Comcast Corp.'s chief operating officer, Steve Burke, issued
a warning to those content providers who sit by idly and complain about online
viewing without doing something to change the TV business model. "An entire
generation is growing up, if we don't figure out how to change that behavior so
it respects copyright and subscription revenue on the part of distributors,
we're going to wake up and see cord cutting."
He said the current OnDemand Online trial - offering viewers access to cable channel shows in
exchange for identifying themselves as subscribers - was not an effort to
"change the advertising model or get a minute back from content providers,"
rather it is a way to "get in front of the biggest social movement I've ever
seen. Online video consumption is off the charts."
Previously cable operators have played down the extent of
cord cutting and some Wall Street analysts say they've seen little real
evidence of a supposed phenomenon that has subscribers canceling their cable
subscription to watch online for free.
Speaking at the CTAM cable marketing convention in Denver,
Colorado on October 25, Burke described his fears if the industry does not move
ahead to form new business models. The industry-wide TV Everywhere
authentication project is a way to try to "take the cable industry and put it
ahead of the internet and try to not let it roll ahead of our industry," he
said. Burke also illustrated some
frustration with those in the business who were not lending a hand.
people's business models are going in the wrong direction," he said, a likely reference
to News Corp, Disney and NBC Universal who are partners in free online video
site, Hulu that is considering putting some content behind a pay-wall. "I've yet to meet a content provider who
doesn't worry about cord cutting and doesn't see the wisdom of trying to get
ahead of that. Stop talking about how hard it is and start figuring it out," he
Many content providers however aren't keen to move ahead
with the TV Everywhere plan until there is a discernible revenue model in place
and that widely depends on an overhaul of video measurement across the screens.
He said Comcast was willing to join the nascent group Coalition for Innovative
Media Measurement, or CIMM, which is challenging data providers to come up with
new ways of measuring video viewing beyond the services provided by Nielsen and
Commenting on how the ad load should look online, Burke said
content providers were in charge of their own ways of scheduling ads, either
running the equivalent ad load that accompanies shows on TV, which many are
doing, or charging higher rates for less advertising. "People are less tolerant
of online [ads] than they are on TV, but at this point they're so happy to have
the offering," he said referring to the OnDemand Online service.
Laura Desmond, CEO of Starcom MediaVest Group, appeared on
the same CTAM panel, titled, "The Future of Advertising," saying that clients
such as Procter & Gamble are well on their way to preparing themselves for
a new world of media, one that gives them the same advantages in digital media
as they receive from their long relationship with the mass media players. She
applauded the efforts of aggregators such as Comcast's Fancast and Hulu, which
just received a big ad buy from Starcom's MediaVest unit.
Desmond said addressability, the kind being prepared by the
cable industry's Canoe Ventures and others, would help advertisers minimize
waste. She suggested that around 40% to 50% of a typical primetime ad buy was
wasted on viewers not interested in the product or service or outside of the
advertisers' target. However, she viewed it unlikely that addressability -
targeted advertising to subsets of consumers - would happen within the next two
years. In order for targeted advertising to become truly accepted by
advertisers, "We need to have that platform rolled out and encompass all of the
TV world, not just cable and a few networks. Advertisers such as P&G and
WalMart are eager for this, to redeploy those dollars. There's a real call for
direct marketing principles to be adopted by the mass medium and the more you
see that the more you'll see demand and dollars increase. We're waiting for a
platform that truly goes scale." Canoe Ventures interactive capabilities are
rolling out at the end of this year, with addressability much further down the
line. No advertisers are yet on board.
On a separate note, Burke thinks the interactive
capabilities of cable will apply equally to content creators not just
advertisers. He envisioned a future where cable users might be able to vote for
their favorite American Idol
contestant thanks to EBIF, a software application being rolled out by Comcast
to allow for interactivity. Such interactivity would be available system wide