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4As Hears Comcast Chief's Report From the New Frontier

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NEW ORLEANS ( -- Driven by keynote remarks from Comcast Corp.'s CEO, the most persistent buzz at the American Association of Advertising Agencies Media Conference is about video-on-demand (VOD) and its impact on the media and marketing landscape.
Photo: Wayne Catalano
Comcast CEO Brian Roberts was the keynote speaker at the 4As Media Conference.

With 21.5 million subscribers, Comcast is the nation's largest cable TV company as well as a pioneering player in the business of turning TV sets into video library machines, enabling consumers to watch anything they want anytime they want. And the talk among the 1,200-plus attendees at the Hilton New Orleans Riverside conference center focused on the fact that VOD, in the end, may be far more transformational than TiVo.

'Profound implications'
Comcast's CEO, Brian Roberts, opened the event by saying it was his "first 4As convention, but I know it won’t be my last." He explained VOD's emergence as an outgrowth of convergence -- a term, he noted, almost considered a dirty word by some. "It has been a long time coming. But now there's no doubt that the capabilities of the TV and the PC are becoming fully integrated. And that has profound implications for all of our business," he said in a speech to a standing-room only crowd.

Huge leaps forward in the computer chip's processing power, coupled with improvements in content storage capacity, Mr. Roberts said, meant that Comcast and others can "really cater to the individual wants of viewers."

Comcast now offers on-demand services to more than 17 million customers. Most of its on-demand programming is free. The company estimates on-demand views for February at more than 80 million, and projects that in 2005 its customers will view on-demand programming more than 1 billion times. Comcast's goal, Mr. Roberts said, is to redefine itself as a "new products company" that will offer a range of programming, from movies to special programming such as its "NFL Replay," introduced last fall.

Marketing potential
As profound as the impact of VOD is for viewers, the potential for marketers, and their advertising agency partners, is equally tremendous. But capitalizing on it will not be easy.

Mr. Roberts at times during his talk took on an air of evangelism and sympathetic encouragement toward his new media agency and marketing partners. "We’re not afraid of change and we’re not afraid to change," he said. "We want to be a great partner to you."

Indicating Comcast's commitment to working with marketers, Mr. Roberts announced a new partnership with measurement firm Rentrak Corp. in which Comcast will begin to make monthly on-demand reports available free to programmers and advertisers. Reports will cover four standardized metrics: the number of VOD-enabled set-top boxes in a designated market; total views by program per month; the number of unique set-top boxes viewing a program by month; and the total minutes viewed by month.

Following Mr. Roberts' speech, panelists, led by MediaVest USA's Adam Gerber, the media agency's senior vice president and group director for strategy and innovation, discussed VOD's promises -- improved targeting and the ability to garner a higher percentage of a desired demographic -- as well as some of its perils.

New kinds of media buys
Exclusivity of a media buy is one of the concerns, said David Coffey, vice president and director of PHDiQ, a unit of Omnicom. For instance, if an Academy Awards broadcast that was sponsored by advertiser A is archived for VOD use, does advertiser A continue as the sponsor after a consumer selects to view the show on VOD? How should such a media buy be priced? Another unresolved area, said Mark McLaughlin, group category development officer of Yahoo, is how to price so-called legacy content, such as a movie classic like On the Waterfront.

"When Marlon Brando died, many consumers would have paid to see a clip," he said. "If we are smart about legacy content, it could be enormously valuable if we can get past [content] ownership issues and develop ad models."

Understanding how to exploit VOD is largely virgin territory to creative directors. Responses from a group of creatives, all participants on a panel discussing broadening the communications platform on whether they've thought of ways to exploit VOD, yielded little.

Rick Boyko, managing director and professor at the VCU AdCenter, said his students "don’t understand it. It is really in its infancy." Another respondent, Jonthon Hoffman, executive creative director of Leo Burnett USA, answered with an anecdote about voice on demand, rather than video on demand.

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