NEW YORK (AdAge.com) -- Will couch potatoes give up their ability to skip ads if they can watch a program at a time of their own choosing? ABC is making its best-known programs available to media distributors who can promise exactly that, prompting a hot debate over whether advertisers should follow.
Watch 'Grey's Anatomy' When You Want, Just Don't Skip Ads
ABC Expands Distribution of Video-on-Demand Shows Beyond Cox Deal
The Walt Disney network said yesterday it would increase the availability of its programming via video on demand -- so long as the parties who want to distribute programs such as "Grey's Anatomy" and "Ugly Betty" would disable a viewer's ability to fast-forward through the commercials. The network is following up on a trial it unveiled in May in which select ABC prime-time series and ESPN on ABC college-football events were made available to subscribers of Cox Communications' Orange County, Calif., cable system via video on demand. In exchange, Cox had to disable the technology that allowed its subscribers in that area to fast-forward past commercials.
Taking away toys?
The move is certain to spark additional consumer interest in video-on-demand technology, which already makes movies and cable-network programming available to digital-cable subscribers. Time Warner Cable has also experimented with concepts, known as "Start Over" and "Look Back," that let viewers watch programs at their convenience in exchange for watching ads. Whether cable subscribers will appreciate having their ability to fast-forward past commercials blocked when they often pay an additional fee for the service remains to be seen.
"Once you give consumers the toys, you really shouldn't take them away," said Jen Soch, vice president-activation director, advanced TV, at Publicis Groupe's MediaVest. "I'm afraid I wouldn't want to be the one that aggravates a consumer when they are used to TiVo and are using that to fast forward."
Others feel that video-on-demand content is bound to grow, and viewers will sacrifice control for convenience. "People will really value the time-shifting much more than the ad avoidance," said Brian Wieser, senior VP-director of industry analysis at Interpublic Group's Magna Global.
Initial research on the Cox trial showed that 93% of people who had their fast-forwarding capabilities removed when watching ABC programs on-demand found having to watch ads an acceptable exchange for getting to see the programs free, ABC said. About 20% of users said they used on-demand to watch an ABC program rather than using a DVR.
While the testing has been in place for months, ABC said yesterday it had struck a pact with its affiliates that allows them to insert a 30-second ad within each half-hour of programming where ABC is available via VOD. The agreement lifts previous restrictions the network had on repurposing its content, so that it will be able to expand its ability to make programs available via on-demand through cable, satellite and telecommunications distributors, with the disabled fast-forwarding as a key part of the deal. ABC said the deal would allow for "expanded opportunities to repurpose network programming at any time through this VOD arrangement, as well as through download services, including iTunes and Xbox, with whom ABC has current distribution deals."
The DVR and VOD aren't going away any time soon. According to Magna Global, about 42.9 million households will subscribe to a DVR by the end of 2012, representing about 36.5% of TV households, while VOD will reach about 62.8 million households over the same time period, representing about 53.5% of TV households.
Several marketing executives suggest a better model for VOD would include running fewer ads than one might encounter when watching a TV show at its scheduled time. ABC said it expected to run between five and 10 30-second ads an hour, or 2.5 to five minutes, "significantly less" than the normal broadcast "load." A network spokeswoman said ABC was "still experimenting with what is the right balance for the consumer." Research conducted during the Cox trial mirrors findings ABC has found from monitoring how viewers use its broadband-video player, where consumers can't skip ads but accept them because of ease of use and a desire to watch big-name shows at a time of their own choosing.
Media experts remain skeptical. For ads to remain memorable and welcome in VOD programming, the number must be kept down, said Jeff Minsky, who oversees emerging media for Omnicom Media Group Digital. "I don't think consumers have a problem if it's a 30-second spot, then content, then a 30- second spot, as long as it's not too interruptive," he said. "If it's anything more than that, and they are not able to fast forward, then I think you will have a lot of people trying it out, and very few people who will come back." The deal to add an affiliate's 30-second spot could add more clutter, Mr. Minsky suggested.
Even though viewers are content to watch TV shows on their computer screens with limited ads -- a similar scenario to the VOD set up people envision -- it's not clear they will go for that experience on their big TV screens in a more passive experience. "It's a behavioral issue. If you become used to using that DVR, it's very hard to wean you off and say, 'That content is there, just go and get it,'" said Jason Maltby, president and co-executive director of broadcast at WPP Group's MindShare. "We're all looking for ways to get around commercial avoidance. The heart of the question is what's in it for the consumer?"