On Demand Pays Off for Music Choice

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While many companies are searching for a video-on-demand business model, Music Choice claims it has found one.

The music-video supplier to Comcast Corp.’s on-demand platform has landed a number of $50,000-per-month advertising campaigns built around its videos, which generate an aggregate viewership of 25 million views a month.

Since it launched late last year, Music Choice has executed campaigns for Diet Sprite Zero, Best Buy, Geico, General Motors Corp.’s Saturn and Schick, according to senior vice president of marketing, advertising and sponsors Christine Tancredi.

“Within two months after launch, we had closed our first ad deals,” she said.

SPRITE 'OVERLAYS’

“Sprite Zero launched in January with 15-second ads” created by Music Choice, Tancredi said. It was an integrated sponsor of Unfiltered, a half-hour show mixed in with the service’s music clips.

“They got spots in the show and video overlays in the show promoting Sprite with videos we felt were relevant to the Sprite brand,” she said.

Best Buy advertised last spring during the channel’s Grammy Awards show, in a TV spot that featured the artists The Black Eyed Peas. That 30-second spot ran before certain music videos on the service.

Auto-insurance provider Geico ran spots featuring its dancing gecko.

Music Choice is owned by a consortium of cable companies, including Comcast, as well as Microsoft Corp., Motorola Inc. and record labels EMI and Sony Music. It carries 300 to 400 music videos and related content on Comcast, with plans to grow to 3,000 videos.

The on-demand service is only available on Comcast’s 9 million on-demand homes, at the moment, but Music Choice negotiating for more cable carriage elsewhere.

Music Choice also hosts several thousand videos on its broadband Internet site, available on the video portion of Comcast’s online portal, The Fan.

VOD USAGE HIGHER

Tancredi said the on-demand TV usage is 100 times higher than on broadband. “We get 25 million views a month through VOD,” she said. “The numbers are a lot smaller on broadband.”

Tancredi’s been able to generate a revenue stream from those on-demand.

“We executed our own deal with [viewer-measurement firm] Rentrak [Corp.] and have a unique deal with Comcast,” she said. “It allows us direct access to Music Choice assets on a real-time basis. We were the first in and we negotiated hard. Comcast wanted music videos and we wanted to do a deal.

“We have guaranteed delivery,” Tancredi said, so only the ads that aren’t skipped get credit as an official “view,” she said.

Ad deals generally range from one to three months, Tancredi said.

LEGWORK ON ARTISTS

Music Choice helps advertisers do much of the legwork to determine which 15- or 30-second spots should appear alongside which artists.

“We provide them some information that we find interesting,” she said. “There is a lot of discussion between marketing, ads sales and programming. We have a great pulse on who are the emerging artists.”

For Music Choice, the biggest challenge has been building the ad-sales team “for us to knock on enough doors,” Tancredi said. “We’re excited because initial advertisers are renewing.”

Next year, the service hopes to launch a customization feature, allowing Comcast customers to create a Music Choice user profile, allowing them to get the music videos they want regardless of whether they’re viewed on VOD or broadband.

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