Are Viewers Getting More Tolerant of Online Video Ads?


New York — Ad-supported TV shows online — think Hulu — typically have fewer ads than the episodes you can actually watch on TV.

That could be changing, as people show more willingness to sit through longer commercial breaks at their computers, according to speakers at the VideoSchmooze event today at the Samsung Experience store in the Time Warner Center. One caveat: The two guys who said this the loudest both sell Internet video advertising services.

Doug Knopper, co-CEO and co-founder of FreeWheel, noted that “has gone to a full ad load and has seen its viewing numbers increase.”

That said, Knopper added, “If it goes to full TV ad load, 8 minutes for every 30 minutes of TV… The consumer is going to say, well, why am I watching it here? I’ll just go watch it on TV, where I have a DVR and can skip the ads.”

Steve Robinson, CEO and founder of digital video ad fulfilment provider Panache, added, “The ad loads are going to go up… We need to have an ad load similar to TV. These shows are made for companies to sell advertising. If they can’t make money from that they won’t make the shows.”

Pay-TV providers like Comcast, meanwhile, continue to insist that the availability of TV shows and movies over the Internet isn’t eating into their businesses.

“Our concerns are more about the economy — that’s driving more of what people are willing to pay for premium services,” said Charlie Herrin, Comcast Interactive Media senior vice president of products and technology. “We see [online video] as additive.”

For Comcast, delivering programming to additional connected devices is “a necessary part of the service,” he said.

The fundamental business model of cable TV will continue to be viable, Herrin said: “All the studies we’ve seen show aggregation works. It gives people the most choice in the most cost effective way.” However, he added, “As these devices become more personal, being able to get the content you’re interested in out of this big basket of content… is a powerful idea.”

It’s clear people are going to continue to subscribe to TV, Samsung director of content Olivier Manuel said. “The cable companies provide a service people like,” he said. “The question is, to what extent is this an opportunity for cable companies to bring content to new devices without a set-top box.”

Jeremiah Zinn, senior vice president of digital products for MTV Networks, also maintained that the issue is “not about the death of pay-TV or where pay-TV is going to go.”

“The problem is, there isn’t a pay offering in all places,” he said, which programmers like MTVN are trying to address with TV Everywhere authentication services. “What we have is more of a gap problem — we need to be faster about dealing with a fragmented market, delivering to consumers what they want, where they want it.”

Added Zinn, “It’s our game to lose. And we have time. We sit in a room where people connect their TVs today. We have time to get it right and test it and do it the right way.”

On the topic of how TV content can leverage social media, Zinn said MTV often incorporates social media features into show repeats rather than premieres. “We create a new experience for each repeat,” he said. “We used to have the VJ. We now have the TJ — someone whose job it is to manage Twitter during events.”

Meanwhile, Herrin was asked about one of the hot-button issues of the week — whether content owners should be worried that cable operators will put up “toll booths” to charge for access to their high-speed Internet customers.

On Monday, Level 3 Communications accused Comcast of doing just that, after the MSO asked Level 3 to pay interconnection fees to deliver an increased amount of video traffic on behalf of Netflix. Comcast responded that Level 3 was trying to avoid paying standard rates the MSO charges all content distribution network providers (see Comcast Open To FCC’s Participation In Resolving Level 3 DisputeLevel 3: Comcast Doesn’t Have Right To Set Pricing For Network Access and Level 3 Alleges Comcast Demanded Fees To Deliver Internet Content).

Herrin said the issue wasn’t his area of expertise, commenting, “We offer a great high-speed service, and we’ve increased speeds and we continue to do so — and I think I’ll leave it at that.”

The panel was moderated by Will Richmond, VideoNuze publisher and industry consultant. The event was presented in conjunction with the New York chapter of the Cable & Telecommunications Marketing Association.