This week, attendees and panelists at the Cable & Telecommunications Association for Marketing (CTAM) Summit in Washington will be grappling with the best monetization models for cable networks as they move from the TV screen to the computer and mobile screens.
Attracting online eyeballs
If cannibalization of the linear product was a main fear last year that proved to be irrational, the goal for networks this year is to entice the 81 million people who watched broadband video in March 2007 to spend equal time online at cable websites. For the current season Nielsen Media Research estimates that 247 million people over the age of 2 have access to cable programs -- whether through wired cable, satellite or other alternate delivery systems. But each cable channel only manages to get a slice of those viewers to sell to marketers. So cable networks want to deliver more of those viewers to advertisers by getting more online eyeballs to surf over to their websites.
More cable networks are slowly starting to take their shows online (Lifetime and A&E started offering streams of their most popular shows this summer; ABC Family has had a fully functioning broadband player in place since last summer), just as researchers like Nielsen and the CTAM board are finding that the viewing isn't nearly as divided as some had feared in a recent study.
"Viewers are telling us very explicitly they don't go to online as a substitute for linear TV viewing," said Tim Brooks, former CTAM board chairman and exec VP-research for Lifetime. "It's an augmentation of [linear] viewing, not a replacement." And the study even showed consumers' openness to ads in the online format. "They want fewer non-skippable commercials that don't interrupt the viewing experience, but they're accepting of advertising," Mr. Brooks said.
Not just a website
The real value proposition for marketers is keeping target audiences engaged beyond the 15-second pre-roll. Just ask Jeff Meyer. The senior VP-interactive sales for Scripps Networks has helped turn the home pages for its networks such as HGTV and Food Network into fully branded lifestyle portals. His new boss, Deanna Brown, a former Yahoo exec, has also started to pitch in, acquiring blog site Recipezaar for FoodNetwork.com last week.
Although the individual Scripps networks have proved to be more directly aligned to driving retail sales with their endemic advertisers, Mr. Meyer said he has still been fairly conservative when it comes to trying too many things too fast. He called the first version of a virtual kitchen sponsored by Kohler for HGTV.com, for example, "a bomb. It was just way too complicated. The capabilities were fantastic, but what we got caught up in was the idea that users were really going to take the time to understand how to use all of them."
The virtual kitchen has since become a more functional success, as have similar sponsored features such as "Rate My Space" and the "I Want That!" marketplace with more than 800,000 products.
Getting cable viewers to follow both a show and a brand online is the holy grail many digital buyers are currently seeking for their clients.
Completing the experience
"Consumers still look to TV to help them inform about media consumption choices," said Jordan Bitterman, VP-media for Digitas. "Even though people are increasingly spending more and more of their time consuming content online, the experiences they're having aren't necessarily shared unless they go online to talk about it. It's a real boost in credibility for a brand to be a qualitative part of the online experience."
"Any successful program for an advertiser is going to happen in an environment with its own use of the web on behalf of what a cable network provides," said Eric Bader, senior VP-digital connections at MediaVest. "The only weakness in cable is a lot of networks are aggregators and not really programmers -- a lot of their schedules are made up of re-runs."