120 Marketing Trends found for Media / Convergence

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TV Shows Bring Their Ads Online

Cable-TV shows, including TBS's "My Boys," are coming to the Web -- along with a full complement of ads. The shows will be part of a new Web-TV trial that begins this month, spearheaded by cable operator Comcast Corp. It involves more than a half-dozen other media companies, including CBS Corp. and Time Warner Inc. The idea is to put more TV shows online, but only for paying cable subscribers.

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The effort aims to address one of the biggest concerns facing producers of cable programming: how to keep viewers from canceling their subscriptions to watch free TV online.

It is also part of a broader push by media companies to put more advertisements in Web videos, seeking to capitalize on a medium where viewers can´t skip ads. That push comes as the companies´ rush to the Web has outpaced the revenue that online video generates.

Web versions of some TV shows in the trial, including TNT´s "The Closer," will carry their full load of ads from traditional TV. That´s more than four times the ad load on many Internet sites. Many hourlong shows are available to watch online with a single 30-second spot in each of five or six commercial breaks.

"We spend billions of dollars buying and making these programs. And if we give this stuff to consumers for free with limited ads, it´ll go away," says Andy Heller, vice chairman of Time Warner´s Turner Broadcasting.

In the past year, companies including General Electric Co.´s NBC Universal, CBS and the CW broadcast network -- owned by CBS and Time Warner -- have in some cases increased the ads on TV shows on their own sites to two per commercial break. Walt Disney Co.´s ABC argues that viewers and advertisers will accept broader increases.

"I think it´s inevitable," says Vivi Zigler, president of NBC Universal Digital Entertainment, which has streamed episodes of series including "The Office" with two ads per break. "It has to get there to sustain what it costs to make premium shows."

TV networks are wary of spooking advertisers, which often pay higher rates per viewer for Web-video ads, in part because their messages aren´t lumped in with so many others. But demand could push advertisers to accept more ads per video. Research firm eMarketer projects Web-video ads will generate $1.5 billion in ad revenue in 2010, a 42% increase from this year.

"It´s beneficial for me for my ad to be in as low-clutter an environment as possible," says Sharon Gallacher, managing director of global brands at Neo@Ogilvy, a digital ad-buying arm of WPP Group´s Ogilvy & Mather. "But I would also like this medium to flourish," she says, conceding that the number of ads will likely increase. "It´s in my interest to make sure that balance is hit."

Viewers could rebel against the proliferation of ads. "That´s certainly a hurdle, getting people to watch online as many ads as they watch on air," says Quincy Smith, chief executive of CBS Interactive. He says the goal is "ultimately that the online version of ´CSI´ would more closely mirror the on-air version."

Hulu, which makes free TV shows available online, runs no more than one ad per break, and isn´t looking to increase the number for now, says Jean-Paul Colaco, senior vice president of advertising at the Web site, a joint venture of Disney, NBC Universal and News Corp. News Corp. also owns The Wall Street Journal.

Mr. Colaco says Hulu´s focus is on increasing the effectiveness of ads and the amount of revenue they produce, rather than increasing their number.But he wouldn´t rule out increases in the future.

ABC, meanwhile, is armed with research it says shows that the number of ads in Web videos could double without turning off viewers or reducing the ads´ effectiveness. "We´d like to get to the point where the economics of online video are at parity with what we get on broadcast," says Albert Cheng, executive vice president of digital media at Disney-ABC Television Group. "One way is increasing the ad load."

TV executives say that Web videos wouldn´t necessarily need as many ads as traditional TV to produce the same revenue. Web ads fetch higher rates, in part because they can be more interactive and more easily targeted. In addition, people who watch traditional TV on digital video recorders skip an average of more than half the commercials, cutting into network revenues.

Some networks in the Comcast test are using the same ads they use on TV, so that Web viewing can eventually be included in the ratings the networks use to sell time to advertisers. Nielsen says it plans to count Web viewing of TV shows in its ratings, as long as the Webcasts are the same as those that appear on TV.

"If you give the consumer the opportunity to watch near real time without the full ad load, you run the risk of cannibalizing revenue," Time Warner´s Mr. Heller says. "We´re still in the business of asking people to watch commercials."

[Estimated timeframe:Q3 2009-onward]

All data sources are attributed with links to the original insight. The insight is then summarised and, where appropriate, enhanced with additional information.

Source: WSJ.com
MTT insight URL: http://marketingtrendtracker.com/article.aspx?id=4511

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