Selling Ice to an Eskimo

I use this famous saying because it seems like Funny Or Die has actually done it. They've taken the fungible internet video, which sits in an incredibly saturated market, and somehow commercialized it to fund an entire business. Before Mike came in I never really understood Funny Or Die; I thought it was a hobby that Will Ferrell maintained just because he enjoyed humor. I didn't think there was much capital involved, nor did I think a profit could have been turned from it. If this scenario were the case, there is not anything necessarily wrong with it. But I have always been nervous about the future of entertainment because, as an industry I want to get into, it seems like the consumer has more and more control and can easily get away without paying for a video or song, etc. Making money in this industry is frankly important to me, so to learn that Funny Or Die can turn a profit even without the consumer purchasing a product is an amazing revelation. The videos are essentially funny advertisements, and companies will always pay to advertise their product, especially when the product can be seen by hundreds of thousands of people. The consumer still gets their product for free, the producer still makes a profit, and companies can advertise and reach myriad people.

I am afraid, however, that this method of production cannot work (by "work" I mean to turn a profit) within other contexts of the entertainment industry. It seems to only work for short videos because these are easily consumed by people the same way we consume commercials. Even with Digital Video Recording and online access to shows, research proves that TV viewership has not dwindled. This suggests that people still watch commercials, and with events like the Super Bowl where the commercials are the reason for a good chunk of the country tuning in, it seems like short, internet videos that essentially advertise products can exist for the consumer. But when it comes to television shows and feature film, much longer products that have much higher overhead, producers will find it nearly impossible to be successful on advertising alone. Consumers can still easily consume these things without paying for them directly, and will likely get upset with too much product placement. In the future of consumer control, how will the industry survive?