US broadcasters change web strategy

17 July 2009

NEW YORK: Some of America's biggest broadcasters, including Comcast, CBS and Time Warner, are seeking to increase both the amount of content they make available online and the number of ads they show alongside this material.

While many TV companies are developing their presence on the web, the programmes they allow consumers to play back via video-on-demand platforms can include as few as one or two ads.

Hulu, the online service set up by Disney, NBC Universal and News Corp, also currently shows just one execution in each commercial break.

As part of the "TV Everywhere" initiative developed by Comcast and Time Warner – and which is being tested this month – the cable companies are seeking to increase that total.

Shows such as TBS's My Boys and TNT's The Closer will thus be made available to cable subscribers online accompanied by the same number of ads as when they were originally broadcast on television.

Certain content will also be delivered with exactly the same spots as on TV, in the hope that online viewing figures could be used as an extra fillip to attract advertisers.

Andy Heller, vice chairman of Turner Broadcasting, which is part of Time Warner, said "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."

"If you give the consumer the opportunity to watch near real time without the full ad load, you run the risk of cannibalizing revenue. We're still in the business of asking people to watch commercials," he added.

Broadcasters like CBS, the CW and NBC Universal have also begun to increase the volume of ads served in shows offered via their own web portals to around two per break.

Vivi Zigler, president of NBC Universal Digital Entertainment, argued this development was "inevitable", as "it has to get there to sustain what it costs to make premium shows."

Earlier this year, ABC and Nielsen also produced research showing that doubling the number of spots in web video did not undermine advertising effectiveness or viewer perceptions.

Albert Cheng, executive vice president of digital media at Disney–ABC Television Group, said the company would "like to get to the point where the economics of online video are at parity with what we get on broadcast. One way is increasing the ad load."

Sharon Gallacher, managing director of global brands at Neo@Ogilvy, argued it is "beneficial for me for my ad to be in as low-clutter an environment as possible."

However, as she "would also like this medium to flourish," this means it is also "in my interest to make sure that balance is hit."

eMarketer, the research firm, has predicted that online video advertising revenues will reach $1.5 billion (€1.1bn; £914m) in the US in 2010, an improvement of 42% on this year's forecast total.

Data sourced from Wall Street Journal; additional content by WARC staff