CTAM Summit 05: Study Says Cable Nets Embracing Broadband

Jul 25, 2005  •  Post A Comment

In just a little more than a year, the number of top 75 cable networks offering broadband video on their Web sites has risen to 91 percent from slightly more than half.

That’s the top-line finding in a study that Broadband Directions, a market intelligence and consulting firm, plans to release at this week’s CTAM Summit.

The study is one of the first to analyze what cable networks offer in the form of broadband video. Its release is particularly timely given the near weekly flow of announcements regarding new broadband plans from cable networks. In the last month alone Nickelodeon and VH1 introduced broadband services that deliver full-length series online, while MTV said it plans to create broadband companion programs for its reality shows.

The study found that of the top 75 basic cable networks, 68 now offer broadband video. Also, all of the top 40 basic networks have video on their Web sites, said Will Richmond, president and founder of Broadband Directions and the author of the study, which will be available at no charge at www.broadbanddirections.com.

“The last 12 to 18 months has been marked by a significant amount of movement in this area,” Mr. Richmond said. Of the networks that offer video, about 53 percent offer it for promotional purposes, while the other 47 percent use video to generate revenue. That means the video is either ad-supported, subscription or tied to commerce, as is the case with HSN or QVC. Ad supported is the most common business model for video on cable networks.

The broadband trend is important to follow because online video gives cable networks the opportunity to reach consumers directly without a third-party distributor.

“They no longer have to have a distribution relationship with a [multiple system operator] or a satellite provider in order to get their video into the home,” Mr. Richmond said.

He predicts networks will produce more of every type of content for their Web sites. Cable programmers also have several advantages in the video space: well-known brands, subject matter expertise, audiences, huge video libraries, relationships with advertisers and relationships with cable operators who are also broadband Internet service providers, he said.

The study found that of the 36 networks that offer promotional video, only four networks offer video tied to current episodes, while the rest offer clips from past episodes, outtakes or additional material.

Of the networks that use broadband video to generate revenue, 81 percent rely on advertising and 13 percent on subscriptions.