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CTAM Summit 05: VOD Awaits Promo Push

Jul 25, 2005  •  Post A Comment

Comcast is gung-ho on video-on-demand, but some cable programmers don’t share that mentality. That means when it comes to VOD marketing, most basic programmers are holding the purse strings shut even while premium providers surge onward to promote their on-demand programs.

Last year at this time, the dust had settled on the first round of VOD. Operators were rolling out the service, premium and basic programmers were providing content and the technological kinks were ironed out. But a new problem surfaced: Basic programmers needed to monetize their VOD investments. Advertising seemed the way to go, but to lure advertisers, programmers needed information on who was watching VOD and there wasn’t much useful data available.

Fast-forward to today. It’s like a summer repeat: The measurement issue looms just as large as it did heading into last year’s CTAM conference.

That means the single biggest challenge behind marketing VOD is finding a business model to justify the marketing investment for ad-supported networks.

But VOD is not a cookie-cutter business, and while basic networks resist marketing for now, other on-demand programmers such as Universal, HBO and Mag Rack are busily messaging because they’ve got a business model.

According to Kagan Research, VOD should reach 24 million homes by year-end. While that’s a large and growing number, VOD is far from ubiquitous. That makes it tough for a basic network to even promote VOD on the linear counterpart.

“It’s difficult to justify linear networklike marketing to the free VOD space right now,” said Clint Stinchcomb, senior VP and general manager for Discovery HD Theater and Discovery’s VOD product. “The ad sales opportunities are not comparable and won’t be until we have dynamic insertion, more sophisticated data, like demographic info for starters, and a universally endorsed measurement system.”

Like Discovery, Scripps has held back on marketing its VOD service while business models are being crystallized. While movies, movie trailers, sports and kids content fare well in VOD, basic cable content isn’t flying off the charts, said Channing Dawson, senior VP of emerging media at Scripps Networks. Therein lies the Catch-22 because that content isn’t being promoted. In addition, users must navigate a tangle of text-centric, homogenous screens to find the content they want, an environment not conducive to promotional messages.

“We don’t have the branded environments and will not have them for a few years,” Mr. Dawson said.

Scripps does market its on-demand content in e-mail newsletters, on its Web sites-including on-demand-centric sites such as foodnetworkondemand.com-and in the tapes it sends to cable operators. But it’s up to the operator to include that content in its VOD barker video.

Comcast chooses about eight programs and events each month to promote in its VOD messaging in direct mail, bill inserts, its Web site, the VOD barker channel, VOD inserts in TV Guide magazine and via e-mail updates to nearly 2 million customers who have opted to receive the messages, said Page Thompson, Comcast VP and general manager of Comcast’s on demand service. That includes pay movies and the four or five most compelling pieces of free content, which in July included VH1’s Hulk Hogan reality show “Hogan Knows Best,” A&E’s “Criss Angel Mindfreak” and the Tour de France on OLN, which Comcast owns.

That content made the cut because it was new to on-demand and unique or themed in a compelling manner, such as daily Tour highlights and behind-the-scenes clips from the Hulk Hogan show, Mr. Thompson said.

“We continue to believe there is a huge opportunity for a network to present incremental entertainment to customers,” he said, adding that when Comcast gets behind a program promotionally, its linear ratings usually rise. For instance, National Geographic Channel found that during an April 2004 broad marketing campaign that included on-demand promotions for the series “Be the Creature,” household viewership in prime time rose 72 percent over the previous six weeks in markets where the network promoted the show, compared with a 10 percent increase in other markets.

Despite the marketing challenges some basic networks face in on-demand, other programmers embrace the platform. “HBO on Demand is an integral part of our marketing,” said Eric Kessler, president of sales and marketing for HBO. HBO on Demand reduces churn by about 17 percent and generates revenue because some operators charge customers for it. What’s more, overall viewership of original series on the linear network is up 30 percent in homes that have on-demand.

HBO is also using on-demand as a promotional platform for the linear service. For the first time, the network has created original on-demand content this summer. To complement its hit show “Entourage,” HBO is running on-demand “The Lost Screen Tests,” a parody featuring unexpected actors, such as Erik Estrada, Pat Morita and Gary Coleman, in the roles of the show’s ensemble characters.

In advance of the Aug. 28 premiere of “Rome” the network will offer on-demand a three-minute sample of the series, a 30-minute look at the making of the show and a 14-minute story of the women in “Rome.” Mr. Kessler said HBO will work with affiliates to market the new fare through print, direct mail and on-air spots. HBO will also offer a free on-demand preview for the first time, along with its free preview weekend on the linear service in early September. During that weekend, HBO will show the third episode of “Rome” on-demand before its linear premiere. “Our whole objective here is to maximize sampling of ‘Rome,'” Mr. Kessler said.

Starz, which recently inked a deal to provide 1,500 movies to Comcast on-demand each year, likewise aims to offer exclusive content for on-demand with a two-minute package in front of each movie that includes shorts, behind-the-scene interviews or previews of similar movies. “We want people to come back to Starz because there is more,” said Jerry Maglio, executive VP of marketing for Starz.

But the biggest marketing challenge is to communicate to the right customers-the ones that have on-demand, he said. To do that, Starz offers affiliates two separate feeds-one includes promos for on-demand and the other does not.

While NBC Universal has been outspoken about the need to be compensated before it makes basic cable and broadcast content available on-demand, the company nevertheless has used its cable network assets to promote Universal’s on-demand films.

Most recently, CNBC’s Maria Bartiromo provided business and career tips in on-air spots for local affiliates to sell to coincide with the on-demand debut of “In Good Company.” Using talent and personalities from the linear world builds awareness for VOD, said JB Perrette, senior VP of new media and chief financial officer at NBC Universal Cable.

Cable operator Cox is also pumping dollars into on-demand promotion. Cox planned to launch a new campaign this month to communicate to consumers in its eight new VOD markets how on-demand has evolved from movies to much more content, said Bob Nocera, Cox director of new video services.

Niche VOD networks such as Mag Rack, The Players Network and Eurocinema don’t have linear counterparts for promotion, creating a different set of marketing concerns. This month Mag Rack and sportskool, both owned by Rainbow Media, launched a new mass transit marketing campaign using soccer and skateboarding stars in the New York area to reach viewers and encourage sampling, said Dan Ronayne, general manager and senior VP of the two services.

Eurocinema also needs to be precise in its marketing to reach movie buffs and independent film fans. The European film VOD service is distributed by TVN on Insight, Charter and RCN. A fall launch of a branded service for VOD is slated, said Steve Matela, VP of affiliate relations for Eurocinema. He’s looking to strike a marketing deal with Landmark Theaters and to do grass-roots marketing at film festivals around the
country.

The Players Network, which provides on-demand gambling content, including behind-the-scenes material from the World Series of Poker, is promoting its service on other gaming Web sites. Marketing efforts will increase as advertising and sponsorship opportunities become more abundant, said Ed Sullivan, president and CEO of Illuminate, which handles marketing for The Players Network.