Is ad-supported video-on-demand finally about to become a real business?
Comcast is touting that it has begun running dynamically inserted VOD ads from Chrysler and Kraft, in 17 markets, across a range of NBC Universal cable networks (see Comcast, NBCU Bring Dynamic Ads to VOD).
“This is not a test,” Marcien Jenckes, Comcast’s senior VP and general manager of video services, told me. “This is an actual rollout of a mature product that is effective at making [VOD] monetization happen on par with the other platforms.”
The ads initially are running in 17 Comcast markets: Richmond, Va.; Miami; Philadelphia; New York; Boston; Burlington, Vt.; Washington, D.C.; Baltimore; Roanoke, Va.; Detroit; Indianapolis; Jacksonville, Fla.; Orlando, Fla.; Naples, Fla.; Nashville, Tenn.; Mississippi; and Huntsville, Ala.
Comcast promises to bring dynamic VOD ads to its full footprint “in the coming year.” The company has been working with ad-insertion vendor BlackArrow for several years on this front (see Comcast Serves Up VOD Ads In Sunshine State).
So, you might say, that’s fine that Comcast is able to do this with NBCU — but after all, they’re part of the same company. Next year, the MSO expects to extend the capabilities to other networks as well as through Canoe Ventures (see Canoe Preps ‘Pragmatic’ National VOD Ad Platform).
Jenckes suggested Comcast might go live with additional programmers sooner: “We have actually been working with a whole range of programmers to launch this into the market. We will be out there with other networks and programmers in the coming weeks,” he said.
As for who sells the ads, Jenckes said the arrangements are the same as with linear TV: The programmers sell their own ads for the most part, and Comcast negotiates either a revenue-share or secures part of the inventory.
Again, the main message he wanted to drive home: Comcast’s VOD advertising capabilities are now in the same league as linear TV and online video. And it’s in fact more valuable than Web video, he argued, since VOD is on the big-screen TV and more engaging in a lean-back environment. (Although according to a study by YuMe and IPG Media Lab found online ads have higher engagement than TV.)
“Historically programmers are very good at monetizing their linear content and their online content — but not so much on VOD, which kind of made VOD a third platform,” he said. “We’ve been working hard to make it a monetizable platform, and we think it’s now up to par with the other platforms.”
Down the line, Jenckes added, “as we roll this out to our full footprint, this gives us the opportunity to create even more value with addressability.”
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