|ABC President-sales and marketing Mike Shaw said the iTunes deal to distribute primetime shows 'shook up' the sales side.
The move follows Disney’s groundbreaking deal last year with Apple to make its most popular shows available via Apple's iTunes Music Store for $1.99. But this time the advertising community won’t be cut out of the equation.
“We are looking at the technology and how many shows we could do. With repurposing we have to do it with the right product,” he said after speaking on a panel at yesterday's Digital Hollywood conference at the McGraw-Hill conference center in Manhattan. ABC has to be sure its network affiliates are OK with the broadband offering, but Mr. Shaw said that once details were finalized the network would start talking to a number of select media agencies.
VOD ad insertion
“We are very interested in growing secondary or tertiary revenue. But we can only repurpose 25% of our schedule, or six hours.” Potential video-on-demand distribution could mean ABC would alter where and when ads would be inserted to accommodate, say, five 60-second spots as opposed to the way ads appear on TV now. “We have to decide what the new coin of the realm would be,” he said. ABC would be willing to work with advertisers to commission joint research on how to move forward in new distribution areas.
The decision to boost ABC.com’s broadband offering comes on the heels of similar moves by CBS, which said last week that CBS.com would offer reality show “Survivor” for $1.99 a download. CBS has also said that it would offer ad sponsorships. Just how big a revenue generator broadband TV will become is yet to be determined. One media analyst, speaking to Ad Age this week, suggested broadband was mostly offered to advertisers for free as part of prime-time TV package deals. That might change as viewers show more interest in watching programming on their laptops, PC’s or mobile devices.
Disney’s surprise Apple deal last October also caught the sales side off guard. “It shook up the sales organization,” Mr. Shaw said. “You had great content moving to a place where there wasn’t any advertising.” He said that Apple CEO Steve Jobs had refused to change the iTunes business model to allow for advertising.
Tussling with Nielsen
Separately, Mr. Shaw is in the midst of a heated debate with media agencies over compensation models now that Nielsen Media Research is offering data on digital video recorder playback and including new viewers. Speaking as part of the panel discussion, Mr. Shaw wondered why, if someone watches a show eight days after it first aired, they wouldn’t be counted by Nielsen, which only is counting playback up to seven days after a show's initial broadcast. “The game has been shifted on us,” Mr. Shaw said.
Tim Spengler, exec VP-director national broadcast at media agency Initiative, countered, “With customers who have time-sensitive information the value [of the playback] is nil.”
Another panelist at the event, Pam Zucker, senior VP-marketplace ignition, MediaVest USA, said that media agencies and the broadcast networks were avoiding issues that needed to be discussed. “We are in dire need of new business models,” she said. Ms. Zucker hoped that the launch of the CW network -- a merger of Viacom's UPN and Time Warner's WB -- would herald new kinds of partnerships between agencies and the networks.