Music Net on a Roll

May 8, 2006  •  Post A Comment

Making good on its February promise to lure upfront ad dollars for video-on-demand, Music Choice has increased its number of advertisers to 14 from three just a year ago. In addition, the VOD network has been inking longer-term deals-for three months to a year in some cases. That’s a big change from last year, when most ad deals were only two months long.

The influx of ad dollars, advertisers and length of terms is indicative of the increasing maturation in VOD as an ad medium and of the particular strengths that Music Choice brings to the table.

Music Choice has a solid VOD offering and its 7 million weekly views are substantial for VOD, said Tracey Scheppach, VP and video innovations director for Starcom USA, who has struck deals for multiple advertisers in Music Choice. “They have solid traffic and a good offering for the viewers,” she said. In addition, the ad model is attractive. Music Choice can refresh ads every few weeks because it encodes ads separately from the content. That’s a higher frequency than most VOD programmers, who refresh ads and programs every three to four months.

7 Million Weekly Views

Music Choice launched in 2004 with Comcast and is now carried on Cox, Armstrong and Bresnan cable systems. Over the past year, the network has grown from delivering 4 million views per week of its music videos and short-form music shows to 7 million video views per week. Those views have grown in part because the network has increased its footprint and engaged in local market promotions with its affiliates.

Music Choice runs only one ad, if any, in front of a show or music video, and reports that a mere 9 percent of its ads are fast-forwarded through. Also, the network guarantees advertisers that they pay only for spots that are actually seen. Music Choice can do that because it encodes ads and programs separately and then reports back to advertisers on the views for the ads specifically.

Advertisers are also turning to the service because of the guarantee. “They are the only ones to do that. It’s more accountability,” said Mitch Oscar, executive VP of Carat Digital, who has struck deals with Music Choice for Carat clients and expects to finalize more deals shortly. The short-form content also works well for the VOD audience, he sad. “We just see consumers in general tune in for a few minutes,” he said.

“What changed is VOD became an ad category and we were able to establish credibility,” said Christina Tancredi, senior VP of Music Choice. In February, she said that Music Choice planned to approach the upfront ad-selling season by getting its own message in front of advertisers in advance of the cable and broadcast network commitments that usually begin in late spring. Since then, the network has met with representatives from at least 10 advertising agencies, including major players such as Starcom and Mediaedge:cia.

Many of those meetings resulted in new ad dollars.

New advertisers this year include Cingular, 20th Century Fox and Dr Pepper, while advertisers including Paramount Pictures, Warner Bros. and Saturn have renewed. Ms. Tancredi cited 20th Century Fox’s deal inked in the second quarter and extending into the third as another example of advertisers signing on for longer.

Short Videos Hit Target

The average length for a show is 10 minutes-perfect for what Ms. Tancredi calls an “ADD VOD” audience. The shorter length, for both videos and shows, also helps reach the target demo of 12 to 24, she said.

She added that a major advertiser is coming on board for a new show it’s launching in July, but that Music Choice could not share the name of the advertiser yet.

In addition, the Music Choice ad sales team has worked with the programming department to develop exclusive shows that can be sponsored by advertisers. The network also has been pitching advertisers for its Hot Video List, a programming block of different videos that is sometimes guest hosted by artists such as NickelBack or the Foo Fighters, who play their favorite videos. New advertiser Cingular sponsors the “National Top 10” hot video list.

While the bulk of Music Choice programming consists of music videos, about 10 percent of the content includes exclusive shows. For instance, the network added the program “Rock Show,” about established and emerging rock artists, late last year and struck a deal with Dr Pepper in February for the soft drink to be the exclusive sponsor of the show in May, June and July. That sponsorship involves a 15-second billboard at the start of the show. Dr Pepper will also be promoted through onscreen advertisements within the Music Choice digital audio service, Ms. Tancredi said.

In addition, Music Choice revamped its 10-minute “Fresh Crops” show, which is about new artists. General Motors’ Saturn was the exclusive sponsor of the show in August and September of last year and has re-upped through the end of this year. The new version returns this month and will include a host for the first time as well as segments looking back on “Fresh Crops” alums from the prior year, such as singers James Blunt and Chris Brown, who were featured before their careers took off.

The Saturn deal is one of the first inked by Music Choice that runs all the way through the remainder of the year.

Advertisers on Board

Music Choice launched in November 2004. From its debut through the end of March the network delivered 300 million video views. The service includes 200 to 400 music videos at any given time as well as music shows, exclusive shows and artist performances.

The network recently added a kid-friendly music category called KidZone, with G-rated music videos. The network features about six genres of music.

Renewing advertisers:

  • Warner Bros. (30- and 15-second ads) for on-demand titles such as “Lord of War,” “Duma” and “Kiss Kiss Bang Bang”

  • Paramount (30- and 15-second ads) for on-demand movies including “Hustle & Flow,” “Elizabethtown” and “Get Rich or Die Tryin'”

  • General Motors for Saturn

    New advertisers:

  • 20th Century Fox for on-demand movies “Big Momma’s House 2” and “Tristan & Isolde”

  • Cingular

  • Dr Pepper