According to a new study by Points North Group 62% of consumers would prefer free VOD (Video on Demand) with Ads, rather than pay $1.99 per episode Ad-free.

“Video downloads for $1.99 will have limited appeal. Consumers will grow tired of having their credit cards charged $1.99 every time they download a rerun of CSI,” said Craig Leddy, a Points North Group analyst.

Maybe, but I think the answer is “It Depends!”.

Leddy also added that “In time, consumers will see a mix of free, ad-supported, pay-on-demand and subscription options.”

Subscription models are also becoming evident, so for say $30/month you would have access to unlimited downloads from a library of content.
Or how about you get free access, as long as you fill in surveys about what you watch?
Or the price you pay could depend on how soon you want to watch it after initial release? Example here
Or to really stretch your thinking, how about VOD versions where product placements in each version are served up to match your behavioural dimensions?

I believe there is room for multiple business models to exist for Video on Demand, and . But however these models develop, advertising will need to adapt to the unique properties of Portable Media devices and enhance rather than impeed the viewing experience.