Would Carl Icahn would be buy­ing up all the Stream­ing Video if it were a com­pa­ny?  178 mil­lion Amer­i­cans watched 33 bil­lion online con­tent videos in Feb­ru­ary, while the num­ber of video ad views reached 9.9 bil­lion, accord­ing to Com­Score Video Metrix.

The race is on between paid and free TV…wait what year is this?

How­ev­er while the ad views are explod­ing the adver­tis­ing rev­enue per view is drop­ping.  Then why have US media com­pa­nies start­ed to look to online video for future profits?

It’s called sub­scrip­tion video on demand.

Net­flix and Ama­zon have recent­ly pur­chased the rights to stream top shows includ­ing the CBS hit The Good Wife and The Killing.

Accord­ing to San­ford C. Bern­stein SVOD has become a $1.5 bil­lion dol­lar busi­ness for the six largest media com­pa­nies and is expect­ed to con­tin­ue grow­ing to $4 bil­lion per year over the next few years.  SVOD rev­enues rep­re­sent 1% of aggre­gate rev­enue and, due to its gross mar­gins of 85%, 5% of those same com­pa­nies aggre­gate oper­at­ing income.

EMar­keter esti­mates adver­tis­ing spend­ing on online video in 2013 will exceed $4 bil­lion dol­lars, up 41% from 2012.

Will adver­tis­ing or sub­scrip­tions become the winner?

Its cable pay TV meets net­work TV all over again.

Bog­ging down online video is an over­sup­ply of inven­to­ry, up over 60% in the last year, accord­ing to Com­score, which has caused prices to drop between 10% and 15%, esti­mates Brightroll, a video ad com­pa­ny but total dol­lars spent is still more than 3 times SVOD.

New online video entrants have not been deterred. Conde Nast announced Tues­day the launch of dig­i­tal video chan­nels for GQ and Glam­our and even the Weath­er Chan­nel is expand­ing their video offer­ings with enter­tain­ment pro­gram­ming to be pre­sent­ed at this year’s video “upfront”

Jeff Zuck­er, at the time NBC’s pro­gram­ming head, coined the term turn­ing TV dol­lars into dig­i­tal dimes when dis­cussing the move­ment of TV ad dol­lars to online video.

Accord­ing to the Wall Street Jour­nal stream­ing has not caused rat­ings or TV view­er­ship declines which may be attrib­uted to the addi­tion of view­ing plat­forms such as mobile and tablets.

But some pro­gram­mers are not tak­ing any chances and are play­ing both sides.  CBS today announced the launch of its iPhone app (Android ver­sion to be immi­nent). The Good Wife, sold to Ama­zon for its, Prime stream­ing ser­vice will also be avail­able for free to iPhone view­ers.  In addi­tion to The Good Wife, CBS will also offer prime time shows includ­ing “NCIS,”, “CSI,” “How I Met Your Moth­er,” “The Young and the Rest­less,” “The Late Show with David Let­ter­man” and oth­ers, all sup­port­ed by adver­tis­ing. Day­time and late-night pro­gram­ming will become avail­able with­in 24 hours after its ini­tial air­ing. Prime­time shows will go live on the eighth day after broadcast.