Friday, May 11, 2007

Big News From The Cable Show

The Cable Show was held this week in Las Vegas. The big news is that network executives are willing to let some of their best content air on VOD 24 hours after it airs on broadcast. The only caveat - commercials will be included and the fast-forward button will be disabled. In other words, no skipping of commercials.

And to think that they were so close to getting it right.

As most everyone knows, the problem with VOD is that the content, outside of movies and kids programming, is not interesting enough to attract large audiences. The fact that the networks are willing to put great content on VOD only 24 hours after it runs on broadcast starts to address that. But then they had to go muck it up by saying viewers won't be able to fast-forward through the commercials.

Their argument went something like this. Because they are making it convenient for viewers to access their favorite shows when they want on VOD, viewers won't mind sitting through the commercials. In fact, they made is sound as if viewers would be honored to sit through the commercials. Almost as if the networks were doing the viewers a favor.

Please. What viewers want is complete control. Not partial control. And they will gravitate to the platforms that give them the control they are looking for.

The network execs believe that they have only two options. Both options are based on a mass media mindset. The first is to force viewers to watch commercials. The second option is to charge them extra to watch programs without commercials. In other words, either advertisers pay for the programming by running ads or viewers pay for the programming by buying it on a pay per view option.

What the network execs are missing is that there is a third option - a non-mass media option. Which is to have the advertisers pay for the programming by running ads, but not to have the ads be intrusive to the programming. Let viewers opt-in to the ads that interest them, just like they opt-in to the programs that interest them.

Will viewers opt-in to ads? Current studies are proving they will. One study on a cable VOD platform in the midwest has the opt-in rate running at around 18%. Most network execs would take that number. Advertisers definitely would.

Why?

Simply because advertisers know that when they run commercials on broadcast TV today, at best only 10% of the viewing audience is interested in any one particular product at any one particular time. The unfortunate thing about the system is that it requires advertisers to pay for 100% of that viewing audience to get the interested 10%.

90% waste is not a good number no matter how you look at it.

An 18% opt-in rate with no waste will prove extremely attractive to advertisers.

Less can become more. And on VOD, less needs to become more.

The objective is not to exchange one mass media - broadcast - for another mass media - VOD. Video-on-Demand will never be a mass media. Therefore, it should not be sold like one.

Video-on-Demand is the viewers' network. As such, on VOD, broadcasters need to play by the viewers' rules.

Yes, the networks came half way. And granted, half a mindchange is better than none.

It's the next half that will be the hardest.

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