Is A-B Canning Bud.TV?

Brewer's CEO Says Online Network May 'Fade' in Coming Months

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CHICAGO ( -- Anheuser-Busch Cos. CEO August Busch IV today said the No. 1 brewer expects its pioneering online television network to "fade" during the second half of the year.

After an auspicious launch this February, Bud.TV is set to "fade," if not disappear altogether, later this year.

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Mr. Busch also said he expected content from Bud.TV to be used on other A-B branded websites, leaving several analysts listening in on a conference call to conclude that the reported $30 million to $40 million site would be left for dead -- if not completely shut down. Mr. Busch, however, did not say that outright.

'Continue to develop'
A statement from A-B VP-Global Media Tony Ponturo -- made after an inquiry to A-B seeking an explanation of Mr. Busch's comments -- did little to resolve the confusion: "Anheuser-Busch believes in the digital space, and Bud.TV is a part of that. Bud.TV is the first of its kind and it will continue to develop. Its current structure might fade away as we learn more about consumer connectivity and building a social network. But we are eager to evolve Bud.TV as part of a broader digital future for our brands to reach today's consumer."

Mr. Busch's comments -- made during a presentation for investors today -- come as Bud.TV's audience is in free fall. A-B executives said before the site's February launch that they hoped to draw 2 million to 3 million unique monthly visitors to the site -- considered the first marketer-created, multichannel online television network -- within a year.

But after the site drew 253,000 and 152,000 unique visitors in February and March, respectively, A-B lowered its sights to a new goal of 500,000 unique monthly visitors by next February.

But even that number looked too ambitious after the site's viewership fell so far in April that it didn't even register on Comscore Media Metrix's survey. (A ComScore spokesman said that it was "fair" to assume that the audience had fallen below 100,000 unique visitors for the month.)

Stringent age verification
A-B executives, including Mr. Busch today, have blamed some of the site's problems on its relatively exhaustive age-verification measures, which are intended to keep underage drinkers off the site. Most beer sites simply ask viewers their age, but Bud.TV checks the information against a database of state-issued identification.

While A-B said the age-verification measures kept some legal-age drinkers from registering, a group of state attorneys general said it wasn't stringent enough, arguing that, as a content purveyor, A-B's burden to avoid marketing to youth was greater than that of a mere advertiser.

Of course, the falling audience totals suggest that even viewers who've cleared the age-verification hurdles aren't impressed enough with the mix of comedic shorts, drama serials and reality and sports programs to keep coming back.

The overall picture for A-B, however, was sunnier. The brewer announced it would post a larger-than-expected profit this year and also that May beer sales were strong, news that sent its stock up nearly 3% today.
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