Highly targetted ads + user opt-in to the ads they want to see = Great idea!

This is a great idea as it seems a very democratic way for people do decide what they want to watch. It targets certain people and could also be ussed as a monitor for companies about what it is people want.
I have a few questions though. Who decides the number of "credit points"each ad generates. Is that determined by the number of people who want to watch it, by the size of the company or any other factor?
Is this an idea for tv companies (certain ads tie in with certain type of tv) or retail comapnies?
If ads are shown worldwide, what about certain sensitive areas where certain images can be seen as offensive?
This targets people and particular locations, but as people choose their own ads, does not that limite the reach of the ads? How are the "floaters"being reached?

Great questions Caroline! Let me try to answer them.

Q: Who decides the number of "credit points"each ad generates. Is that determined by the number of people who want to watch it, by the size of the company or any other factor?

We envision it as a system whereby a standard commercial is worth a standard amount of credits. If a company wants to target a particular group of people, they might allow their commercial to be worth more credit to those people. The idea is that the credit value is a function of the amount of money paid by a company in order to fund the broadcast of the television shows. A company might also be able to say that they only want to spend X dollars, and so only a certain number of people can use their commercial to "buy" video. This is an area where statisticians and programmers will be able to work to optimize advertising sales and revenue.

Q: Is this an idea for tv companies (certain ads tie in with certain type of tv) or retail comapnies?

This idea could work for any company who wants to use video advertising (tv commercials) and for any company who produces or distributes video content (tv or movies). In essence, the advertiser pays for the production and distribution of the video content.

Q: If ads are shown worldwide, what about certain sensitive areas where certain images can be seen as offensive?

Current Internet technology makes it possible to not allow people from certain parts of the world to view certain web content. This could be a way to control who has access to what ads and/or video.

The viewer has absolute control over what commercials he or she views, and so can specifically choose ads they don't find offensive. Further, it offers companies an opportunity to develop an extremely personal relationship with consumers. Imagine a company like Coca-Cola which likely has thousands and thousands of ads in its library, from the past and from all around the world. A Coke consumer can browse through this library, explore all the different faces the brand has shown through tv advertising, and then make choices about which faces she likes most. Consumers get to choose which aspects of a brand's personality they like most, and experience only those...

Q: This targets people and particular locations, but as people choose their own ads, does not that limit the reach of the ads? How are the "floaters"being reached?

First, there will likely be a good number of people who visit the site but aren't interested in browsing through ads to choose specific ones. These users should still be able to watch video, but will see ads that are chosen randomly or through some sort of paid placement system (like regular tv). Second, people will probably be most interested in watching commercials that are entertaining and that other people like, not only in commercials for products or services that interest them. This means that companies that produce commercials which catch people's attention and that are entertaining will have their advertising seen, regardless of what they are actually selling.

A few items of relevance and note:

The January/February issue of Business 2.0 discusses some new business models in its What's Next section. In particular it outlines a new mobile service called SugarMama:

"The Virgin Mobile service provides 4 million users-mostly teenagers-with up to 75 minutes of free airtime a month if they watch ads and answer questions to prove they paid attention. Since its launch in May, SugarMama has been used more than 2 million times, and it's gaining about 1,000 new users a day..."

The February issue of Wired contains an article about Janus Friis and Niklas Zennstr?m's new project. The creators of Kazaa and Skype have turned their attention to building a system for streaming television. "One of the Leiden crew's top priorities is a backend ad engine that can pinpoint viewers by location, time of day, viewing habits, and opt-in profile information to serve up the perfect ad." The article also provides a list of companies that "are racing to put A-list TV on the Net".

And finally, for those of you who doubt that people will choose to watch commercials, here are three commercials with many willing YouTube viewers:

1) "Ronaldinho: Touch of Gold" >9.3 million viewers
2) "The Sony Bravia Commercial" >3.8 million viewers
3) "dove evolution" >1.9 million viewers

hmm... what about all the commercial free TV shows you can get off the torrents or even youtube? You're gonna have to get all the networks and advertisers lined up before this would take off, to give users savvy users something they can't already get! Even with the big machine between iTunes, a lot of people still download their songs for free...

As I have been seeing and reading more and more about this kind of thing and about the fact that more and more companies are going to spend more money on advertising on the internet as they have previously ignored it, every time I think about this it seems to be a better idea.
A lot of the international big companies like Unilever, Procter & Gamble etc. will be putting more money into internet advertising and this could very much be a vehicle that is very interesting to them as it allows them to very specifically target their audiences.
As sites like digg.com and del.icio.us and other bookmark sites could get involved it would possibly even more enhance the merits as people will talk about their favourite ads etc. and this will enhance the number of people interested even more.

janosan: Being a "savvy" user myself, I know that I could find the content free of charge as well as free of commercials if I wanted it. However, I'm also lazy. If I could watch the TV I wanted, when I wanted, didn't have to wait around and hope that the right people are online and didn't have to be concerned about resolution and quality, I would be happy to endure a few commercials. Especially if I knew they were good commercials.

A system like this could open the door to all sorts of creative ad ideas. Imagine a set of ads that are designed to complement a specific TV episode. Commercials as part of the show itself. Picture-in-picture ads or overlaid product placement. There are opportunities that can be explored with online TV that can't with conventional distribution structures.

The problem is that commercials will become more like content, and you try to make a separation between content and commercials.

You will end up having very popular commercials that, according to the law of supply and demand will not be gaining a lot of advertising money. On the other hand you have a whole bunch of advertisers that can't show their 'crappy' advertisments, which would normally have earned you a lot of money.

I know I'm the devils advocate, but I do think this will kill your idea eventually.

Dude, how doesn't this make money?

The amount of revenue that the site receives will not have as much to do with the commercials as it will how much TV content (or movie or other video) people want to download. The idea is that the site is paid for every downloaded commercial. As long as people have to download ads with their TV, the site will get paid, regardless of which ads are chosen.

I is certain that some commercials will get more viewing than others. As I discussed earlier, there could be ways for advertisers to "encourage" viewers to choose their so-called "crappy" commercials. For example, an advertiser could pay extra fees so that their 1 commercial has a "credit" value of 2 or 3 commercials. This higher value could be limited to specific TV content or target viewers. On the other hand, advertisers don't pay for commericals that aren't viewed (maybe just an admin fee to get it into the system.) This means that there is a low entry barrier for advertisers. The key will be getting good TV content.

I was thinking that advertisers should pay for viewings that aren't spliced into TV content. I haven't mentioned it before because i didn't want to complicate the discussion. However, people will likely watch all sorts of commercials - good and bad - in their search for the perfect ads to enjoy with their TV. Maybe these viewings could contribute to a viewer's ad "credit". Virgin Mobile's SugarMama system works a bit like that (see my posting from January 26).

There is also the other end of the scale, where everyone wants to watch the same commercial(s). Advertisers will have to put limits on their spending. No advertiser will be able to to pay for an unlimited number of views. In fact, an ad that is that popular doesn't need any help being viewed; it will find iteslf on YouTube.

There will always be someone willing to take money to broadcast commercials that no one else wants to see. That's what makes this idea so revolutionary. We TV viewers are given the power to choose.

For those of you who like TV commercials, check out iFilm:

http://www.ifilm.com/superbowl/18373

I'd rather not watch ads at all, so in the case of people like me, I think, like you said, automatic placement of ads like on regular T.V would be good, but, to add onto that thought, I also think that for visitors who have an account on the site, they should be able to set their preferences for what sort of stuff they're interested in and the system will automatically fetch ads relevant to those interests.

I can definitely see how it could work in first world countries, but not in my country, South Africa and I'm sure other countries, yet, due to the high cost of Internet connectivity, which is fine for short movie clips, but not longer T.V. programs and films.

This still leaves you with a huge market and the Internet connectivity around the world will only get better, then extending the market.

After considering everyone's comments and learning more of what's big in online business these days, I propose that this system be set up more as a clearing house than a TV network. The power of this idea is in self-targeting of the advertising. When all the big players are focusing their energy on trying to figure out what ads to feed to people, we will offer PERFECT AD TARGETING.

Miguel, I also completely agree with your first point. Viewers should be able not only to choose specific ads, but to express interests and preferences and provide personal information that allows the system to choose ads for them. Ratings and recommendations could also help direct ads to the right people.

If people have to watch ads to get their video, I would suggest that they would prefer our system over others, because they CAN choose ads, not necessarily because they actually will make those choices. I offer the following anecdote which I read in James Surowiecki's The Wisdom of Crowds:

An experiment was conducted in which two groups of individuals were asked to complete a number of tasks that required concentration. Both groups were placed in a room and were subjected to loud, unpredictable and distracting background noises. One of the rooms had a button which they could push to stop the background noise; the other did not. As you would expect productivity was significantly higher in the group with the button. However, the surprise is that no one in that group actually pushed the button.

I would suggest that simply giving people control over what ads they view will make their viewing experience more enjoyable...

Great for funding the digitisation of minority interest content, real potential to benefit from the "long tail" - local news for the day you were born anyone?

"TV&AdLove gives me the security of knowing what my children are watching. I can choose television shows I believe are appropriate for my kids AND I don?t have to worry about what advertisers are trying to sell them. No candy, no violent games, nothing I do not want them exposed to. I used to watch every commercial and show before putting them in the line-up for my kids. I still do what I can, but now I have a network of friends and fellow mothers to help."

- Jane Doe, fictitious single mother and TV&AdLove user

There are some concerns I have on the idea.

We have Brightcove, Joost, Apple iTV/iStore/Video iPOD, Amazon/Tivo and many others who have invested heavily in the DRM systems, distribution and cost infrastructures to be able to build content deals.

A crowdsourced project would have a lot of difficulties cutting these deals. Either it would need large distribution and a huge userbase (Similar to how BitTorrent evolved into a commercial video network) or strong financial backing to cut content deals.

Without the content deals, how do you get users? Where does the content come from that isn't on one of the other hundreds of video sites (Blip.Tv, YouTube etc.)

That's definitely a significant issue. I have two ideas on this.

First, that identifying and obtaining the right content will be part of the launch strategy. Do we start with niche content, educational, independent?... I'm not sure what the best course of action will be. But i trust that a CH team will have more than enough smarts to get it done.

My second thought on this is that there has to be content out there desperate for someone to buy it. And that there are advertisers who really want to have their commercials viewed. If the site functions a bit like an auction or clearing house, we could put these two things together.

If we can show that it works, why wouldn't other content providers want to sell through us? In the end that's all we're talking about: sell advertising, buy content, deliver to consumer.

To me, this is definitely a Red Ocean market. Something to steer clear of. There's too much competition in this space already, by HUGE players.

I know that this can be done using a novel approach. Does the fact that there are HUGE players in broadcast television stop people from launching new networks? Does the fact that HUGE players dominate marketing & advertising stop people from opening new agencies? No.

Go for it. There's more than one way to skin a cat & the basic concept here - giving users control of viewing - is a good starting point.

As to the point about competition: no one deserves a free monopoly.

It's not a monopoly, Jill, that's my whole point. There's a mountain of very well-funded competitors in this arena already, leveraging very sophisticated technology in many cases. As I said, it's a Red Ocean market.

So, CC, do you think there is no niche left? I'm not arguing with you, but I could use some enlightenment.

Whoever is already doing this is not reaching my demographic. Does that suggest any avenues?

free TV sounds great to me, but honestly I think I'd rataher just pay $2/episode or $20/series like iTunes is proposing (we don't get TV shows yet in Canada :( ). I know using bit torrent I could download for free, but if it takes me longer than 30secs to find what I'm looking for I give up.

I'm concerned that this service will take the user out of her nature posture while watching video. Will users really want to be that active with a video service?

Some form of this idea has potential to make $$$. A key issue to contemplate: What will advertising look like in future when shows are aired online? Then think through a value proposition for networks to participate in a user determined advertising world.

People are willing to watch ads for content and a subset of people will pay $$$ for content (a la ITunes).

I watch NBA hi-lites at NBA.com vs.on TV. I choose hi-lites I want to avoid long tv sports shows. While ads are playing, I open a new browser window and multi-task until my content starts. The ads are no big deal.

Will networks give you rights to air their content and give up control on what ads users see? On NBA.com and ncaasports.com - ads are self branding. NBA.com airs ads pushing their stars and games or ancillary products like Xbox video games, etc. They're smart - ads are short so you aren't annoyed.

Before you grab content on NCAAsports.com - the only ad you watch is a 5 second static page of the CBS logo (CBS has Rights) to sear their brand into your brain . Who won't put up with this while video is buffered onto their PC?

When you grab network content online, the networks can immerse you in their brand.They make money other ways like online ads when you hit their site.

So how do you compete with the big boys? Probably avoid them? Find a niche that can use ad $$$ as you mentioned earlier: educational content maybe tv content from the UK to Canada where their network advertising is not relevant to Canadian market.

Several comments are around user preferences: "I'd watch and an ad or I'd pay for content". Get CH to run the tests to determine how people react to the idea. Once you're armed with data, figure out a business model.

Hope this adds some perspective.