NBC just announced that it is going to offer free TV show downloads online allowing viewers to take more control of their content. I agree with Fred ,however, that while this is a smart move that this is only half a step since they are limiting the view to 7 days before it self destructs. More importantly, this makes me think about the free vs. paid discussion and how media companies are increasingly understanding the possibilities and scale that free can provide over paid. Finally, this move by NBC, I believe, will help open the floodgates for all kinds of video advertising technologies. In the first iteration of the NBC download service, users will not be able to skip commercials. My thought here is great, NBC needs to get paid, but they will also have to be innovative and creative and test many different forms of video ads to maximize viewership and revenue. As we all know, the web is great for targeting and with this move I see a world where one-to-one customized video messages will be delivered directly to the viewer based on location, time of day, content, etc. Of course, I have to give a shameless plug here for one of the fund’s portfolio companies, Visible World, as this is what it does for video advertisements on broadcast, cable, and web. Based on our experience to date, better targeting, more relevancy, and customization equals more satisfied viewers and more revenue. Of course, this is just one example of video advertising that should flourish with free downloads. I would also love to hear your thoughts about other potential forms of advertising that you believe will be delivered around this content
Published by Ed Sim
One comment on “Video advertising just got a big boost”
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Traditional media powerhouses like NBC are making the bulk of their money off their mainstream media properties. At this point NBC needs to BEGIN investing and experimenting in digital both to placate their investors (due to the roughly 2% incremental loss their facing bec of growing DVR proliferation) and as an investment in the future. NBC isn’t going to kill their DVD and syndication markets (anytime soon) with free ad supported time-unristricted DRM secured asset distribution. The 7 day shelf life is actually brilliant. This allows viewers to catch up on missed episodes (much like they do on a Tivo) and remain engaged with the brand in between new episode releases. As shows will typically air a new episode every 7 days, the 7 day shelf life makes perfect sense from a traditional media monetization perspective. It may not be what we would ideally want as digital media users, but it makes the most sense for NBC given their current revenue models,
Additionally, distributed user controlled downloadable asset distribution is a dangerous pandora’s box that many traditional media properties are hesitant to open. If they let go of content distribution, then Revelie (productions) will be able to bypass NBC and bring much of their own content direct to users, generating significantly greater ad revenue for themselves as they will have bypasses a fairly significant middleman (this hypothecial takes place 30 years in the future when broadcast TV and IPTV are operating on equal planes).
For more check out my post on this today at http://jburg.typepad.com/future/2007/09/when-users-prop.html