Disney Deal Is Apple of Advertisers’ Eye

Oct 17, 2005  •  Post A Comment

As it turns out, “commercial-free” is not exactly a dirty word in the world of advertising.

Top members of the advertising community welcomed with open arms the news last week that The Walt Disney Co. and Apple will make hit ABC shows available for download commercial-free on iTunes.

Perhaps it sounds counterintuitive-marketers endorsing a new business that bypasses the traditional delivery of their messages-but executives last week identified at least two reasons a move like this is good for their businesses.

For one thing, podcasts could actually improve the performance of shows in prime time, where marketers do advertise-especially if the downloaded shows are of a serialized nature. Second, the value of product placements within podcast shows could blossom the same way executives expect placements in shows to increase in value when they are viewed on VOD.

What’s more, industry insiders see the Disney-Apple deal, which calls for the ABC hits “Desperate Housewives” and “Lost” to be available without ads, as a possible precursor to or foundation for a model that does include ad support.

Serialized shows, such as “Desperate Housewives,” “Lost” and Fox’s “24” and “Prison Break,” have great potential for getting a boost from readily available airings on emerging viewing platforms because they enable viewers to catch up on plot lines, said Rino Scanzoni, chief investment officer at Mediaedge:cia.

“The more opportunity you give people to stay with it and stay engaged, the larger your overall audience is going to be, so I think it’s actually positive for the broadcast advertiser,” he said.

Serialized shows haven’t repeated well, so, “What you have to do is maximize the audience you get as you’re going through the original cycle,” Mr. Scanzoni said, adding that “The hard-core fans will probably watch it on broadcast, because it will come up first there.”

An ad sales executive at one cable network said that when shows appear ad-free on VOD or other platforms, he expects the value of product placements to be enhanced. The same goes for product placements in shows Disney puts on iTunes.

“If I was Nissan (which has a product placement deal with ABC for ‘Desperate Housewives’) I’d make a deal to pay the $1.99 [download fee] myself,” the ad sales exec said in reaction to the Disney-Apple deal. “People downloading the show have enough money for a video iPod and probably have enough money to buy a new car.”

By making the shows available on iPods commercial-free, Disney is likely to maximize the number of downloads, Mr. Scanzoni said. Disney needs to make the iTunes deal as attractive as possible to potential viewers right now because paying for shows will not be compelling to consumers, partly because it’s hard to watch full-length shows on tiny screens, he said.

“I’d be surprised how many viewers they get at $1.99,” he said.

He added that he thought that Disney and other media companies might someday accept advertising on the iTunes releases, although he cautioned most viewers would probably fast-forward through commercials.

Indeed, a big question facing marketers is where advertising fits into a world in which users are willing to pay for better access to TV content. While the content is currently ad-free, most do expect an ad-supported model to emerge.

“What I’m hoping will evolve, and I think it will, is the capability to target individual users like we can on the Internet,” said Coleen Kuehn, executive VP of strategic development at Havas’ MPG. Basic ad implementation, she said, could look much like what’s currently offered for broadband video-15-second spots or one 30-second spot before the show.

Mr. Scanzoni said he expects Disney and other network owners to put their shows on video-on-demand platforms as well in the near future.

Mike Shaw, president of sales and marketing for the ABC Television Network, confirmed that when the network shows go onto other platforms, including VOD, they will have ads.

Advertising Age contributed to this report.