Update: my simple methods of modeling might overstate the number of ads by as many as 4-10 commercial spots, depending on what percentage of the ads are typically local rather than national spots, and what percentage is allocated to network promos. The local ad load (even if the ads are for national brands) would likely not be included. I'm not sure what they will do with network promos.
We recently learned that the television networks' plans with all The Talk of Nielsen competitors and convergence measurements were based on a pretty simple philosophy: for the first 3 days videos of shows are available online they will carry exactly the same national commercial loads as on television. The networks want to be able to charge for them online as well as offline.
So what is currently five or six spots when you're watching Heroes on NBC.com or Hulu would balloon to around thirty-two thirty second spots if things go according to the plan. That's more than five times the commercials you currently have to endure online.
According to Jack Wakshlag who heads up research for Turner (TBS, TNT, Cartoon Network, Adult Swim, TruTV, etc) and has participated both with the CIMM initiative and is part of the group discussing Nielsen's "TV Everywhere" convergence measurement plans, the plan is to have the same commercials in programs online as aired on TV for the first three days.
TV ads are bought and sold based on a metric called C3 (live commercial viewing, plus 3 days worth of DVR viewing) and they want to extend this to capture some of the online viewing.
I'd originally balked at those plans precisely because the commercial loads in online video are so different than on TV, but according to Wakshlag the plan is to make them the same, at least for 3 days.
I know there will be a lot of complaining about the increased ad loads if it happens. People will claim that more people will download the shows via peer-to-peer, or that the increased commercials will chase people to other sources for the content. I'm sure that will happen to a degree, but at least for now, I don't think it will be to a large degree. I don't fault the TV networks for wanting to do this, it makes a lot of sense to me. As does their desire to get the measurements to support it sooner, rather than later.
I view this as a pretty intriguing story, particularly what will amount to huge increases to the number of ads in online video streams of TV shows. But the first time I posted about it, not all that many people read it. So I am trying again to assess whether this is actually really a big deal story, or whether it's like my obsession with Video On Demand where I am really interested, but most people just don't really care about it.
By the way theoretically On Demand will ALSO will carry the same commercial loads as the TV airing -- and props to AMC's Mad Men which already does this, whether the advertisers are paying or not.
if it helps to keep the tv show on the air than i am all for it
I wonder when they think they can get all the ducks in a row to get this started? I’d guess it’s impossible for this season, and even tough for next season.
I can empathize with the networks placing more ads with services like Hulu; this is business after all, but when I purchase a license for video on demand I would expect that there would be no commercials. Again, no biggie so long as they don’t get carried away with it.
If you want to be smart you fleece slowly so there isn’t a backlash…
Go to one min per commercial segment for 12-18 months then increase to 90….
For some reason, I find this more irritating that when I’m watching an actual television. I think it’s my mindset when I’m watching online and when I’m watching a TV. When I sit in front of the computer to stream a show, I have a feeling of being held captive until the show is over and I’m impatient about commercials. I suspect it’s due to expectations. We know the amount of time for television commercials as opposed to the “unknown” amount of time for streamed advertisements.
Bill, indeed based on the Nielsen statements even next season will be a reach. The TV nets definitely want Nielsen to be ready for it by next season — they want it ready by summer 2010, but for now Nielsen is saying “2011″. It will be interesting to see whether the networks can speed Nielsen up.
I wonder what the relative cost of broadcasting over the air, or through cable, is to broadcasting online.
I would imagine that it costs less (in capital spending) to show a TV episode online than to broadcast through the air.
If it costs less to broadcast an episode over a certain medium, then the revenue they try to get from it should be less as well.
Just Tuned In, I think it’s the other way around. The incremental costs of additional viewers online DO have an expense (bandwidth). There is no incremental costs like that for TV/Cable/Satellite. Whether 1 or 100 million watch, the costs are fixed. On the Internet they are variable based on usage.
Thank god for torrents.
I see this is a way to drive people away from legal online and (hopefully) back to broadcast.
Frankly, it makes me more likely to not watch online (which I was so happy to do legally… in fact, I altered my viewing habits to watch those things less accessible online the day after… so, basically anything I watch on CBS or CW or cable, as well as House on FOX) and instead I will to wait until I have time to watch on DVR and skip the commercials anyway. A couple minutes per show I could handle for the convenience of being able to watch while there was downtime at work / anywhere I happened to be, but the full 15-16 minute broadcast commercial load is simply too much.
I approve of this.
I’ve said it before: i’d rather be forced to watch commercials on a dvr’d show (no fast forward) than have that show be cancelled due to low ratings.
I’m guessing local ads wouldn’t necessarily be included in this and they’ll probably run fewer in-house ads (no need for “coming up next…” ads or teasers for the local evening news), so it would still be fewer ads than regular TV.
I think it makes a lot of sense to try to find that threshold of how many ads they can put on without turning off viewers. I think viewers will definitely tolerate more than the 5 or 6 current ads. Though, it may be better to increase the ads incrementally so fewer people notice enough to complain. Going from breaks with one 15- or 30-second ad to breaks with 5 is quite the jump and people would react more than if they start by increasing it to 2 or 3.
Holly, it would probably have been better if they started high and winnowed it down — at least in terms of user complaints. The other way around is a tough road.
On the other hand there is no converged C3 to worry about if the national ad loads are not the same, so if C3 is the plan online and off, they will have to have the same ads online. There will be slightly less load than what’s on TV due to local (I’m not sure what will happen w/promos). I’m also not sure what they will do after three days.
The plan is to rotate the ads out after three days (no more C3 in play) but whether that would result in much lighter ad loads after 3 days and whether that’s potentially behavior changing if people would rather wait a few days for fewer ads…
it’s about time online views started having an actual affect on a show’s economic viability, but I don’t think they should go straight to 32. They should increase ads slowly, so people don’t get so bogged down right at once.
Am I insane in thinking that this is a step toward a more easily-quantifiable sales platform for online-only programming, i.e. shows like Dollhouse that are underperforming on broadcast but could possibly still turn a net profit in online viewing, or even for Hulu-type “web-only” shows? Or do we think advertisers are confident enough in the networks’ own online metrics?
Well, if they can’t get this up and running until at least next season, they can start adding a few ads now to acclimate viewers.
I don’t think the extra ads (even the full load) will make people wait three days if they don’t have to.
I think the solution to customer complaints about more ads in online streaming video is the networks offering a fee base premium service that would offer the programming commercial free to counter the loss of ad revenue. Cable Cos could offer it as an On Demand a la carte package with season passes and such. If you want to watch it for free you have to deal with commercials, if you want the convenience of commercial free viewing you have to pay for it. I think that would be a win/win for the networks, and the customers. People are less likely to balk at more commercials if there is another option. Not everyone would be happy about it, but you can’t please everyone and still make money.
johnthemon, that’s an interesting strategy given that ads can be added to online streams far sooner than the convergence measurement can be put into place.
Drew, advertisers do not want to rely on the networks online metrics, that’s why most of the players involved want Nielsen to get involved with “convergence” measurement.
And while I think it could mean that shows that are borderline in current viewing metrics may be saved by high online viewing, I think we’re a long way from having a show that is little viewed on television being “saved” because of all the extra online viewing.
I personally think that going from 5-6 to 32 commercials all at once is a big mistake. It will drive people to other sites.
I think ramping up the number of commercial would make more sense to get people gradually used to it.
The thing that networks/music companies are just starting to clue into is that it must be easy for the consumer as there are many alternatives available. Annoy them with too many commercial at once and they will drive the users to other sites.
For me I rarely watch the on-demand video within a day or 2 so I would just make sure that it was 3 days if I could not find the content anywhere else.
For this to work they must be able to shut down all the other alternative sites.
We do not get Hulu in Canada anyways which is very annoying as I pay for ABC, CBS, NBS on cable but cannot access the Hulu wetsite without playing around with proxies and fooling Hulu into thinking that I am in the states which is just not worth the trouble when content is available elsewhere. Up until recently, when the streaming starting to become readily available, one of the few instances in which I would use P2P was when I missed an episode of a show that I really cared about. If Hulu was available then I would have used it.