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VOD Goals: More Simplicity, With Ads

4/18/2004 8:00 PM Eastern

Even as programmers release their first wave of video-on-demand content, executives are trying to determine which innovations should comprise the next wave.

Experiments later this year could include ad insertions in free VOD content on Comcast Corp. systems to “chaptering” on-demand, in which, for example, a consumer could call up all of Michael Jackson’s longform videos, said Rebecca Scilingo, the MSO’s director of new products, digital television.

“We need to get experience in the ad-insertion world,” she told a panel at Digital Hollywood, a recent gathering of content creators and technology manufacturers in Santa Monica, Calif.

SELECTIVE ADS

But Comcast doesn’t just want to place ads. It wants to target them, so a family watching VOD fare won’t see an ad for disposable diapers unless they actually have a small child.

Comcast will continue to use music to lure consumers into sampling the technology, she said, noting that 60% of consumers in the Philadelphia cable system have now used VOD.

Greater content choices also will lure users, she said. Comcast now offers 1,500 hours of content, which should expand to 2,500 hours by midsummer and ultimately to 10,000 hours.

Operators and content creators both still express frustration over issues that complicate the distribution of popular programming, including rights clearances and standardization. Panelists uttered “metadata” as if it were a curse word.

Metadata are the content description and titles that must appear in browsers, arriving at the viewer’s set-top guide at the same time as the content itself becomes available. Programmers must cope with a variety of different guide formats used by various cable operators.

Each piece of content contains 35 points of information, such as program length or rating. If the descriptors are over by even one letter or digit, a guide can kick out the entire entry.

Waiting for copyright clearance can also slow experimental offerings. Mary Coller, senior vice president of SoapCity.com for Sony Pictures Digital Networks, said the site recently offered users access to four episodes of the now-cancelled Dawson’s Creek. The content was available during a 28-day viewing window and attracted 2.5 million unique users, she said.

Research indicated 75% of site visitors would download other TV-series episodes, especially sitcoms, she said. To offer them, though, Sony needs to accelerate music clearances.

In the Dawson experiment, it took four months to gain the necessary permissions, she said.

The transition from linear TV to VOD content comes more quickly, of course, when the distributor owns all the rights.

SCRIPPS-ON-DEMAND

That gives Scripps Networks — which provides VOD fare from its Food Network, HGTV and other channels — greater freedom to adapt shows.

Channing Dawson, senior vice president of new ventures at Scripps Networks, said content repurposed for VOD gets altered radically “to battle the remote.” Gone are opening show sequences and other material that slows the pace.

Now comes the challenge of integrating advertising or charging for the material viewed. The latter faces a psychological hurdle, because cable customers feel they’ve already bought the content as part of their cable bill, Dawson said.

Scripps is working with advertisers to change its whole ad model. For instance, faucet maker Kohler Co. may partner with Scripps to produce advertising as primary content.

“If you just put six advertisements in a half-hour show, 80% of them will not be seen,” he said. Scripps expects to find a formula that works: it hopes to generate 20% of revenue from on-demand applications within the next five to 10 years.

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