Comcast expects video-on-demand advertising impressions on free VOD content to increase tenfold in the next 12 months, according to Chip Meehan, Comcast Spotlight's West regional vice president of integrated media sales.
"We have 400 million monthly VOD views on Comcast. I'd love to have a dollar for every view," Meehan said, speaking on a panel at the Multichannel News/B&C fourth annual On Demand Summit here Wednesday.
Meehan predicted that Comcast will see the proverbial "hockey stick" upswing in VOD advertising revenue as the MSO completes licensing agreements with programmers.
"Once the first couple of them are figured out you can assume the rest will follow," he said, and referenced Comcast's sweeping deal with The Walt Disney Co. struck earlier this year: "If Comcast and Disney can figure it out you can assume we'll figure it out with others."
About 80% of Comcast's 400 million monthly VOD views are free TV content. If half of those 320 million views are from cable programmers, with whom Comcast would be likely to get some inventory, Meehan told the audience, "that's 160 million impressions per month. That times 40 bucks starts to be a pretty big business."
Comcast currently has 17 million homes enabled with dynamic ad insertion for VOD, aiming for full coverage by the end of 2012. As of the end of the first quarter, Comcast had about 20.1 million digital TV subscribers.
The addition of dynamically inserted ads into VOD actually results in a much better user experience, said Scott Criley, director of new media at Harris's Broadcast Communications division. Prior to VOD DAI, "it was a painful experience, because you would see the same ad over and over again -- and you'd abandon halfway through," he said. "Now the ad mix you see are more like linear TV."
Programmers now are shifting rapidly for dynamic ad insertion on VOD, said Avail-TVN vice president of advanced advertising product placement Joni Kinsley. Content owners need the media-services company to process their VOD content for much faster turnaround, to take advantage of Nielsen's C3 ratings window, and they need more visibility into operators' ecosystem.
Kinsley said the next challenge is in the workflow side of VOD advertising, to make buying and selling ads for on-demand content efficient and integrated with existing business processes: "Creating brand-new work-streams... is not going to make sense to an operator or programmer over time," she said.
According to Comcast's Meehan, households that use VOD tend to be better educated, have higher incomes, have more kids and buy more goods and services. "It seems to me that it's sort of a no-brainer" to place ads on VOD even in the absence of industry-wide set-top data for reporting, he said. Meehan added that "I think we'll have set-top box data at scale in 12 months" from multiple operators.
Comcast has disabled fast-forward functionality on free VOD for some programmers but not for others, Meehan noted. However, he added, "We're not seeing a decrease in views for VOD with trick-play disabled."
Even in the last year, the industry has come a long way on the VOD advertising front, Viamedia chief operating officer Joe Noonan said. "We're talking about data in a way we haven't before, we're talking about Nielsen, online impressions as a comparison," he said. "We're buying tools to allow us to pitch a multimedia platform -- that didn't exist last year."
The panel, "Is On-Demand Advertising Ready for Primetime?" was moderated by Broadcasting & Cable business editor Jon Lafayette.