Rating VOD’s Audience

Oct 6, 2003  •  Post A Comment

In a development critical to the growth of the video-on-demand business, leading VOD services supplier SeaChange has partnered with Nielsen Media Research to provide ratings of on-demand audiences.
The deal, announced Sept. 29, is a milestone toward the mainstreaming of VOD and one of the necessary steps to push VOD to the next level.
“This is intended to provide ratings data, much as you would for any TV show,” said James Kelso, VP and general manager, broadband systems, SeaChange International. “We want advertisers and programmers to be comfortable with VOD so they can take better advantage of it.”
Accurate and standardized reporting of VOD usage is integral to selling ads in VOD, and advertising is the next logical step in VOD evolution.
SeaChange powers VOD service in more than 100 cable systems in North America, and those systems are now capable of providing data that Nielsen certifies, approves and translates into traditional TV ratings. SeaChange formats the usage data it collects and Nielsen renders that information into ratings.
This data should allow for advertising options such as more targeted ad insertions and VOD tier sponsorship. “As you go forward and VOD takes a bigger and bigger role in how TV is consumed, you would expect very accurate consumption reports,” Mr. Kelso said.
Ratings data has been the missing link in the VOD business, Mr. Kelso said. Ratings for VOD will enable agencies and advertisers to know exactly what they are getting when they buy ads in VOD, he said.
That data includes demographic information on who watched which program and for how long. It also tells how long an ad was watched and whether the ad was fast-forwarded or rewound. The data is not identifiable by viewer, Mr. Kelso said.
About 12 million homes have access to VOD, he said. Time Warner Cable offers VOD to nearly all its homes, and Comcast will provide the service to 50 percent of its customers by the end of the year.
SeaChange’s initiative is important since ratings have been a goal of many industry groups, such as the Cable and Telecommunications Association for Marketing’s On-Demand Consortium and the Interactive Television Alliance. SeaChange has been involved in both efforts.
One of the purposes of CTAM’s On-Demand Consortium has been to devise standards for reporting VOD data that can be extracted from the VOD servers, said Bob Davis, managing director at Dove Consulting, who formed the consortium. Standards on buy rates, usage patterns and demographics, for instance, will accelerate the growth of the industry, he said. The partnership between SeaChange and Nielsen dovetails nicely with the work the consortium has been doing, he said. He added that the consortium’s cable operator partners recently agreed on 14 guidelines for VOD usage.
Mr. Kelso said SeaChange’s format for reporting ratings will be available for other equipment makers to use and adopt.
SeaChange competitors Ncube and Concurrent are in talks with Nielsen about the possibility of providing ratings to cable operators if they request that data.
SeaChange’s effort will work best if it becomes a national system with all players on board, from equipment makers to advertising agencies to the Cable Advertising Bureau to the Interactive Advertising Bureau, said Ben Mendelson, president of the Interactive Television Alliance.
If programmers are going to make money from free VOD services, it is beneficial to have an objective estimate of how many people are using VOD and how frequently, said Bruce Leichtman, analyst with Leichtman Research Group. “This will help to better establish the value of a targeted advertisement,” he said.
The measurement of on-demand advertising and programming has been the hot topic in the on-demand industry for the past year, and Nielsen is the “gold standard,” said Raj Amin, VP, business development, at N2 Broadband, which provides infrastructure software and services for cable operators delivering VOD services. On-demand ratings and measurement must be based on a shared standard, he said. “If we don’t agree, it’s not going to fly, because the ad industry wants a single report,” he added.
In other VOD news, N2 announced last week it has partnered with interactive TV company ICTV to develop a richer, deeper and easier-to-use VOD interface for N2’s OpenStream product, a VOD solution that allows operators to mix components from different vendors.
N2 expects to test a version of the interface this year, with commercial availability slated for early next year.