RELATED: Full-Season On-Demand Builds Audience
Media companies are looking to monetize the increasing amount of delayed viewing of television shows, and Comcast says it has developed a new way to make video-on-demand pay.
Nielsen already counts the commercials seen by people watching shows on-demand within three days of air in its C3 ratings, so most programmers keep the same ad load in their on-demand stream until the fourth day.
Unlike DVRs, seen as a commercial killer, VOD increases commercial viewing, particularly with fast-forward disabled. Since disabling fastforward during playback, commercial ratings are up 15% to 20% in the Comcast footprint.
But imagine this: It’s a Tuesday night and you’re watching the episode of NBC’s The Blacklist that originally aired the night before. Across town, your best friend is also watching The Blacklist on-demand, but it’s an episode from last month. And yet the same current-week ads appear on both screens, creating additional C3 impressions. With 42% of catch-up viewing happening during that C3 window, if you’re in ad sales, that could be a big deal.
Over the summer, Comcast Cable and corporate sibling NBCUniversal ran a test and proved they could not only insert the new ads when subscribers view an older episode of a series on-demand within the newest episode’s C3 window but, working with Nielsen, confirmed that the ads registered in terms of ratings.
Comcast calls the system ODCR, for On Demand Credit, and says it plans more tests with CBS and ABC in the next few weeks. Matt Strauss, the cable operator’s senior VP, general manager for video services, says that if programmers continue to react positively, implementing ODCR could be a priority for next year.
“When we look at the opportunity and how much on-demand consumption is happening during the C3 window, but of prior episodes, we think this could represent up to a 20% lift in C3 viewing,” Strauss says. Not bad for an idea hatched about three years ago in a meeting between Strauss and CBS research guru David Poltrack.
ODCR would also reduce the amount of ad inventory networks have to sell in shows viewed four days or more after they originally aired. The networks are only starting to monetize those, running mostly promos. “This could have a pretty profound implication in the sense that you’re no longer selling a show. You’re selling a series, or you’re selling a block of time,” Strauss says.
With trials showing that this technology is ready for primetime, it’s up to programmers to make deals to enable it, and advertisers to decide how valuable these new viewers are. And of course, it’s the business deals that often hold up the deployment of new ideas.
Pluses for Everybody
CBS’ Poltrack says ODCR is looking like “a new development that has benefits for all parties.” The benefit for advertisers is it expands the reach potential of primetime television. For the network it monetizes audience that is not monetized, so that’s a positive from the point of view of the broadcaster. The MSO gets a new platform that could have significant long-term potential. “So it looks like a win-win-win,” he says.
Because Comcast has fully deployed dynamic ad insertion capabilities, it can make adjustments for individual advertisers that wouldn’t want to be in a prior week’s episode, either because of content issues (an airline might not want to be in an episode featuring a plane crash) or business reasons (the advertiser paid a premium to have an ad promoting an integration in the current episode). “The elegance and the technology of the dynamic ad insertion infrastructure give us the ability to do that,” Strauss says.
Strauss adds the system works whether the industry sticks with C3 or moves to C7—taking in seven days of delayed viewing. In that case, if advertisers accept C7, nearly all VOD viewing during a show’s season could count toward commercial ratings thanks to ODCR.
“We’re not advocating any models,” Strauss says. “Our objective is to provide as many tools to the programmers that allow them to best monetize their content in the way they think achieves their objectives, whether it’s dynamic ad insertion of the C3 ads, whether it’s different ad loads, whether it’s ODCR. We are big believers in collaborating with the industry in a way that helps grow everyone’s business.”
TV catch-up is a growing part of Comcast’s VOD usage, now accounting for about 40% of the total. About half of Comcast’s subscribers now use Xfinity on-demand to watch TV shows.
In March, Comcast ran a “Watchaton,” offering full seasons of dozens of shows for free. VOD usage set records for the company. But Strauss says Comcast is seeing even higher viewer levels now around the fall premiere activity by the networks, up 40% from last year.
That increased usage comes despite the disabled fast-forward button. “We’re seeing customers still watch,” Strauss says. “Customers in our footprint, they’re watching more commercials.”
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