Is Video on demand ever to make a profit.

The subject is discussed over at Paidcontent and their conclusions are not good.

The success of the BBC-I player,Itv.com and Channel 4 on demand show that there is a market out there.The problem is as with most things on the web people aren't willing to pay for them.

It notes the conclusions of Brand republic which said that

The dilemma facing VoD service providers is that the market is too nascent to yet be treated as a significant revenue stream in its own right.

And cites the relative failure of Channel 5 which

Last week officially rolled out Demand Five, which offers a mixture of free and paid-for shows. The broadcaster's head of strategy Kieran Clifton says the service has achieved early growth, but he expects it will take some time to gather real momentum.

and according to its head of strategy is at the moment

losing money and, effectively, the more popular it is, the more money we lose, whatever we do with advertising,' VoD is a small fraction of our audience right now and we do it because we have to give viewers what they want. It also -allows us to learn about what people want to watch and when, and what they will put up with in advertising.'

But there is an upside for recent research shows that people who download Vod are more likely to watch advertising associated with it.Media agency Starcom

identifies key areas, such as pre- and mid-roll spots, as well as sponsorship, overlays and display formats, which could work well on the platform

.