Changing Viewer Demands Lure Nets to Web

Mike Shields and John Consoli
SEPTEMBER 18, 2006 -
改变中的收视习惯诱惑电视网触网

Less than six months ago, ABC’s decision to stream episodes of Lost and Desperate Housewives on the Web was treated as landmark and revolutionary. But these days it would be bigger news if a network decided not to preview a new show on the Web, given last week’s slew of streaming announcements from the broadcast networks.

Network and media agency executives said the recent moves by Fox, CBS, ABC and NBC to stream significant portions of their prime-time lineups are being driven by several factors: the increasingly difficult task of getting viewers to notice a new show in a 500-channel, 50 million-MySpace user-universe; broadband users’ rapidly changing media expectations; and a growing ad market for online video.

First off, with media fragmentation near overload, networks can no longer rely on just putting their shows on TV and hoping viewers find them. Dave Poltrack, exec vp and chief research officer for CBS Corp., offered an interesting stat: in the mid-1980s, half the TV audience had already sampled a network’s shows by November [six weeks into the season]. Now that number is around 15 percent.

Thus, networks are employing the “try it you’ll like it” strategy. “It’s like the consumer packaged goods sampling market,” observed David Hallerman, analyst at eMarketer. Poltrack added that given the highly serialized nature of many network shows these days, alternative viewing options are key to reaching fans that might not want to miss an episode, or non-fans who want in on water-cooler buzz. In fact, ABC’s research found that sampling and catching up were among the top reasons users streamed its shows last spring, according to Albert Cheng, executive vp, digital media, Disney-ABC Television Group.

Beyond sampling, the nets are also simply reacting to their audience’s demand for on-demand viewing. “It’s about what people want and where people are going,” said Vivi Zigler, exec vp, NBC Digital Entertainment, New Media, of her network’s decision to stream all its new fall shows. Surely, the networks are also being motivated by the hot Web video ad market, where “interest among advertisers is outstripping inventory,” said Hallerman.

ABC said it will stick with the formula of running three national ad spots for a single advertiser within each streamed show, plus one local spot as part of a new affiliate pact. While no advertisers have been announced for this season, during last spring’s test ABC tapped both Ford and Toyota for discounted runs.
All the networks are looking to land new dollars for online video inventory, though just how they’ll charge buyers is still evolving. “ABC isn’t exactly sure of their model,” said Peggy Green, president, Broadcast & EntertainmentZenith Media Services, whose client Toyota participated in the test buy.
CBS is similarly tweaking its pricing options. “No one knows right now what the ultimate currency will be and what the industry standard will be,” he said. “The agencies are encouraging us to be as creative as possible,” Poltrack said.

NBC just began its sales process last week, so it’s possible that some shows will initially stream without ads. But according to Zigler, NBC’s sitcoms will soon carry two to three ads per stream, while its dramas will carry four to five spots. Like ABC, NBC will approach its top TV advertisers first, considering that buyers who are drawn to specific shows are likely to be interested in reaching those viewers elsewhere.
“They’re about getting those engaged users,” said Zigler. “An online user is extremely engaged.” Craig Woerz, managing partner, Media Storm, agreed that ad inventory within full-length network shows is more compelling that other broadband fare. “We’re buying as much as we can get of it and we’re willing to pay a premium.”

Steve Grubbs, CEO of PHD, said that TV advertisers who decide to buy into corresponding online inventory will want to know how streaming impacts their total audience. “As long as they can prove how much of an additional audience they are reaching, we will come to an agreement on how much more to pay for that audience,” he said.

One concern that no one seems to have is TV ratings. “I don’t believe it will eat into live TV viewership,” said. Added ABC’s Cheng: “This is purely additive,” he said. He says that research showed that even the since-cancelled Commander In Chief gained viewers during last season’s streaming experiment.
While research like encouraged ABC to expand the of shows available for viewing online this time around, Cheng said ABC won’t just put its whole fall lineup on the Web.

“We ask ourselves, ‘do we think the show benefits from additional exposure?’” For example, ABC feels that the young skewing Ugly Betty will likely benefit from being on the Web, while an older skewing drama like Brothers & Sisters might not.

Still, streaming prime-time shows is not without pitfalls. While studios are far more inclined to play ball than they were even a few months ago, rights negotiations require a “Herculean effort,” said Cheng. Plus, streaming technology can be pricey. “There is a significant cost to do this,” said Zigler.