Cheng: Inability to Skip Ads Won’t Anger Cox Subs

Disney Executive Outlines VOD Trial with Cable Operator

By Linda Moss -- Multichannel News, 5/8/2007 11:46:00 PM

Las Vegas -- Consumers won’t be frustrated by their inability to fast-forward through ads as part of a video-on-demand trial Cox Communications struck with Disney, a key Disney executive predicted Tuesday.

Albert Cheng, executive vice president of digital media for the Disney ABC Television Group, outlined in fair detail the genesis and goals of the trial Disney and Cox announced earlier in the day.

“It’s an unprecedented partnership where both the content-owner/programmer and the cable operator are really working together to figure out how to utilize technology to make a sustainable long-term business,” Cheng said during a panel on new platforms at The Cable Show ’07 here.

Under the partnership, ABC and ESPN will provide Cox with key primetime shows and football games on-demand, but the cable operator will disable the fast-forward option of its VOD service so subscribers won’t be able to skip ads.

ABC is offering up what Cheng called its best shows -- Grey’s Anatomy, Lost, Ugly Betty and Desperate Housewives -- the day after they premiere on the broadcast network.

ABC already offers that content on its own Web site, with ads included. So Cheng said he doesn’t expect a consumer backlash or frustration from Cox subscribers over that issue, although it will have to be clearly communicated that nothing is wrong with their set-tops.

“We know from research that people would rather have access to the content,” he added. “They’re OK with sitting through the ads. We’ve seen that with the ABC.com player. We even add more ads to those ad pods … The issue is they want [the shows] free. They want access. And they’re fine with sitting through the ads.”

Cheng pointed out that consumers already face the inability to fast-forward through trailers on DVDs.

He 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 monetize its content, according to Cheng.

“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,” he 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].’”

There are technologies that a programmer might rather have consumers use than a digital-video recorder, and rolling out DVRs is costly for cable companies, Cheng said.

“The more we can sort of leverage the [operator’s] network, the more we can work together to figure things out, we may actually create a world where a closed-television environment would be pretty attractive, so more content gets on the systems,” Cheng said.

He added that a lot of work has to be done before the VOD trial -- which will kick off in Cox’s system in Orange County, Calif. -- gets going.

“There’s a lot of engineering work to be done,” Cheng said. “It’s the start of a very long process.”

The deal will also involve addressable ad insertion.