free with ads. Personally I would love this except I dont watch to much on ABC but I think this is the way to go. I will watch the ads and this actually makes perfect sense to me.
The article for anyone who wants it is down below:
NEW YORK (AdAge.com) ?- Walt Disney Co. is expanding the availability of its hit shows via ABC.com as part of its plans to create the "network of the future." CEO Bob Iger detailed the soon-to-launch product called My ABC, which will provide consumers with the opportunity to download shows free of charge.
Bear Stearns conference_?Mike Shaw [ABC's president ad sales and marketing] announced today we are going to take a product to market in May," Mr. Iger said at the Bear Stearns media conference in Florida this week. "Viewers will have the ability to access shows such as 'Lost,' 'Desperate Housewives' and 'Grey?s Anatomy' on ABC.com. They will be ad supported, free to the consumer.?
Ads that accompany the video offering would not necessarily be the same as those that appeared during the show's broadcast, he said.
Mr. Iger said Disney wanted to try a variety of business models for its product, whether subscription or advertising supported. ABC shows are also offered via Apple iTunes and iPod platforms for $1.99 a pop. Those shows come without ad involvement.
'New direct commerce opportunities'_Mr. Iger said Disney was looking to create a number of revenue models but because the company did not wish to turn its back on the ad community, it would create new opportunities for them.
?There is so much greater consumption of media, the opportunity for advertisers are greater; look at what Google has managed to do,? Mr. Iger said. ?Our job is to create the new networks and new direct commerce opportunities.?
So far greater availability of ABC's shows via Apple?s iTunes does not appear to have dented the shows' ratings, something advertisers had feared might happen if consumers could find them elsewhere at anytime. For the week of Feb. 20, ?Grey?s Anatomy? ranked No. 6 in the Nielsen Media Research ratings, watched by 24.7 million households, just behind coverage of the Winter Olympics Feb. 23.
Gary Carr, senior VP-director of national broadcast at TargetCast TCM, New York, said: ?The one thing advertisers are worried about is whether people are watching the commercials and are they watching the shows??
Not yet selling new platform_He said ABC not yet started selling the new platform, but noted that CBS, which has a deal to offer its hit shows via Comcast?s video-on-demand platform, does so with the advertising that runs on the linear network intact.
?Its good that they?re all trying different things. They?re testing a lot of models that can generate additional revenues,? he concluded.
NBC also offers many of its network shows on the iTunes platform -- "The Office" is one of the top performers -- while Fox is offering two network shows, "Prison Break" and "24," through satellite sibling DirecTV's VOD system for 99 cents.