“We believe that in exchange for that the consumer is willing to watch a larger commercial load than many are doing today on the Internet just as they have demonstrated” in video-on-demand (VOD) tests.
Atlanta-based Cox Communications tested viewers’ response to full loads of ads on shows carried on its MyPrimetime On Demand service.
Cox has been distributing programs such as NBC’s “The Office” the day after they aired “live” on the network, tracked viewers behavior and surveyed them afterward. The research showed viewers don’t seem to mind the same number of ads with VOD as on “live” TV.
“Viewers tell us they’re very happy to be able to see [an episode] of ‘The Office’ they would otherwise have missed, and they don’t see the difference in watching the ads” when the show airs live versus on demand, said David Porter, Cox Communications’ vice president of advertising product development.
For TV networks and programmers, the Internet is barely tapped as a way to distribute programs to viewers and generate millions in advertising revenues. Right now, Americans only watch about three hours of video a month on the Internet. That audience is 1/50th the size of the TV audience.
But the viewing audience, at sites like Hulu.com, is growing by the day. In September a record 168 million U.S. Internet users watched online video, according to ComScore, a company that tracks online traffic.
At the same time, Internet ad spending continues to grow, increasing by 10.6 percent last year to $23.4 billion, according to the Interactive Advertising Bureau.
But TV programmers may face resistance over the long run to TV commercials on the Internet, said Jared Hendler, who follows the industry as worldwide executive creative director for Edelman Digital, a division of the New York public relations firm.
“The mistake the entertainment industry is making with the online environment is denying the fact that no one wants to watch a commercial if they do not have to,” he said. “Stopping to have to watch a commercial is simply archaic.”
A survey by Los Angeles-based Interpret Research suggests as much. Thirty-eight percent of “current online streamers” of Internet videos said they watch shows on the Internet just to avoid the commercials that air with the shows on TV.
“Increasing the online television advertisements to match the standard 18 minutes per hour on broadcast TV ... could potentially send consumers back to their” digital video recorders to avoid ads, said Michael Gartenberg, Interpret vice president of strategy and analysis.
Atlantan Neil Millman, 45, said one of the reasons he watches shows on the Internet is to avoid the commercials. “On the Internet they have a one-minute commercial break that on TV is three minutes,” he said.
On the other hand, you have to watch commercials on Internet shows because the shows can’t be recorded and viewers can’t fast-forward past the ads, Millman said.
“What are your choices?” he said. “Either missing the show entirely, or watching the commercials. It’s basically choosing the lesser of two evils, and the lesser of two evils is watching it online.”
Jack Wakshlag of TBS disputes Interpret’s research. “They report what people say, not what they do,” he said. “If we believed what people said about TV programs and content preference, PBS would be number one,” he said. “Nobody watched the O.J. [Simpson] trial, and nobody watches wrestling.”