No More Free Ride with Comcast Video on Demand

Mari Silbey —  March 1, 2012

Free VOD is where it’s at. According to Comcast, 70% of the nearly half a billion video streams that subscribers watch on demand comes from the free section of its VOD library. And, leaving subscription fees aside, Comcast thinks that content should be bringing in cash. So get ready for more ads with Comcast VOD, and, quite likely, with every other cable operator.

At a Broadcasting & Cable and Multichannel News event yesterday, several cable and programmer folks got together to talk about “advanced” advertising. The term covers everything from interactive ads, to dynamic ad insertion, to cross-platform campaigns, but there was significant focus yesterday on VOD commercials. That’s because a cableco consortium known as Canoe recently ditched efforts to create a national platform for selling interactive ads, and instead decided to spend all of its resources on video on demand. (Canoe laid off 80% of its staff in the process too. Ouch.) With all of the flexibility on the web, the cable industry has been fighting to catch up in the advertising revenue game. Operators have all this premium, time-shiftable content, and yet with little ability rotate new ads in an out of on-demand programming, they’ve felt hamstrung. In 2012, they’re finally ready to do whatever it takes to change that.

In the near term, Comcast is going to ramp up its dynamic VOD ad sales this year, starting with dynamic pre-roll and post-roll ads, but adding in mid-roll spots very soon. On the positive side, that means not having to watch the same commercials in VOD shows over and over and over again. On the negative side (for consumers), it also means advertisers are going to find on-demand programming a lot more attractive, which means Comcast is going to start selling more ad space to bring in more revenue.

Interestingly, the new Comcast Streampix service may not get hit as hard with commercials, at least in the near future. Executive Marcien Jenckes was asked yesterday about ad insertion rights for Streampix, and he responded that although Comcast is working with each of the participating studios to determine ad rights online, the bulk of user consumption comes with TV shows that have aired recently. Jenckes may change his tune if and when the Streampix back catalog starts proving popular, but for now he seems to think that Comcast will keep its ad focus primarily on VOD.

Over the next few years, expect everyone to increase ad loads, both through traditional VOD and on the web. Licensing fees are cutting into video margins, and cable operators want to boost their revenues. There is new money to be made in advertising.

5 responses to No More Free Ride with Comcast Video on Demand

  1. Michael Burstin March 1, 2012 at 2:46 pm

    And just when Comcast was going to let me watch VOD on Tivo, they have to potentially spoil it :(

  2. I bet they’ll send out a letter talking about the exciting new targeted ads. To bring this and the other many new features (none mentioned of course) they’ll only have to increase the cable bill by $3/month to cover their costs.

  3. WHy does everyone hate cable?

  4. VOD on Comcast is unwatchable!! Many shows you can’t FF past the ads, and there is pitifully little there.
    From the second a show finishes its premier airing it should be in the free to watch, ad free, VOD library in perpetuity!
    If you missed ‘x’ show last night you could be SOL for days, weeks, or months waiting for it to show up in VOD.

    And that isn’t even getting into the pathetic, unusable FF/RW controls in Comcast VOD/PPV. If you’re lucky ;you can hit within a minute of your intended target.
    My 15 year old ReplayTV’s can get you within 10 seconds of your target in 2 commands.

  5. Wow, they’ve figured out how to make a playlist. Took them long enough…

    Certainly they’re going to do pre-rolls. Those will work well. A little more black than you’d think necessary around the ads I bet to gloss over some issues. And some audio glitching too depending on what STB you’ve got.

    And yes, they’ll disable FF while the ad plays back. Suspect they’ll see some rather dramatic fall-offs in free VOD watching as a result myself (a la YouTube). Will be interesting to watch.

    I wish them luck with the post-rolls. If they try anything other than movie trailers or ads for other VOD content I’m not sure how many people will hang around to watch them.

    As far as mid-rolls, I don’t believe they’ve got the technology ironed out just yet. They need the encoders to ‘condition’ the content at the ad boundaries and since the encoders (the ones owned by Comcast anyway) don’t know where most of the ads are (other than the 2 minutes per hour of locally inserted ones), this ain’t gonna happen quickly. Don’t hold your breath.

    As far as Canoe, it was obvious to anyone with half a brain that it was a collosal waste of time. For most of the time it has existed. Sad.