San Diego is now a FreeZone for video-on-demand, as Cox Communications Inc. tests out the concept of ad-supported VOD.
With a dozen or so entertainment titles, as well as long-form informational advertisements, Cox wants to find out if its FreeZone service can free up incremental revenue on the VOD platform.
After several months of beta testing, FreeZone launched last week on the system's channel 997, with a mix of national and local ad sponsors, as well as locally generated entertainment content.
The initial FreeZone lineup includes a promotion for Diet Coke from The Coca-Cola Co.; a menu of videos and information from Sony Music; a Volvo concept sailing-expedition video that promotes its new sport-utility vehicle; a virtual tour and conservation information from the San Diego Zoo and San Diego Wild Animal Park; a soccer tutorial, provided by the Womens United Soccer Association's San Diego Spirit; the locally produced San Diego Insider
newsmagazine show; and inline skate videos from Salomon Sports.
FreeZone is powered by Concurrent Computer Corp.'s MediaHawk 3000 servers and N2Broadband Corp.'s asset management and delivery technology. The titles have full video-recorder capabilities, so they can be paused, rewound or fast forwarded.
N2 Broadband's Adbank system packages and manages the content, including video, still images and storyboard information. It also allows viewers to request more information from specific advertisers.
The Adbank system hands off the content to the MH 3000 for delivery to customers, and Concurrent's Business Management System collects viewer-impression data.
The plan is to field-test the service for about four months, and then evaluate whether it should be rolled out in additional markets, said Cox vice president of new-media advertising development Debby Mullin. During that time, Cox will try to answer several key questions — not the least of which is whether an ad-supported VOD service is economically viable.
"Will we earn our keep? There is X amount of server space, and it has to be something that makes sense for the company," Mullin said. "If it does work out, it is a great way for us to get incremental monetization from this platform we have already put in the field."
While it's far too early to gauge reaction from San Diego viewers, the idea that customers might actually want to watch an advertisement is supported by input from focus groups Cox convened this summer to view the beta product.
"They really enjoy that control that VOD offers them, and they really like having the choice of watching whatever it is they want to watch," Mullin said.
The fact the service will also offer viewers the chance to respond to the ads — either to obtain more information or to get a product coupon — is also a key element.
"I think that is going to be an important local differentiator for us in the local market, especially now that we can offer a tangible type of response to our local advertisers," Mullin said.
But while Cox will collect data about response to the ads, Mullin said the MSO wants to ensure that customers are given the choice to opt in to the advertising pitches, rather than having the ads forced on them.
At the end of an advertisement, customers are taken through an on-screen questionnaire that allows them to request more information or opt out of the message.
"Nothing is taken for granted — it is entirely permission-based," Mullin said.
LIFE ON THE SHELF
Content will also change each week, as Cox experiments with run times for different entertainment programming and ad selections.
In about three weeks, Cox expects the count will rise to about 24 choices ranging in length from 60 second for some children's spots to 30-minute videos. Much of the advertising content falls between five and 10 minutes.
"There is a long list of things we want to learn, but one of the things is what is the shelf life of content?" said Mullin. "So we have a plan to phase in and phase out some of our local stuff so that there is always some fresh content.
"So far, the way it looks, the advertisers will be cycling content through as well," she said.
If successful, FreeZone could go a long way to dispel early fears that by giving viewers control over what they want to watch, VOD will erode the vital balance between advertiser and cable operator.
"There is so much conversation about what video-on-demand is going to do with advertising and on-demand content in general," Mullin said. "I just think what we are doing is important because we are enabling change. We are not fighting change."