Hunting for Dollars: Local Advertisers Help Time Warner Develop Content1/13/2006 7:00 PM Eastern
Like other Time Warner Cable systems, the Rochester, N.Y., division has launched local video-on-demand content. But Rochester has done it with a twist: The system partners with local merchants who help develop the programming and pay Time Warner a fee for carriage.
It’s revenue-generating local VOD content that produced $100,000 for the system in 2005.
In some cases, Time Warner partners with a local company to produce on-demand programming that the company sponsors. Spurr Outdoors — a hunting, fishing and outdoor show — is sponsored by the local Spurr car dealer. Spurr gains a strip ad on the local VOD channel and an ad before each VOD segment.
In another case, the local NBC affiliate is paying Time Warner to carry extra programming from the TV station that can’t air on its linear network on the VOD platform.
“It’s a win-win situation,” Time Warner vice president of public affairs Brian Wirth said.
The Rochester system launched local VOD on channel 111 last January, and now boasts more than 6,000 viewers per week.
Over the past few years, a fair number of Time Warner divisions have launched local VOD, but few with a revenue stream. “We looked at that, and we wanted it to be revenue generating,” Wirth said. “To get there, we had to get content on and to generate interest in the channel.
“We went to our local cable-news operation and posted information from them,” Wirth said. “The local [Public Broadcasting Service] station repurposed some of their content. And we also provided some internal segments about our products, like [digital video recorders].”
He added: “We got interest going, so we started looking at ways to market this and sell it into marketplace.” The first stop was talking to some nonprofit agencies in town, such as the United Way and the Rochester Zoo, about partnerships.
“We produced content around different exhibits [at the zoo],” he said. “It got unbelievable usage.”
The system began dividing its local VOD content into “branches,” Wirth said, and introduced a horizontal bar at the bottom of the screen to sell advertising and sponsorships.
The first merchant to step up was a local concert hall. Time Warner produced video segments about the hall, providing a behind-the-scenes tour, for a new local entertainment section on the VOD menu. The concert hall underwrote the segment.
“We started selling those branches,” Wirth said. “We went to a local health maintenance organization, Preferred Care, which sponsored a 'Living Well’ segment. It ties back to their brand. It is fitness tips, such as staying healthy in the working place, etc. They brand it with their logo in front of VOD segment.”
Time Warner also went to a local health club, which sponsored a “Get Fit Challenge.”
“We followed six people through a once-a-week fitness program” for more than a month, Wirth said. The VOD segments charted their progress, but did so in an entertaining fashion, Wirth said. “It gave the health club a great way to market their state-of-the-art product,” he said.
The local NBC affiliate has supplied sponsored content, ranging from repurposed news content to segments about the Winter Olympics and the Ladies Professional Golf Association, which holds a major event in Rochester each year. Once the NBC content hit Time Warner’s servers, usage jumped from 4,000 a week to 6,000 views per week, Wirth said.
In total, the system has 10 paying VOD sponsors.
Wirth is in discussions with the TWC system in Albany to approach regional advertisers, such as New York state tourist spots to place VOD segments on Time Warner systems throughout the state. “There is a statewide opportunity for travel and tourism. We had a wine trail segment,” he said, “where the local wineries paid us per vignette segment.”
The strategy does incur VOD production costs for Time Warner. Spurr Outdoors involves following hunters around western New York with camera crews. But with $100,000 in the bank and hopes for $200,000 in 2006, Wirth says the investment is paying off.
“Last year was scratching the surface,” he said. “The intent was to generate more views. That’s what the NBC relationship brought to us. We hope to double that revenue stream. We will mine more categories, take the viewership and take the renewal price up.”
Sponsors receive a banner in front of their VOD segments, plus banners at the bottom of the VOD menu screen. Sometimes, a sale is nothing more than tapping into a businessman’s passion. “The guy that owns Spurr is a big hunter,” Wirth said. “He wanted to brand the show with his dealership name.”
The sales are handled by Lara Pritchard, the system’s marketing manager, not by the local ad sales staff. “At first, it was tougher than we expected,” Wirth said. “Now that we’ve created brand awareness, we are getting people coming.
“The production staff has embraced this,” he added. “It gives them the opportunity to be extremely creative. It allows them to do so much more in a long form.”
By now, the Rochester system has produced hundreds of local VOD segments, Wirth said, in 12-plus categories. There are more than 200 news segments. Most segments run three to five minutes, but some PBS fare, for instance, runs 20 or 30 minutes.
“We’re posting new material on various branches daily,” Wirth continued. “We shoot for a full refresh every two weeks. We found if we diverge from that, viewership goes down. People look for something new.”
In addition to providing revenue, local VOD does something else for the system: cement localism in the minds of subscribers. “Local VOD provides something our competitors can’t,” Wirth said.