• by kyle , Daisy Whitney , April 17, 2006

Consumers would rather watch ads in video-on-demand content than pay $1.99 or 99 cents for an ad-free show, according to a recent study. When asked what they would rather do if they missed a favorite show, 62 percent of consumers polled said they would rather get it free on-demand with commercials, compared to 17 percent who would pay for an ad-free version, according to a study by Points North Group and Horowitz Associates.

"Over time, the $1.99 model will wear thin as consumers get tired of having their credit cards pinged every time they download a replay of 'CSI' that they could've gotten for free," says Craig Leddy, senior analyst at Points North Group.

The research firm also found that 47 percent of 18- to 34-year-olds are willing to pay $1.99 for episodes before they air. Downloading a pre-air show "adds to the 'cool' factor," Leddy says.