Cable Operators

Time Warner Channels VOD Strategy

4/28/2006 8:00 PM Eastern

Time Warner Cable’s video-on-demand advertising strategy is organized around a familiar concept in the cable business: the TV channel.

The No. 2 U.S. cable company has assigned dedicated channel numbers to a handful of ad-supported on-demand offerings that are available throughout most of its markets.

In New York City, for instance, channel 1276 offers Driver TV, a collection of automobile profiles and related content that viewers can roam through at will. Another channel is a movie trailer repository, with content provided by studios and sponsored currently by American Express Co. A soon-to-launch VOD service, Journey TV, features travelogues and long-form virtual tours of enticing vacation spots.

PLANS FOR 15 CHANNELS

All told, Time Warner Cable’s advertising division plans to populate 15 channels in most of its markets with on-demand fare that’s supplied or sponsored by advertisers and organized thematically around familiar subjects. “We’ve asked the cable companies to reserve 15 channels. And each of the offerings for the foreseeable future will have its own channel,” said Larry Fischer, the president of Time Warner Cable Media Sales.

That’s a departure from the way other cable companies, like Cox Communications Inc. and Comcast Corp., have built their ad-supported on-demand platforms. Those operators have adopted a presentation approach that’s more akin to an Internet portal, where a single destination takes viewers to a broad selection of on-demand content that ranges from how-to infomercials to virtual automobile tours.

In Time Warner’s case, much of the on-demand content is similar to what’s available from Comcast’s Searchlight VOD portal, or Cox’s FreeZone menu. It’s the way the content is organized and presented that’s different.

“I think people are used to channels. They’re not used to portals,” said Fischer.

A local cable advertising veteran who previously ran Time Warner’s New York City advertising company, Fischer is integrating advertising into the on-demand channels in several ways. Driver TV’s opening screen, for example, features positions for up to four auto companies. One of those positions has been sold by Time Warner Cable Media to General Motors Corp. Selecting it means viewers are whisked to a showroom displaying only GM vehicles. Viewers who ignore the GM come-on can enter the broader Driver TV content offering.

For its movie trailers channel, Time Warner Cable Media Sales has integrated 15-second commercials from American Express that appear immediately prior to a selected movie clip. A separate music video on-demand channel, showcasing clips organized by sister company AOL Music, will integrate a 15-second commercial into every other clip viewers order in an effort to strike a balance between sponsor presence and viewer patience.

The newly christened Journey TV channel takes a different approach. There, content will consist mainly of “advertorial” travel features and vignettes that are placed by sponsors like the Aruba Tourism Authority, Fischer said.

Despite his faith in the “channel” approach to organizing ad-supported on-demand content, Fischer said he’s also watching how a couple of alternative concepts work in two Time Warner Cable markets.

In Austin, Texas, Time Warner offers Bevo on Demand, an ad-supported service that televises archived University of Texas football games (it’s named after school mascot Bevo, a Texas longhorn steer). The Austin division also provides eBay On TV, a variation of the popular Internet auction portal, via its digital video recorder platform, Fischer said.

In its Albany, Binghamton, Rochester and Syracuse, N.Y., systems, Time Warner has added a more traditional portal-style on-demand offering. There, the free service delivers viewers a broad menu of advertorial tips and how-to videos purchased by local advertisers and housed under the brand “Your Neighborhood Expert.”

Fischer shrugs off the contradiction between the more pervasive “channel” model he’s deploying across most markets, and the “Neighborhood Expert” portal approach in the upstate New York systems. “It’s cable,” he said. “We’re just sort of keeping our eye on that. I don’t know if it will be our strategy going forward or not.”

The approaches may vary, but so far they all share a common attribute: They’re profitable. “Every one of these things is a money-maker,” Fischer said. “[VOD] has the potential to be a game-changer. We’ve just got to keep working with the technology.”

MANHATTAN PROJECT

Fischer also is optimistic about the introduction of VOD-inclusive interactive advertising in Time Warner’s Manhattan footprint. Employing technology supplied by Navic Networks, the interactive advertising service invites viewers to click within certain 30-second commercials to invoke a related longer-form advertisement about the advertised product or service — a so-called “telescoping” approach.

In the case of a movie advertisement, a viewer who clicks within the linear 30-second commercial will invoke the movie-trailers channel, where a full-length trailer will begin to display (and a 15-second integrated commercial may appear, too). Near the end of that trailer, a secondary invitation will appear, asking viewers if they’d care to find out nearby theater locations and movie times from the Navic-powered on-screen interactive service.

Fischer thinks the introduction of interactive advertising in the nation’s media capitol could help advance the medium’s cause simply by making the experience familiar to the advertising and media agency planners and buyers who live in the city. “Once they see this, it will begin to get agencies and clients together in a way they’ve never gotten together before,” Fischer said.

But first impressions only go so far. For the interactive advertising category to thrive, Fischer said it’s important for media planners, buyers and creative developers to join together in brainstorming and planning sessions. Otherwise, Fischer fears, a momentum-sapping cycle of separate meetings, miscommunication and missed opportunities could arise.

“The media people say, 'Great idea, you should talk to the creative guy.’ Then you have a third meeting with the account guy. That’s the frustrating part,” Fischer said. “I’m presenting game-changing technology that will enable them to market goods and services in a way that’s never been offered before. And they don’t even see it.”

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