New ad-supported video service on ABC.com will allow each advertiser to be sole sponsor of an entire episode. Network hopes it will drive viewers to the broadcast network once new viewers sample the shows.
Despite reports of a new broadband site dubbed “My ABC,” ABC’s new Internet based ad-supported video service will most likely reside on ABC.com, according to sources in the advertising community. ABC is selling exclusive sponsorships to individual episodes of Lost, Desperate Housewives and Commander in Chief and will begin airing the shows online in May, giving advertisers a crack at a brand new distribution window for the hit shows.
“They’re selling up to three pods to a limited number of advertisers,” said Andrew Donchin, executive vice president and director of national broadcast for Carat USA. “Each advertiser will own a whole episode. If you buy it, it’s your show.”
Reports of the venture broke last week when ABC ad sales and marketing chief Mike Shaw mentioned it on a panel at the American Association of Advertising Agencies Media Conference in Orlando, Fla., before the company was ready to announce details of the venture. Since then, he has been pitching selected agencies on getting involved on a stand-alone basis.
“We’ve been having meetings with interested parties this week—clients are definitely talking about it,” said Donchin.
ABC is hoping to attract the kind of national, brand-focused advertisers that buy spots on national broadcast. To date, direct response advertisers have represented the majority of online revenue, though that is beginning to change. A new survey of online publishers by Advertising.com found that 32% of online ad revenue would come from traditional advertisers in 2006, up from 26.5% last year and 22% in 2004.
Advertiser interest is high partly because ABC has been so successful in selling its shows on iTunes, reporting 3 million downloads to date at $1.99 a pop. (Apple launched a new subscription model on Wednesday, charging subscribers $9.99 per month for unlimited downloads of certain shows like Comedy Central’s The Daily Show and The Colbert Report.)
The thinking is that far more viewers will be interested in viewing premium content online with limited commercials attached if they don’t have to pay for the privilege. A new study released this week by Frank N. Magid Associates found that among those actually planning to buy a video iPod, 72% said they would be more likely to download a TV show that was advertiser supported and free.
There is also a desire to try to follow eyeballs wherever they may be. Younger viewers are spending more and more time in front of their computers and on their cell phones than they are focusing on what’s on television. Both networks and advertisers are trying to adapt to these new consumption habits.
“It’s not just about the Internet. It’s that TV is changing in how it’s distributed and viewed,” said Greg Smith, executive vice president and director of media planning, insights and analysis for Carat Fusion, Carat’s online buying division. “The question is, do I buy TV that’s going to be seen through a TV set or do I buy TV and follow it wherever it goes?”
ABC affiliates are also interested in learning more about the venture—and possibly participating in the promotion of online programming—in exchange for a share of future revenue generated. Though the initial panic about audience dilution of the original broadcasts of these shows has subsided, affiliates are still concerned about the impact the arrangement will have on their over-the-air business.
“We are having ongoing conversations with the network about working together on these things,” said Deb McDermott, former head of the ABC affiliate board and president of Young Broadcasting, which owns five ABC affiliates. The current affiliate board chairman, Leon Long, general manager of WLOX Biloxi, Miss., could not be reached for comment.
Networks that have been active in multiplatform program sales, like ABC and NBC, have tried to assuage cannibalization fears by claiming that such sales actually increase the ratings of these shows by encouraging sampling by non-viewers and driving them back to the broadcast window.
“It actually drives more traffic to our network shows,” said Albert Cheng, executive vice president of digital media, Disney-ABC Television Group. “That’s how we look at a lot of these different platforms in saying how do we take this content to other areas, reach people that have not seen the content before, drive awareness and bring them back to the show on the linear broadcast?”