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According to Time Warner (TWX) president Jeff Bewkes, every cable provider should be distributing free video-on-demand of all TV networks to its customers.

Talking at the opening general session of the CTAM Summit, Bewkes added that the combination of VOD and targeted advertising would reduce the use and need of DVRs, as viewers would want to see what was being marketed to them.
 
“If you worry about if this is a bunch of B.S., it’s there. HBO is that now. You don’t have to DVR HBO. We should take the whole industry and put it on that basis,” said Bewkes, whose company owns HBO.

Like the rest of online video providers, Bewkes acknowledges as far as online video goes, the challenge that must be overcome is what type of advertising model to use. That will probably take about four years to figure out. The experimentation is under way, but increased content and different attempts will take time to sort through and figure out.

I think it will not be only one model, but potentially a series of models built upon interests and demographics.

For instance, middle-aged females don't mind being marketed to in exchange for playing free casual games online. There will be all sorts of models that will probably emerge that people will prefer over others similar to that.

Most consumers are starting to understand they're not going to get quality online video without it being monetized in some way. That means it will include advertising of some sort. Now it's only a matter of discovering the various ways people want to be marketed to.

As Bewkes says about VOD, it will eventually come down to a lot of targeting and tracking being put in place which will not only make it more palatable for viewers, but more interesting and desired as well.

With on-demand advertising in relationship to television, I know I would be more than willing to watch commercials related to my interests in exchange for consuming my shows or movies when I want.

Like it or not, this is where it's all going to end up anyway. Consumers simply demand it with their lives which are no longer lived linearly.