VOD’s Image Problem

Mar 28, 2005  •  Post A Comment

What video-on-demand needs is Google.

That’s the consensus of a broad cross-section of advertising agency executives in a variety of disciplines, from national broadcast to branded entertainment to interactive. They say VOD needs to be searchable for more people to use it.

To get a sense of how the industry’s consumers are using VOD, TelevisionWeek canvassed several advertising agency executives about their VOD experience at home as consumers.

The bottom line: They aren’t using VOD very much, many don’t notice a big distinction between VOD and digital video recorders and nearly all said VOD needs to be much easier to navigate to attract mainstream consumers.

Here’s a snapshot of how the industry’s advertising decision-makers use VOD at home-the good, the bad and the ugly.

Brian Terkelsen, senior VP and director of entertainment marketing at MediaVest, uses Time Warner’s VOD sparingly at his home on Manhattan’s Upper West Side because he owns four DVRs and watches up to six hours of TV each day as part of his job. “I think time shifting is a far more consumer-friendly [application] than VOD because the VOD offerings to date are more pay-per-view,” he said.

Mr. Terkelson said he’d probably use VOD more if the content and the ads were more targeted. “I would watch VOD if in fact I could call up programming that was immensely relevant. If I could go to a Web screen and call up ‘Roseanne Barr’ and get all of the ‘Roseanne’ shows, count me in,” he said. “What if I wanted to watch ‘Mork & Mindy’ because I was watching a retrospective on [the show’s creator] Garry Marshall? What if I wanted everything? Give me Google search on my headend.”

David Verklin, a VOD fan and the CEO of Carat Americas, agreed. “We are not going to figure out the full potential of VOD until we have a search engine for TV,” he said. “I think search is really one of the biggest ideas we can apply to TV. The Internet would be useless without a search engine.”

Mr. Verklin has VOD service from Cablevision at his home in Connecticut and uses it primarily to watch movies-perhaps four a month-or to control access to the content his three children watch. Cablevision offers some ad-supported content, but he’d like more free fare from networks such as Discovery.

That’s not an option for most advertising executives who live in New York or Connecticut and don’t get cable through Comcast, which has the most expansive and robust slate of free and ad-supported on-demand content.

Time Warner offers about 1,500 hours of on-demand content, about 20 percent of which is free. Cablevision offers about 1,400 hours and 400 of those hours are free, including such programming as Mag Rack, SportsKool, Scripps Networks and kids content. Comcast offers about 3,000 hours per month, about 90 percent of which is free.

“It might be the Achilles’ heel to that industry right now,” said Bill McOwen, executive VP national broadcast at media agency MPG in New York and a Time Warner customer. “The decision-makers are living in a locale where [VOD] doesn’t seem to be a public influencer at this time.”

Nevertheless, VOD has incredible potential for the advertising business, he said. If a Nielsen sample were applied to on-demand, advertisers could essentially get direct-response type of data.

“That data could be mined so much more,” Mr. McOwen said. “The consumer has a wonderful opportunity staring [him] in the face. What’s missing is a lot of potential revenue and marketing opportunities that have yet to be properly developed.”

It makes sense for other cable operators to follow the example Comcast has set in offering an array of free content, said Rich Anderson, senior VP and managing director of Universal McCann, who has Cablevision service at his home on Long Island. “I have to imagine the other cable companies … are all going to look to match the Comcast model,” he said.

But the distinction between VOD and DVRs isn’t strong enough yet. Mr. Anderson doesn’t use VOD much since he sets his TiVo to record his favorite shows. “If you are a fan of several shows, you season-pass it on TiVo and already have it or rent or buy the DVD collection,” Mr. Anderson said. When VOD can move past the perception that it’s a TiVo substitute and offer content that can’t be found elsewhere, it will likely become more attractive, executives said.

That would work for Curt Hecht, senior VP and managing director of GM PlanWorks, a business unit of Starcom that handles General Motors. He’s used VOD some in Chicago but will be much more interested when Outdoor Life Network or other content providers offer cycling content on-demand, since he’s a cyclist and a fan.

While choices are growing, time isn’t, said John Rash, senior VP and director of broadcast negotiations at Campbell Mithun in Minneapolis. He lives in an area served by a Comcast system but doesn’t have much time to watch content on-demand, he said.

Other Comcast customers in the business use the service more.

Alan Burgis is the managing director of Agency.com, an interactive agency in San Francisco. He said his 7- and 9-year-old daughters have mastered VOD and will often report to their parents on the number of movies they think look “appropriate” for kids. “For my kids, VOD has already become a way of life for them,” he said. But the navigation is difficult because movies and other content have to be scrolled through alphabetically.

Comcast said it’s working on improving navigation as part of future enhancements to its guide but does not have a timetable. Part of those changes will include ways to search across all types of content, using keywords such as “comedy” or “Cameron Diaz,” whether the content is on a linear channel or VOD or saved on the DVR.