Is TV's History Instructive for Today's Web Video Producers?
In the 1950s, before the introduction of advertising breaks in TV, the single-sponsor model was the predominant means of funding a television program. Revenue from a show was limited to what a single sponsor would pay, which included the cost of production and a moderate profit.
But this model intrinsically limited TV’s upside, Ad Age’s Michael Learmonth says, as one advertiser didn’t bring in huge profits, and there were not many advertisers willing to pay for a single show. Another limiting factor is that over time, advertisers would exert more control over their show’s content.
However, once the commercial break was introduced, single-sponsor shows nearly disappeared from TV. By 1960, the networks started hosting upfronts, where advertisers would bid against each other for scarce spots in upcoming shows, and ratings soared. Learmonth claims that Web video is now moving in that direction -- especially as long-form video consumption increases, along with long form ad loads.