There’s just one problem — it won’t happen anytime soon. According to consulting firm PwC’s annual media report, online video will increase from $2.3 billion in 2012 to $5.9 billion by 2017. The figure represents 9 percent of future online ad spending, but this is still a small amount compared to TV ads — which PwC predicts will pull in $81.6 billion, or 37 percent of all ad dollars in 2017 (the figure includes ads “around broadcasters TV content” so adjust accordingly.)

This slow growth forecast jibes with the assessment of industry experts who spoke at a VideoNuze ad event last week in New York City. Their explanation was simple enough — brands already feel their budgets are spread thin by TV and they’re not in a mood to experiment.

“If you followed viewers across all screens, we’d have to add at least 70 percent to the budget … our clients say ‘we don’t have have any more money and everything’s more expensive,’” said Michael Bologna, Director of Emerging Communications at GroupM.

Bologna and Digitas’ SVP of Media, Adam Schlachter, both said that media companies’ recent “NewFronts” in New York (a boozy, glitzy preview of new shows intended to resemble the Upfronts in LA), had at best “sparked a conversation” but did not lead to any resolutions to turn on the cash spigots.

The main problem, for now, appears to be a lack of consensus on how to measure the effectiveness of online video ads. Here’s how PwC puts it:

There are [..] challenges facing audience-measurement researchers seeking to provide more accurate data for their clients: …Until progress is made on these, migration of advertising revenues from traditional TV to online video platforms will lag consumer adoption of these new services.

The ongoing status quo (whatever its cause) appeared to frustrate at least one audience member at the VideoNuze event, who demanded that someone explain why TV stations charged more even as they bring brand messages to fewer people.

“We don’t want to pay the failure tax any more. It should be more like the stock market [where value declines with performance]. The agency must say, if your audience goes down, you get less.”

The panel host, Forrester’s Jim Nail, suggested a culture of risk aversion may explain the status quo: “Nobody gets fired for buying ABC, NBC, CBS and Fox.”

The figure was supplied by Videology, a provider of ad tools to agencies and marketers, and comes with a nifty graphic (via VideoNuze) that shows a snapshot of the industry. Highlights include a growing range of sectors that are buying video ads and increased use of behavioral data to target ads.

The other significant part of the report is that the vast majority of video ads ares still served on the desktop:

Videology said in an email that the mobile’s share of overall video ads  grew one percent in the previous quarter and that the overall growth in video means mobile is expanding rapidly. Unlike Google, Videology continues to consider tablets like the iPad as a mobile, not desktop, device for ad purposes.

The third category — “Connected TV” — refers to pre-roll video ads served on devices like Roku, Apple TV and Xbox. The 3 percent figure is up from 1 percent the quarter before.

These numbers shouldn’t be treated as gospel, of coure, as Videology has a stake in the video ad industry. But the company’s broad connections to marketers, publishers and agencies do give it a good big-picture view.

Going forward, it will be interesting to watch how quickly the above desktop-to-video ratio changes to reflect a world in which half of all internet viewing is expected to take place on mobile devices. At the same time, publishers will be watching closely to see if video ads can hold their high value as more inventory comes on the market.

(Image by cybrain via Shutterstock)

Aereo is a service that lets people watch live TV anywhere they go by renting them a personal antenna that beams shows to their phones, laptops or tablets. The service, which can be bought for $1 a day, is getting lots of attention because big broadcasters are suing try to sue it out of it existence.

Speaking in New York on Wednesday, Aereo CEO Chet Kanojia explained that the service is only possible because of a “perfect storm” of technology advances that have dramatically lowered the costs of broadcasting and subscriber acquisition.

For example, Kanojia pointed to Aereo’s “antenna farm” in Brooklyn. The site hosts thousands of mini-antennas, each about the size of a dime, that subscribers in New York can rent on a daily or monthly basis. The technology, which offers a combined TV/DVR service, is so compact that Aereo can fit 50,000 pairs of antennas in just 200 vertical square feet.

This is remarkable but perhaps more remarkable are the plunging data and transcoding costs that meant Aereo could build the site in the first place. Kanojia says the company is buying “tens of petabytes of storage” for as low as $95 a terabyte, and that the price is dropping all the time. What this means is that when (and if) Aereo clears the legal hurdles, it can scale nearly instantly in cities and towns outside New York.

“The cost structure based on the cloud is a fraction of what it was,” he said, adding that companies like Aereo can plan businesses “on the anticipation of these cost curves being driven down.”

Kanojia credits massive R&D by the giants of the tech industry with not only lowering the costs of cloud computing but also changing consumer expectations about media and TV subscriptions. He says these changes have made it possible to offer $1/day subscriptions where consumers can come and go as they wish.

“There’s no installers, no boxes, no lost equipment … they can come in and give it a try for $1.”

While Kanojia is a Steve Jobs fan, he doesn’t think the late Apple founder’s “give them one price” philosophy works for subscription services which, he says, work better with a blitz of options.

In the bigger picture, the Aereo founder says that “TV should be like Twitter” — available everywhere and backed in every application.

None of this will please the big broadcast networks whose content Aereo is rebroadcasting without permission. But Aereo-style technology now seems to be an inevitable part of the future — going back makes about as much sense as going from lightbulbs to candles.

Kanojia spoke at VideoSchmooze, an annual gathering of video insiders hosted by Will Richmond of VideoNuze.