Does anybody watch online video?

The answer is yes, and the percentage of people who watch online video is continually increasing, especially as more households are gaining broadband access. The graph below from emarketer and the U.S. Census Bureau shows the growing numbers and the correlation between broadband access and watching online video.

Well, who really cares if people are watching online video if you can't make money off it? Many companies have found ways to make a substantial amount of money through a sponsorship model.

Specifically, Revision 3, a company that produces online shows, has nearly perfected the model by delivering advertisers engaged audiences that are otherwise difficult to target. One of Revision 3's programs, Diggnation, which is "entertainment aimed directly at gadget-loving, commercial-skipping 18- to 34-year-old males who spend more time on the Web than in front of a TV" (CNN Money). Diggnation draws about 250,000 viewers a week and is among the most popular free video podcasts on Apple's iTunes service.

The picture below shows the two hosts of Diggnation, as well as the sponsorship model they use, which has been effective for Revision 3.


Since programming is very inexpensive to produce with a single camera, business can create shows that target niche audiences instead of the general public, which increase the value of the advertising.

With online video's ability to target such specific demographics, does it have the ability to oust TV programming? Not yet, but it can certainly supplement the expensive network advertising.