If you would like to learn why future video commercials will be shorter, this video is for you.In our new research report, Future Developments in Video Advertising, we predict that video programming will migrate away from Cable TV and onto the Internet. Furthermore, we conclude that the great majority of consumers will expect to watch videos for free in ad-supported formats as opposed to paying a fee for rental or purchase of copyrighted content. Thus, it is crucial that future video ads be more effective than previously. One way to improve the consumer experience, and thereby amplify demand for video programs, is to reduce the time allocated to commercials. For example, at Hulu.com viewers can watch TV shows from ABC, NBC, Fox, and some Cable Channels for free in an ad-supported environment. Typically an hour long TV show can be viewed in 48 minutes because Hulu.com cuts back on commercial time. In our analysis there are three reasons that Internet video can economically justify a reduction in time dedicated to commercials. First, there is no need to set-aside advertising slots for a local TV affiliate. Typically this amounts to a “savings” of six minutes per hour. Second, unlike DVR owners, viewers of Internet video cannot fast-forward through ad-rolls from websites that transport them as streams. As a result a higher percentage of consumers actually end-up watching them because the ads cannot be easily avoided. Third, the Internet enables new types of ads that do not disrupt the underlying video program. One example is the clickable overlay, which often appears along the lower border of the video for 10 – 15 seconds inviting the consumer to click-through for more information, or to even execute a transaction. Given the IP addressing and other techniques inherent in the Internet, advertisers are better able to target such ads than on CATV systems. Less