Public won’t pay for on-demand content with ads

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Even though CBS and NBC made a big splash with their entry into the video-on-demand arena, both networks are quick to acknowledge the 99¢-per-download deals they made with Comcast and DirecTV, respectively, are more about experimenting than establishing a business model.

CBS's on-demand programs will have national advertising embedded within them, while the NBC deal strips out commercials. That leads advertisers to wonder what the future VOD commercial model will look like. Will it be solely consumer supported without commercials or free to consumers supported by ads? Or a combination of both, as consumers pay for on-demand content that contains commercials? Not likely, said Advertising Age readers polled about the subject-consumers will pay if ads go away.

"It's simply unfair to charge the customer for content and then charge them again with ad impressions," said Nick Senior, an interactive designer at TBC in Baltimore. "Network TV can't get it both ways." Adds Ken Franklin, a senior editor at the Consumers Union: "The only reason moviegoers sit still for the commercials that precede the show is that they've already plunked down their 10 bucks, probably without thinking about that part of the deal. Once they see commercials on a VOD broadcast, they're out of there, ne'er to return."

Some respondents suggested consumers would indeed pay for ad-supported on-demand content, provided they don't have to sit through 16 minutes of ads an hour. "With a pre-roll commercial and a single commercial in each break, yes indeed [consumers would pay]," said Grove Thomas, continuity director at Clear Channel Radio in Billings, Mont. And Jeff Sternberg, exec VP at Fry Hammond Barr, Orlando, thinks consumers would pay if the quality of the creative was better. Americans, he said, should take a lesson from "our agency brethren in Europe. They continue to produce work that makes us forget we're watching commercials."

According to Joel Embry, VP at New Media Worx in Tulsa, Okla., the issue is not black or white. "Sure consumers will pay for on-demand content with commercials," he said "Companies will start underwriting programming ... it is too narrow of a question to answer with a definitive no."

What you say: 65% of voters said consumers won’t be willing to pay for on-demand content that contains commercials. The rest of the respondents, 35%, say there will be a way for networks to collect from both consumer and advertiser.

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