IPod Seeks Advertising Revenues

Clear Channel will use portable players, like the iPod and Sony (NYSE: SNE) PSP, to promote shows on its 1,200 radio stations. For example, Clear Channel's Premier Radio Networks plans to air 60-second video clips from the "Rush Limbaugh Show" starting Dec. 12.

Disney plans to offer trailers from its upcoming fantasy film "The Chronicles of Narnia," for starters. Disney previously hooked up with Apple in October to offer its current and past season episodes of ABC and Disney Channel television shows for download at the iTunes Music Store.

The Rise of Portable Video Ads

Who saw the rise of portable video ads coming? Perhaps Apple CEO Steve Jobs did. On October 31, Apple announced that its iTunes Music Store customers had purchased and downloaded more than 1 million videos since they debuted the service on Oct. 12.

"Selling one million videos in less than 20 days strongly suggests there is a market for legal video downloads," Jobs said as part of the announcement. "Our next challenge is to broaden our content offerings, so that customers can enjoy watching more videos on their computers and new iPods."

One has to wonder if those broadened content offerings include advertising support all along. With popular show like "Desperate Housewives" and "Lost" streaming over the iPod, it appears to be a strategic opportunity.

A Strategic Opportunity

Indeed, spending on online video advertising is expected to triple in the next two years alone, according to research firm eMarketer, rising to about US$640 million. The firm predicts it could hit $1.5 billion by 2010, which would once again put Apple in the right place at the right time.

But some analysts are not impressed with the notion of commercials over the iPod. Inside Digital Media Senior Analyst Phil Leigh told MacNewsWorld that it's an incremental step, but a very cautious step, in view of what TiVo (Nasdaq: TIVO) announced last week.

"TiVo's new TiVoToGo feature will allow TiVo subscribers to transfer recorded television programming to their Apple iPod or PSP devices," Leigh said. "That means instead of just having having 'Desperate Housewives' and 'Lost' available, anything you can record on your Tivo you can switch over to your iPod video."

One-Upsmanship

The network -- called In2TV -- will allow consumers to stream full-length episodes from favorite series such as "Welcome Back Kotter," "Sisters," "Beetlejuice," "Lois & Clark," "La Femme Nikita" and "Growing Pains" free and on-demand on the Web.

"Warner Bros. is going to do is put these old shows on the Internet for free, but run two minutes of commercials per 30 minutes episode so there will be advertising revenue," Leigh said. "That, to me, is a significant step in digital media."