Study: Spot and TV Better Than $1 Fee

Dec 5, 2005  •  Post A Comment

Fresh data from video-on-demand research firm Marquest Research suggests that consumers might not be that wild about the 99-cent download model for TV shows that NBC and CBS are forging ahead with.

In a research study conducted this summer and being released this week, the firm asked consumers if they would rather pay $1 per TV show episode and receive it without commercials, or watch it with commercials for free. The overwhelming majority of consumers opted for the commercial option, said Paul Rule, president of Marquest.

About 70 percent would rather watch a TV show episode for free than pay a dollar. Homes that already have on-demand access or digital video recorders were most willing to have ads, with 88 percent and 86 percent respectively preferring the ad option.

This makes sense to media agencies that have been placing clients in ad-supported VOD for the last few years. “Do you think someone is going to pay $1 for something if they can see it for free and watch one spot?” asked Michael Bologna, partner and director of emerging communications at Mediaedge:cia. “Watching shows for free and seeing advertising is a model we’ve been supporting for [many] years. … The amount of advertising that has been incorporated into the cable content on-demand over the past six months has grown significantly.”

The Marquest research also found that consumers are interested in subscription packages of on-demand content from ad-supported networks, too, in addition to the existing SVOD content from HBO and Showtime. About 12 percent said they would be very likely to subscribe to a network on-demand programming slate. “If a network puts the right offer on a subscription basis, it will work,” Mr. Rule said. However, networks need to move quickly to gain advantage. “There is a maximum amount of people who are going to be willing to spend. There are a lot of networks struggling to come up with a business model and many are looking at a subscription model. It makes more sense in the long run than peddling the 99-cent one.”