TV Upfront

Nat Geo, other nets jump headfirst in video stream

Was it just a year ago that TV's online offerings caught on? Now Web, mobile are crucial

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A river runs through the upfront this year. Make that a stream-a video stream. It's hard to find a broadcast or cable network out there that hasn't added more new-media opportunities since last year's upfront market, as major online portals provide more video elements in their pitches to Madison Avenue.

By and large, portals like AOL.com, Yahoo.com and Google.com have chosen not to play an active role in the upfront negotiating process this year. "We think that in many ways the upfront is an antiquated model," says Patrick Keane, director of sales strategy at Google. "We think advertising and ad strategy need to be more fluid."

Regardless, portals see big business in video streaming, and that competitive positioning is sure to affect the upfront proceedings. For example, Michael Barrett, exec VP-sales and partnerships at AOL Media Networks, reports that 90% of the presentations his group did earlier this year were on AOL's video offerings, including 11 broadband networks.

On the plus side for TV brands, some content on the big portals includes TV programmer content. For example, AOL includes content from two Time Warner corporate siblings, Turner Broadcasting System and Warner Bros.

On the negative side: The major portals have an extremely large consumer base. "We reach 430 million unique users" per month, notes Wenda Harris Millard, chief sales officer at Yahoo.

For a young, niche service like National Geographic Channel, now in 58 million households, such figures might sound daunting. But the cable network's sales crew is counting on a time-tested brand name to counteract the big-portal allure.

digital diet

National Geographic Channel is adding new digital options this upfront, including broadband video on its Web site-archival video footage as well as microsites tied to tent-pole shows like the ongoing "Incredible Earth" specials. "Advertisers want to reach people in every available touchpoint," says Richard Goldfarb, senior VP-media sales at Nat Geo.

Charlie Rutman, CEO of MPG North America, New York, indicates that view is dead on. He estimates that clients could shift 5%-20% of their dollars away from traditional media to new-media opportunities this year.

"I don't see a seismic shift but a slow incremental shift for a couple of very specific reasons," Mr. Rutman says, noting the ability of online media to "deeply involve" their users and "a feeling that the ability of consumers to avoid commercial messaging is growing and growing."

ESPN is among the networks that intend to capitalize on the shift. Ed Erhardt, president-customer marketing and sales at ESPN/ABC Sports, says he expects a 20%-25% increase in the volume of multiplatform deals for his network this upfront from last year.

At ESPN, those platforms range from established media like its magazine and radio broadcasts to original content via broadband streaming and its very own cellphone service. The package will be very important as ESPN markets its new hot property: "Monday Night Football."

Jon Nesvig, president-ad sales at Fox Broadcasting Co., has an even more aggressive prediction. He expects that as much as half of his company's upfront sales will involve alternative media. Fox's offerings range across several emerging-media platforms, including mobile phone content, the "American Idol" site and the MySpace social networking site.

The Web content couldn't be more important. Online "is on fire," says Greg D'Alba, chief operating officer-sales and marketing at CNN. "It's traveling at the speed of light."

AGGRESSIVE BUYERS

"Even with our growth of inventory, the demand [for broadband video] is outpacing availability," Mr. D'Alba says. He expects buyers to be very aggressive in snapping up digital opportunities during the upfront because the supply may be very limited later during scatter.

During last year's upfront, 80% of CNN's deals were TV-Web integrated, Mr. D'Alba says. This year, he'll be throwing out a few juicy stats for advertisers to consider. For example, he says CNN has 22 million unique visitors to its site and 62 million page views on wireless devices.

Other networks are certainly doing their best to increase the online supply. Late last month, Cartoon Network and VIZ Media joined forces to create Toonami Jetstream, which in July will start streaming episodes of anime. Sci Fi Channel launches its Pulse broadband channel today.

NBC had no Web content that was entirely original during last year's upfront. Now "all the shows we own will have a digital component," says Jeff Zucker, CEO of the NBC Universal Television Group. " 'The Office' is a great example of that. It has original Webisodes that can only be seen online. All shows have similar components."

Court TV will offer advertisers positions on three Web sites in addition to its cable channel-courttv.com, crimelibrary. com and smokinggun. com.

Two of the cable net's sites, smokinggun.com and courttv.com, are premiering broadband video availabilities this upfront, says Art Bell, president-chief operating officer of the channel.

National Geographic's popular "Dog Whisperer" includes links to show star Cesar Millan's blog and video streams for the pet-challenged. Sponsors include Purina and Petco as Mr. Millan helps pet owners via his "Power of the Pack" program.

In the opinion of Tracey Scheppach, VP-video innovation director at Starcom USA, Chicago, one of the more compelling new offerings this upfront comes from what might be thought of as an unlikely player: Music Choice, which has made a business of supplying cable operators with audio music channels. Now, it's available as an on-demand service in about 13 million households, allowing consumers to select music videos or certain original video content interactively. And it comes with a variety of advertiser opportunities.

"We didn't make a major push to participate in the upfront last year because the product was so new," says Matt Turner, senior director-ad sales at Music Choice. He says that service attracts more video-on-demand views than any other service out there-averaging 30 million views a month.

At least two of the big broadcast networks are approaching the upfront by reaching out to the advertisers themselves to find out what opportunities they want to construct before the networks devise their propositions.

CBS can bank on the successes it's already had marrying Internet and on-air opportunities with shows like "The Courier," a microseries that ran in commercial breaks during some prime-time shows earlier this year and also turned up online, as well as CBS' on-demand March Madness basketball telecasts. Pontiac introduced the new Torrent in this online/TV buy.

Recently, CBS announced new mobile advertising opportunities, but "we're basically speaking to clients and agencies about where they want to be in the emerging-media space," says Jo Ann Ross, president of CBS TV Network Sales. "We don't have turnkey plans that we're going out with."

ABC is also turning to advertisers for solutions but in a different way. "We're asking advertisers to come up with [new ideas about] what the advertising should look like on the Internet, not just repurposing 30-second spots," says Albert Cheng, exec VP-digital media for Disney-ABC Television Group.

SELL AIRTIME WHILE YOU CAN

Certain advertisers could give them an earful. Peter Weedfald, senior VP-sales and marketing for Samsung Electronics, is among those advertisers that eschew TV opportunities altogether, in favor of placing home page banners on 580 sites. His message to networks: "Sell more TV space while you can, because eventually someone is going to wake up."

In Mr. Weedfald's opinion, TV just isn't a cost-efficient way to spread a message, and that will sink into the minds of more advertisers as time goes by.

However, "there's still a strong hesitancy by advertisers to completely abandon television," says Michael Kelley, an entertainment and media advisory partner at PricewaterhouseCoopers.

His company's research reveals that buyers are spending a larger percentage of time trying to understand new media than a percentage of actual dollars. "But at some point there will be a tipping point where the time turns into action," Mr. Kelley says.

Clearly, the networks are readying themselves for that point in time.

"Right now, over 90% of viewing is still linear," notes Fox's Mr. Nesvig. "We have to live for today at the same time we live in the future. That's the challenge."
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