“TV Everywhere” looks to make money with full ad loads online and On Demand
Hurray! The trade publications are finally getting around to writing about “TV Everywhere” and now at least mentioning that the plan is to include the same ad load as on TV.
Advertising Age has a good primer on it, including juicy nuggets like this:
What’s the ad model
A TV-length commercial ad load disables fast-forwarding, due to increased frustration among programmers who are selling top-tier TV shows with a third of their on-air ads online. Jack Wakshlag, chief research officer at Turner Broadcasting, said a typical on-air episode of “The Closer” runs 18 ads*, which is why it makes little to no revenue sense for the network to run the same episode online with a third of the same commercials against it. “If I can get 4.5 times my TV CPM online [the cost to advertisers to reach 1,000 viewers], I’d be happy and wouldn’t need to do anything,” he said. “But nobody’s getting four times TV CPMs online. Nobody at Hulu’s getting twice the TV CPMs. If people who already watch the show see it with a full commercial load, it’s still a chance to catch up on shows they miss.”
On-Demand with disabled fast-forward! That’s something Bill and I both have always wondered, “Hey, why don’t they do that?” We like the idea. You don’t need to incur the monthly DVR subscription fees to still watch programs on your own schedule.
If you want to skip ads you can subscribe to DVR services. Currently, less than a third of the homes in the US are equipped with DVRs, so the market for a “no extra” cost service for those who already have cable set top boxes isn’t tiny.
Mr Wakshlag is the poster boy for “TV Everywhere” and is perhaps the hardest working man in research when it comes to stumping for good measurement. He has been almost ubiquitous and I give him a lot of credit for turning up the heat on Nielsen:
“My next TV season is this summer, I’ve got three nights of top-flight dramas on TNT coming out this summer — same thing’s happening on TBS and TruTV. I want these impressions counted next summer,” he said. “If it’s going to take 18 months, there’s no reason to put my content out there at all because I’m not going to go around my partners at Time Warner or Comcast — why should I put it up there if I’m going around their content distribution system?”
Read the whole Ad Age article for yourself and then decided whether you think Jason Kilar has a long future at Hulu. I worry that Jason really does want to provide the best consumer experience possible. But if the best consumer experience doesn’t provide many ads, but also doesn’t make any money… In matters like these I always think back to the golden age of the late 1990s when boys and girls on scooters would deliver soft drinks and DVDs, and video games (and even Palm Pilots and Kit Kat bars) to my door at retail prices and no extra delivery fees.
It was the best customer experience ever. Sadly, Kozmo.com went out of business.
*Doesn’t include ad time for the cable providers or network promos