By adding advertising on its video site, Google has started offering, for free, videos that viewers would otherwise have to pay to view, reports the New York Times. Google is testing the approach on premium videos from only a few video providers, with some five participating advertisers, according to industry analyst Greg Sterling. Advertisers include Netflix, Pepsi and LowerMyBills.com. Sterling muses: "This starts to turn Google into something like an on-demand TV network with traditional, TV-style ads. How will Google navigate these waters with traditional TV content producers?"

The online advertising takes the form of a banner above the video, with a graphic image and a link to the advertisers' site (see screenshot); viewers can also choose to watch a 15-30-second video ad from the advertiser after the video plays. Google said it intends to eventually run ad auctions, with advertisers bidding to have their ads displayed on each video, and it would split ad revenue with the video owners.

"By placing these user-initiated ads at the end of the videos…we are able to offer select premium content free of charge to all users," CNET quotes Google as saying. "This is currently a limited test only, with a small number of advertisers and publishers (video content providers) participating. User-generated video content will continue to be free of charge and ad-free."