Comcast Wants More Ad Money From Video On Demand

written by: Richard Kastelein

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cordcutting#Fail.

In the short term it might work, but in the long term it is futile. 

  1. Broadcasters and Big Cable are being turned into Retailers
  2. Retailing is becoming an open market
  3. Broadcasters traditional revenue streams are threatened
  4. Video on Demand will be differentiated on price & brand (and quality of service - zero commercials being one of them)

Brian Steinberg, Senior TV Editor at Variety writes:

Essentially, Comcast hopes to determine the viability of a new idea: What if advertisers could place the same commercials that accompany, say, this week’s airing of “NCIS” or “The Blacklist” alongside older episodes when they are streamed on-demand in a way that would please advertisers? It’s a maneuver that could help TV networks push back against ratings erosion caused by the DVR and assist cable companies in countering the availability of TV programming on video-streaming services like Hulu, Netflix and Amazon.

“This is directionally where we are heading,” said Matt Strauss, Comcast’s senior veep and general manager of video services, in an interview with Variety. Comcast expects more people to use on-demand viewing as a primary means of watching their favorite programs. That means a video distributor like Comcast must offer not only the last few weeks of a show through VOD, “but having every episode and continuing to make those episodes available faster on demand,” he said.

According to Socialnomics by Erik Qualman, 78 per cent of consumers trust peer recommendations. Only 14 percent trust advertisements. Only 18 per cent of traditional TV campaigns generate a positive ROI. The NYTs notes that hit TV shows have most-skipped ads on Tivo.

From Television Remixed: The Controversy over Commercial-Skipping by Ethan O. Notkin. Albeit an American study, I am sure resonates everywhere.

If there is one thing that viewers of network television would agree on, it is likely to be the annoying nature of commercial advertisements. One study found that 65 per cent of the consumers polled "feel constantly bombarded with too much marketing and advertising."

In addition, 69 per cent of those polled were interested in "products and services that would help them skip or block marketing." Part of the problem is the advertising industry's use of the widely accepted "saturation marketing" model, which calls for massive increases in the number of advertisements. The emergence of "spam" in the last decade has also contributed to the growing perception of advertising in general as untrustworthy and disrespectful to consumers.

More from Variety:

...VOD’s quiet appeal to media companies? TV networks have managed to get cable distributors to block a viewer’s ability to fast forward past ads in exchange for VOD convenience – leaving media companies free to place fuller ad loads in VOD content than they have in other new venues like online streaming.

Comcast has ground to gain as well. In an era, when technology offers cable subscribers new ways to access video content, being able to show episodes of current-season TV series gives the video distributors a way to keep their customers from flirting with other services.

Tactics such as networks working in tandem with cable companies to block consumer ability to fast forward through ads is only going to drown Big Cable and Network TV faster. Consumers will go where they not only get the best value, but also get the best experience. 

 

About the Author

Richard Kastelein
Founder of The Hackfest, publisher of TV App Market and global expert on Media & TV innovation, Kastelein is an award winning publisher and futurist. He has guest lectured at MIT Media Lab, University of Cologne, sat on media convergence panel at 2nd EU Digital Assembly in Brussels, and worked with broadcasters such as the BBC, NPO, RTL (DE and NL), Eurosport, NBCU, C4, ITV, Seven Network and others on media convergence strategy - Social TV, OTT, DLNA and 2nd Screen etc.

He is a Fellow of the UK Royal Society of Arts (RSA) and UK Royal Television Society (RTS) member.

Kastelein has spoken (& speaking) on the future of media & TV in Amsterdam, Belfast, Berlin, Brussels, Brighton, Copenhagen, Cannes, Cologne, Curacao, Frankfurt, Hollywood, Hilversum, Geneva, Groningen (TEDx), Kuala Lumpur, London, Las Vegas, Leipzig, Madrid, Melbourne, NYC, Rio, Sheffield, San Francisco, San Jose, Sydney, Tallinn, Vienna, Zurich...

He's been on advisory boards of TEDx Istanbul, SMWF UK, Apps World, and judged & AIB awards, Social TV Awards Hollywood, TV Connect & IPTV Awards.

A versatilist & autodidact, his leadership ability, divergent and synthetic thinking skills evolved from sailing the world 24000 miles+ offshore in his 20′s on sailboats under 12m.

He spent 10 years in the Caribbean media & boating industry as a professional sailor before returning to Europe, to Holland.

A Creative Technologist and Canadian (Dutch/Irish/English/Metis) his career began in the Canadian Native Press and is now a columnist for The Association for International Broadcasting and writes for Wired, The Guardian & Virgin. His writings have been translated into Polish, German and French. 

One of Kastelein's TV formats was optioned by Sony Pictures Television in 2012. 

Currently involved in a number of startups including publishing TV App Market online, The Hackfest and Tripsearch TV. As CSO for Worldticketshop he helped build a $100m company.

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