IPTV Advertising

Filed in archive IPTV on April 18, 2005

Presently there is not all that much quality television content available to us from either cable video on demand (VOD) or internet protocol television (IPTV). It seems logical that over the next five years that this should change and we will have access to much more video content and be consuming our television differently.

Here is a question that I would really like to hear everyone opinion: how will we pay for it? There are only two realistic approaches -- we either pay subscription fees that underwrite the production and delivery of what we want to see or we can let the advertisers pay the freight. Or some combination thereof.

But let's start off with a little reality check. In 2003 the Viacom station group (Viacom owns CBS) received about $1.8 billion in advertising revenue. If every household paid that amount of money directly in fees proportional to CBS's television ratings, Viacom household might pay $180 per year for just their content. I suppose that we would repeat that again for NBC, and again for ABC, and ESPN, etc.

So I ask again, if we had a chance, what would we tell Comcast and Time Warner Cable and SBC and Verizon about how we are willing to pay for it? Here are a few ideas:

No Advertising, that is, we will pay some subscription fee to access only what we want. Although many permutations are possible, I suppose that we might not expect the average household to pay more than today's current monthly cable fees for everything. Cable at least gives us 150 channels of nebulous content for that money. If we got our television on demand, we better get access to at least that much stuff.

Sponsorship Advertising. How about this idea; after I pick the program that I want to watch, Comcast or SBC makes me watch up to 4 minutes of commercials and then I can watch my television show on demand and ad free. (note: if we remained consistent to today's commercial programs, I would possibly watch 18 minutes of ads for every 42 minutes of show).

VOD Equivalent of the Status Quo. How about this: give me access to the program, Comcast and SBC can stick ads inside the program at the traditional commercial breaks and give some of that revenue to the producers of the show and leave me out of it.

A Television Version of the Internet's Point and Click. Watch a program, see something of interest, click on it, show pauses, shifts to video of item of interest, and so on. This way, a viewer sees ads only if he/she likes what an actor is wearing, driving, eating, etc. Basically, the click through to the item of interest makes the advertiser pay the cost of television, but I only see what interests me similarly like the Internet today. I suppose that there might be some equivalent of Google's AdWords in this mix.

Perhaps you have another idea not listed above? Please give any reply that you think reflects your thoughts. You never know, we just might influence how the new media companies will build on-demand television.