Millions are being spent to bring television to the Web. Aside from countless video-sharing startups promoting user-generated content and copyrighted works by major studios, there's also the phenomenon of content made by studios specifically for the Web. FunnyorDie.com is one such site, and Will Ferrell's video short of a drunken two-year-old landlord demanding her rent has been viewed 30 million times. It's hilarious.

But there's a serious question here: How will these sites make money, especially the kind of money needed to entice VCs or even the investment of a major studio talent? According to The New York Times, Ferrell isn't getting paid for his shorts on the Web site, but Sequoia Capital is spending millions to build out the tech infrastructure it takes to serve up high-traffic video content. Ferrell and other comedians on the site are using the platform as a way to push their comedy into the mainstream. For them, the Web serves as a kind of movie trailer.

From an advertising standpoint, the 30 million viewers is attractive, but Procter & Gamble Co. or other big advertisers may have qualms about advertising next to a toddler wanting to "get her drunk on." The site's third most popular short is a comedian riffing on masturbation, which even an edgy beer advertiser might think twice about. Creative freedom reigns on the Web, but advertisers may not want to support it with big dollars. There is also a lack of efficiency when it comes to making media placements. With hundreds and eventually millions of channels on the Web, it's hard to reach millions with one or two well-placed advertisements. Either the online channels need to create a network for advertisers to place ads across many channels in one fell swoop, or advertisers need to figure out a way to bring efficiency to their media placement strategies. In the meantime, it's great to be able to find so much content on the VCs' tab.—Stacey Higginbotham

See June 1 story from The Deal
See May 31 story from the New York Times