Polishing the Product

May 2, 2005  •  Post A Comment

Determined not to play the part of a lame duck, Adelphia has big plans to spruce up its video-on-demand service over the next year for the company’s new owners-Time Warner and Comcast.

Late last month Adelphia began pitching advertisers on the prospect of long-form ad content on VOD, free to consumers, which it will add in late May.

Adelphia also plans to expand its VOD service from the 1 million subscribers who have access to it today to about 1.5 million by the end of the year.

Adelphia did not disclose the specific terms of its deal with Comcast and Time Warner and whether it’s required to deploy VOD in a certain number of markets. However, it has an obligation to turn over the company in good working order.

“We’re selling assets to Time Warner and Comcast and they have an expectation that the assets be delivered in top shape,” Adelphia spokeswoman Erica Stull said.

The new product offering, Ad Index, also serves as a harbinger of positive business in on-demand advertising in general.

The content will be included in a new VOD category that’s a home for long-form advertisements ranging from three minutes to an hour. The service is similar to that offered on VOD platforms by Cox FreeZone, Comcast Spotlight and Charter’s iWant More. Cox FreeZone was the first such platform for long-form content and has attracted Coca-Cola, Kraft and Tourism Australia. Operators sell long-form advertising opportunities directly to marketers, whereas cable programmers, such as Discovery or CNN, also sell VOD ad time, but inside their on-demand programming.

Looking Good

“We’ve got to build the assets for [the new owners],” said Tom Straszewski, director of new product sales for Adelphia Media Services.

Many advertisers view VOD as an experimental playground for messaging. “This is an environment and space that gives complete control to the viewer, and it’s an engaged viewer rather than [someone] relying on appointment viewing,” Mr. Straszewski said. “Mass marketing is also struggling at this point, and clients and agencies are becoming cognizant that there is waste with mass marketing. What VOD offers is a targeted approach, especially with interactive TV.”

Adelphia likely will offer advertisers a number of ways to engage consumers through the on-demand platform. First, the operator can run long-form branded content, such as a movie trailer or an in-depth spot for a new car. In addition, Adelphia can make traditional commercials on linear networks interactive, letting a viewer click on a 30-second spot to be transported to a long-form piece of content that resides in the VOD service. Companies such as GoldPocket and Navic power such forms of interactivity.

Adelphia hasn’t yet inked any deals with advertisers since the ad offering has been on the market for only a few weeks, but Mr. Straszewski said he’s particularly keen on targeting the travel industry to produce long-form ads about various destinations. He’s also going after real estate, movie studios and the do-it-yourself market.

Adelphia is pitching national advertisers first because they are more likely to have or develop such content. However, Mr. Straszewski envisions some opportunities for locally sponsored content, like a behind-the-scenes piece on one of Los Angeles’ professional sports teams for which Adelphia could sell sponsorships.

Los Angeles is Adelphia’s biggest market, with about 400,000 VOD-enabled homes. Other Adelphia VOD markets are Cleveland, Buffalo, N.Y., and West Palm Beach, Fla.

Given that it’s late to the game, Adelphia is sweetening its offer to advertisers with the prospect of custom research on VOD viewing. It will offer additional measurement data beyond the information most programmers and multiple system operators supply advertisers today, such as total views per show and share of the set-top box universe. The additional data points will be tailored to specific campaigns.

Welcome Changes

Advertisers like that idea. “If we can have one or two more pieces of data, that would be good,” said Mitch Oscar, executive VP of Carat Digital, who has talked with Adelphia about placing some Carat clients in Adelphia’s VOD platform. “They are deploying aggressively, pricing is reasonable and they have learned from other operators. They are offering [advertisers] another opportunity.”

Adelphia also has a raft of research and data options at its disposal. VOD data is now available that offers a more granular understanding of VOD viewing, such as how many viewers saw a VOD promotion and then watched the content, said Frank Foster, president and CEO of erinMedia, which measures set-top box data. Adelphia is talking with erinMedia about the type of data it provides.

Mr. Straszewski said coming to market after other operators have whittled an early path can be a good thing, allowing Adelphia to cherry-pick the best of what’s worked and to avoid what hasn’t. Specifically, that means eschewing ads that are more like infomercials. “It’s imperative we have very compelling and entertaining content in VOD space,” he said.

Adelphia customers will be able to find the long-form ads though the main navigation screen for on-demand and also from within related categories, such as fitness or lifestyle.

He expects to offer about 10 hours total per month of VOD ad space.