Turner Broadcasting System has put episodes of Adult Swim’s Aqua Teen Hunger Force and Robot Chicken onto the Internet broadcasting service Joost. VH1 is providing Flavor of Love and American Gangster. MTV is sending over The Beavis & Butt-head Show and Laguna Beach.
For Turner, considering whether to put shows on Joost does not limit its on-demand options or its business with cable operators, said executive vice president of business development Dennis Quinn. “We don’t see this as an either or, really. We see this as an 'add.’
“We’re building brands without borders,” as Quinn puts it. “We want our brands to show up where people show up.”
In fact, Turner feeds cable operators and Joost with content from the same on-demand library. Right now, cable operators get “north of 150 hours” of programming from 10 Turner networks; Joost gets six to eight hours apiece from Cartoon Network and CNN, as well as shows produced for the former Turner South.
MTV Networks takes a “back-catalog” approach to Joost, putting content that is at least a year old online as a means of promoting viewership of what’s currently on TV, according to executive vice president of affiliate sales and marketing Denise Dahldorf. The programmer also has put episodes of The Ren & Stimpy Show onto Joost, giving the 1990s Nickelodeon hit a new life online.
Turner and MTVN also get license fees for the programming that appears on Joost; a chance to see whether digital-rights management works effectively online, through Joost’s service; and a first-hand look at how Internet users respond to such features in Joost as users’ ability to chat about shows with each other, while watching.
In some cases, though, there can be an obstacle: What senior vice president Kevin Dowell of Insight Communications calls 'turfism’ between cable operators and programmers.
Operators want to get as much programming out to viewers as possible for free. Programmers want, somehow, to get paid for the additional viewership. So far, operators haven’t found a way to incent programmers to give their shows away.
“The fact of the matter is that for us, cable operators, to protect the video-on-demand space for advertisers the best free content has to reside there,” said Dowell.
With Joost, viewers must watch ads in the programs that are sent out over its Internet network, and as much as 90% of the ad revenue goes back to the programmer.
One operator that found a way around the “turfism” is Cox Communications. Right now, it’s concentrating on bringing broadcast programmers into its on-demand lineup.
Cox worked a deal with The Walt Disney Co.’s ABC Television Group to put episodes of Desperate Housewives, Grey’s Anatomy, Ugly Betty and Lost onto the FreeZone of its on-demand service.
The episodes are delivered starting the day after they air for the first time. ABC gets to keep all the ad revenue. And, critically, the ability of viewers to fast-forward through the ads is disabled. The programmer gets more viewership of ads; the operator gets another hook to retain customers. For free.
It’s content that’s “already on our platform,” said Cox senior vice president of programming Bob Wilson. That’s what drove the deal with ABC, and not any future competition with Joost. “We don’t see Joost as serious competition at this point,” he said.
For instance, Dahldorf pointed out, MTV right now offers only highlights of past episodes of The Daily Show With Jon Stewart or The Colbert Report. One reason: It often takes 30 days advance work to make sure programming gets properly set up to go into cable operators’ on-demand vaults, she said.
Programmers do pocket all the advertising revenue, but it can be hard to sell on-demand shows broadly, Dahldorf said. The data about on-demand spots is limited to numerics like the number of starts, and demographic data about who’s watching is lacking. And the mechanics can be a burden. Swapping out an Oil of Olay ad for a Cascade ad means recoding the content with the new ad and resending the whole package.
Then, there’s the continuing problem of viewers simply skipping the ads, after all this, by fast-forwarding through them.
Insight, for its part, is trying to find ways to make on-demand services more engaging for programmers. It’s working on ways to give viewers on-screen buttons they can push to go directly to one- and two-minute infomercials on cars and other products, without wading through ads inserted in the middle of programs.
'It gets back to control,” said Dowell. With on-demand, viewers expect to be in control of not just the programming they watch, but the commercials as well. Or so the theory goes.
In any case, “I think it’s incumbent on the cable industry that the programming remains on VOD,” Dowell said. And, “if Joost is cutting better deals with programmers than cable operators, then shame on us.”