Cox-Disney On-Demand Deal Blocks Ad-Skipping
By Mike Reynolds & Linda Moss -- Multichannel News, 5/13/2007 8:00:00 PM
The on-demand world is going to get more demanding about advertising.
ESPN and ABC Television Group reached an agreement with Cox Communications on a trial that will give the cable operator's customers access to high-profile fare the day after the shows premiere on broadcast, but prevents subscribers from fast-forwarding over the ads.
Scheduled to begin this fall on the operator's system in Orange County, Calif., the test will give Cox digital-cable customers there access to ABC's Grey's Anatomy, Lost, Desperate Housewives and Ugly Betty the day after their broadcast premieres. Similarly, one ESPN on ABC football game per week would become available on the “Free Zone” section of Cox's on-demand service the day after it kicked off on ABC. Either way, Cox will disable the fast-forward option on the service, and the test is expected to roll into additional markets.
POSSIBLE 'BLUEPRINT'
There will be plenty of interested parties keeping their eye on the trial's performance.
“Given the rising pernicious impact of DVR consumption and the flow of ad dollars toward more accountable and engaging media, this announcement could serve as a blueprint for the broader television and cable industry,” wrote Sanford Bernstein analyst Michael Nathanson in a report. “If so, this shifting business model could ultimately reorder the current television food chain.”
The trial also provides another first for a cable operator: ABC.com's broadband media player will be syndicated to the Cox.net portal, providing users in Orange County with the ability to view the aforementioned fare online.
What the ad base on the platforms will look like is unclear. A Disney ABC Television Group spokeswoman said it had not yet been determined whether the programs would include their full commercial loads, if the advertisers would be the same as those that bought time in the linear telecast, or if national or local sponsors on the telecasts would have first dibs on securing placement in the on-demand arena.
Online, ABC's series airings include limited ads and a “sponsored by” identifier at the top of the viewing frame.
The two companies said they would work together to test dynamic ad insertion on Cox's on-demand platform when such technology becomes operational.
“We are excited about collaborating with Disney and using their great ABC and ESPN content to provide our customers with 'anywhere, anytime' access to content they value,” Cox Communications president Pat Esser in a statement.
Cox, which will have at least one spot to promote some of its services and products in the on-demand offering, will not be the only cable operator plying advanced services that include ads within broadcast fare.
Come September, Comcast On Demand, as part of the far-reaching distribution pact the nation's largest cable operator struck with The Walt Disney Co. last November, will offer Desperate Housewives, Lost and two other ABC shows for free in the seven Comcast markets where that network owns stations. The plan calls for the platform to carry the series' full load of ads.
A Comcast spokeswoman said the nation's largest cable operator continues to talk with Disney about content. “We're pleased that [Disney] recognizes the value of the on-demand platform,” she said.
For its part, Time Warner Cable's Start Over service functions as a network-based digital-video recorder, allowing viewers to “rewind” a program and watch it from the beginning, but prohibits the zapping of spots. Time Warner Cable chief operating officer Landel Hobbs, speaking on a panel at The Cable Show, noted that users of Start Over, which is on track to generate 1 billion VOD streams in 2007, “are fine with ads as long as they can time shift.”
EMBRACING CONTENT ACCESS
Albert Cheng, executive vice president of digital media for Disney ABC Television Group, also doesn't anticipate a backlash from Cox subscribers.
“We know from research that people would rather have access to the content. They're OK with sitting through the ads,” he said, adding that consumers already face the inability to fast-forward through trailers on DVDs.
Cheng, speaking on a new-platforms panel at The Cable Show, said the partnership was sparked by Cox's concern about Disney and ABC offering its programming online.
“It sort of stemmed from the very earnest questions from Cox to us of, 'Where are you guys heading with your online stuff? Are you guys going to strategize and push the envelope continuously with broadband content?' To which I answered yes,” Cheng said. “But our preference really is that if there is a way to figure out a brave new world of consumer experience in a closed-television environment, we're all for it.”
Keeping ads in programming that's offered on-demand is a way for Disney to capitalize on its content.
“Imagine a world where for the first time, we have a cable operator who is coming to the table with technologies to help us figure out how to monetize our content,” Cheng said. “That's an incentive for us, to as a programmer to say, 'Look, you know what, we're going to put some of our best shows on there [on-demand].'”
