A ‘TiVo-Proof’ Ad Model

Mar 29, 2004  •  Post A Comment

Touting itself as the first ad-supported on-demand network, RipeTV plans to debut later this year to 10 million on-demand and broadband homes.
The multipronged platform is designed to be a fresh paradigm for television that recognizes and embraces the impact that on-demand and time-shifted viewing have had on TV habits.
Los Angeles-based Ripe embeds “immersive advertisements” into the programming itself so they can’t be fast-forwarded through or skipped but rather become a part of the show’s packaging. The patent-pending technology renders the shows “TiVo-proof,” said Ryan Magnussen, RipeTV CEO.
The first RipeTV network, to be launched in the fourth quarter, will target men 18 to 34, since that demographic tends to be early adopters and heavy Web, wireless and text message users, RipeTV President Patrick Bradley said. The content will include video magazines, reality shows, extreme sports and entertainment reviews. New episodes for each show will debut online and on-demand every Monday, a la the traditional model TV has followed for decades in introducing new episodes each week. Mr. Bradley said.
The newfangled ads, with a spin on old and new ad traditions, include a 3-D animated advertiser logo or graphic to open and close the show, an animated logo occupying the lower third of the screen, a “video skin” or graphic frame with the advertiser’s brand framed around the show, video billboards in the lower third, strategically placed spots and long-form commercials.
With more viewers “TiVo-ing” their content, the 30-second commercial will become increasingly difficult to justify, said Adi Kishore, a video-on-demand analyst with The Yankee Group. “I’m generally in favor of any kind of experimentation in this space,” he said. “But you have to be really careful not to be intrusive with the ads.”
RipeTV said consumers in focus groups that it conducted did not find the ads disruptive.
For instance, during a broadcast of “World’s Sexiest,” a show that is planned to feature beautiful women, a banner with the sponsor’s graphics might pop up with the message, “It’s going to get really hot now; why don’t you pause and go get a Heineken.”
This type of advertising is Ripe’s answer to the ad-skipping conundrum that with the skyrocketing popularity of DVRs has worried advertisers and programmers.
Rise in DVRs
By 2007 about 24.7 million DVRs will be in use, according to The Yankee Group. Since anywhere from 60 to 80 percent of TiVo content is viewed in a time-shifting fashion, programmers have been scrambling for new solutions to keep viewers interested in commercials. Ideas have included downloading compelling advertising to the digital video recorder, increasing the interactivity in commercials and allowing for two-screen interactivity between the TV and the PC.
Cable operators have been experimenting with ad-supported on-demand and with advertainment, along the lines of Cox’s Free Zone, to support the on-demand business. Also, content providers such as ESPN and Scripps have made available exclusive content to their on-demand and broadband platforms.
The notion of convergence between the TV and the PC is a core component of RipeTV. All of the RipeTV content exists both on the VOD platform and on broadband.
“Depending on what environment you are in, you might choose to have your entertainment over the PC or the TV,” Mr. Magnussen said. “On the broadband side, because you have a lot more interaction on the Internet there will be voting, polling, collections of data that influence the programming.” On the Internet, viewers could vote on their favorite shows and those in turn would be the ones that appear on Ripe’s two platforms, he said.
Approaching MSOs
RipeTV’s founders are just beginning to peddle their new model to multiple system operators and advertisers. But Mr. Magnussen said RipeTV has three output deals exclusive to the RipeTV platform and access to 400 hours of other content, such as DVDs and short animation. He would not elaborate on the content partners. He is hopeful that the shows will attract about 300,000 to 400,000 viewers for each, making the prospect of advertising attractive.
The content-10 hours per month-will be tailored for the on-demand platform at about 8 to 12 minutes each. “It is really programmed for instant gratification,” he said.
A range of content, such as short films and behind-the-scenes material, is appropriate for such an on-demand platform, Mr. Bradley said.
Mr. Magnussen and Mr. Bradley built the Web services company Zentropy, which became a $100 million-a-year firm and was sold to Interpublic Group of Companies in 1999.