It has become fashionable in the cable industry to talk about how confusing video-on-demand and high-definition television are to consumers, and such consumer confusion was one of the themes of the CTAM conference last week in Boston.
Several cable industry executives outlined plans to dispel some of that confusion, in particular as it relates to VOD. The on-demand user interface is a key way that operators and programmers are banking on disseminating a clearer message about what VOD is. And once a financial model emerges for basic networks’ VOD offerings-which should come within the next year, when VOD usage becomes rated and measured effectively enough to begin selling ads in it-programmers will put more promotional pop behind VOD.
“I’m not surprised the consumer is confused,” said Page Thompson, VP of marketing for new video products at Comcast. “You had one product-digital cable-and now we introduced HD, DVRs, VOD. If any industry has that much change, there is going to be confusion.”
Mr. Thompson is betting that a key first step will be the new user interface from TV Guide known as “i-Guide,” which Comcast plans to start rolling out later this summer to homes equipped with its Motorola set-top box. The new guide should be available to 7 million of Comcast’s digital cable customers by year-end, representing 92 percent of its digital footprint.
The new interface will allow for multiple access points to on-demand content, including a link on a programmer’s linear channel to that programmer’s on-demand content. That seamless connection will change the way consumers think about networks because they will start to look at them as the total package of both linear and on-demand content, Mr. Thompson said. That perception will then broaden consumer awareness and understanding of what VOD is, he said.
Comcast is also pushing basic programmers to make their best series available on-demand, just as HBO has done with its on-demand product, which commands more than half of all VOD usage in Comcast VOD markets.
Of course, many cable programmers are reluctant to make their best fare available when an economic model has not been firmly established for VOD. However, it’s widely expected that an ad-supported model for basic cable network content will emerge over the next year as MSOs begin providing the ratings and usage data about on-demand viewing that programmers need to sell the content to advertisers.
“Once we get better data from the MSOs on the viewing habits of their customers, it will lead to a better opportunity to monetize,” said David Zagin, senior VP of affiliate sales for A&E Television Networks.
Scripps Networks’ Channing Dawson, senior VP of emerging media, is eager to get his hands on such data because promoting VOD content will then be easier. “The MSOs have services they want to sell. We have programming we want to promote. For us to market, we have to have a business to promote,” he said.
As Scripps is able to access VOD measurement data, it will be more apt to put more promotional muscle behind VOD, he said.
On the high-definition side of the new services, ESPN plans to extend its existing relationship with set maker Philips and retailer Best Buy this fall to introduce a promotion that will “demystify” the process of purchasing, installing and setting up HD service, said Bryan Burns, VP of strategic business planning and development for ESPN and head of the network’s HD service.
During a CTAM session on HD marketing, Clint Stinchcomb, senior VP and general manager for Discovery HD Theater and VOD, spoke about the issue of consumer confusion as it relates to HD.
“There is always confusion around new technology,” he said. “If you went back and read what was said about PCs, VCRs and high-speed, there was confusion and the good thing is price will solve a lot of that. … The good thing about the confusion is it dissipates over time.”