On Thursday KoldCast TV founder David Samuels announced, via an email to its content producers, that the site would be shut down.

The email from Sumuels cited what is a continuing trend in the serialized web video industry, “the costs of operation continue to outpace advertising revenue. Moreover, costs associated with audience development, in relation to industry CPM rates, make it impossible to expand our audience without losing money.”

Using back of the envelope calculations, videos require tens of thousands of views to be supported by advertising alone, and those calculations don’t include the significant cost associated with acquiring those views through audience development.

The announcement goes on to state that the company had failed to break even in all but one quarter in the history of its business. In the process KoldCast has lost millions of dollars that Samuels describes as being “self financed.”

Unfortunately the closing of KoldCast and the purchase of Blip.tv by Maker Studios are two recent examples of the current state of the web video business. For now ad supported content is simply not a viable business for content producers with any overhead, or without a pre-established audience.