On Demand Summit: Execs Want Ad Gains and InnovationDistribution panelists size up VOD strengths, weaknesses, potential 6/20/2012 10:04:45 PM Eastern
New York - Cable's desire to improve the free on-demand business by increasing ad revenue and giving consumers more Netflix-like options was on display at a distribution-focused panel session at the On Demand Summit Wednesday.
Rebecca Glashow, senior VP of digital media distribution at Discovery Communications, said Discovery and other programmers eight or nine years ago "were forced kicking and screaming" into giving distributors on-demand programs to enhance the value of their digital-video offerings.
Networks knew there wouldn't be an advertising payoff, and worried about driving viewers away from watching ads on their linear channels.
The best hope was to draw new viewers to sample shows on demand, or keep existing viewers happy by providing Discovery content that complements the linear broadcasts without hurting ratings.
Over the last couple of years, Glashow said, on-demand channels have become more viable revenue sources, mostly through deals with providers such as Netflix and Amazon for library fare.
Discovery is careful with those deals to only make relatively older fare available, about 18 months after first broadcast, though. It's mostly for fans who want to "binge" on shows that aren't on the air any more, she said.
Discovery would very much like technology to easily insert ads to catch up to the Internet, making video-on-demand a better business proposition for the networks. It's already a superior video offering than Netflix, with more current and relevant programming firmly integrated into the TV, Glashow said.
David Purdy, VP of video products at Canadian media conglomerate Rogers Communications, said Netflix tapped into a consumer willingness to pay for on-demand programs -- notably older "catch-up" episodes of TV series -- that cable should have been going after, too.
Consumers are anxious to tap into video vaults such as are held by Discovery, the WWE or the National Football League, he said.
His hope is that Internet protocol-based technology will expand cable's ability to add subscription on-demand services in categories such as international channels from Asia or the first two seasons of ABC's Modern Family.
Innovation in such areas as searching through on-demand video choices also has to come via IP, which all cable companies are moving toward, he said.
"On a going forward basis, I really hope as an industry we are much more customer centric and we take chances with new business models," Purdy said. If customers want to spend $50 or $80 on subscription VOD services and pay less for trimmed-down linear lineups, the choice there is to meet that demand or lose viewers to file-sharing site BitTorrent.
"I really think we are way too slow to respond to the changing demands of the customer," Purdy said.
Michael Berman, executive VP of programming and general counsel at MSO-owned video distributor In Demand, said In Demand is relaunching its online video store, an offering to help meet the demand for vast libraries of content that can't be accommodated with cable video-server technology. The new version will have more applications and features and will be compatible with the UltraViolet "digital locker" download standard backed by major Hollywood studios and other programmers, he said.
The cable ecosystem can't currently match or surpass the libraries in iTunes or Netflix, Berman said, so cable is smart to emphasize on-demand advantages such as newer shows, live events and out-of-market sports packages, "so people know to come to us first."