U.S. TV networks tout video on-demand for catch-up viewing

Reuters

By Lisa Richwine

LOS ANGELES, Oct 4 (Reuters) - The morning after a newepisode of the drama "Sleepy Hollow" airs on the Fox broadcastnetwork, a message on the show's Facebook page encouragesviewers to catch up with the show by clicking on their cableoperator's video on demand service.

Fox and other networks are firing up marketing efforts tosteer audiences who miss live episodes to free on-demandviewing. As the new television season gets underway, they areputting promotional spots for video on demand, or VOD, in primetime, on their web pages, and on social media.

For network executives, VOD is part of their strategy tocompete in an ever-more crowded entertainment landscape, wherelive TV viewing is on the decline and streaming services likeNetflix Inc are gaining in popularity.

VOD - which now reaches 60 percent of U.S. television homesthrough set-top boxes, according to a Nielsen report releasedlast month - helps build audiences for new and returning TVseries. It gives networks a shot at attracting an extra chunk ofviewers to shows they did not record or had not heard about.

"To get people to remember the day and time a show airs,it's really challenging," said Michelle Garry, senior vicepresident of multi-platform marketing for the Fox network. "Ifpeople miss the show during its live airing, we still want togive them an opportunity to sample it."

VOD also provides a fresh revenue stream for networks.Unlike viewers using digital video recorders, those watchingshows on video or demand often can't fast forward throughcommercials. Research firm Rentrak estimates the VOD ad markettotals about $1 billion year. Total TV ad revenue reached $62.5billion in 2012, according to media buying firm MagnaGlobal.

The VOD push coincides with the arrival of technology thatallows networks to insert new commercials into shows viewed onVOD more than three days after their initial airing.

Traditionally advertisers pay when viewers watch theirmessages live on television or within three days on a DVR, ameasurement called C3. On-demand viewing within three dayscounts toward that total if the same ads appear.

In the past, advertisers resisted paying for on-demand slotsbeyond three days because they felt their messages were stale,particularly when pitching movie openings or one-day sales. Butthe new technology lets networks insert fresh ads starting onday four for on-demand shows offered by some cable operators.

In the future, networks may be able to count on-demandviewing of older episodes. The industry is working on technologythat would let cable operators drop the same ads from a liveepisode into the same show's older episodes, which would earn C3credit from advertisers through a measurement called on-demandcredit, or ODCR.

"When we get that done, that will be a big solution," NBCBroadcasting Chairman Ted Harbert said last month at a HollywoodRadio & Television Society event.

MORE SERIES ON VOD

U.S. households watched an average of 8.5 hours ofprogramming through VOD in 2012, according to research firmRentrak. In all, viewers watched more than 1 billion hours ofVOD programming, an increase of more than 40 percent.

This season, networks are adding more series and moreepisodes to the on-demand menu. Typically the past five episodesof a show can be watched free. Fox also will make full seasonsavailable on demand for competition shows "The X Factor" and"MasterChef Junior."

On the day after the "Sleepy Hollow" premiere on Sept. 16,the episode drew the most VOD views for any single show episodein the network's history, Fox said.

Fox hopes the catch-up episodes get viewers hooked so theytune in when a show first airs, Garry said. "Hopefully, they geton board with live viewing and make it one of their must-seeshows," she said.

CBS will offer 21 series on demand during the 2013-14season, up from 13 last season. For new show "Hostages," thenetwork is running promotions in prime time urging viewers to"catch up on the new drama 'Hostages' online or on demand."

"VOD represents an important part of catch-up viewing," CBSspokesman Chris Ender said. "We're working closely with ourdistribution partners to help them serve their customers, ouraudience, on this growing platform."

Cable operators are assisting the networks because they arealso in a fight to keep customers from migrating to Netflix andother "over-the-top" competitors.

Comcast Corp staged "watchathon" weeks in Marchwhen it offered extra episodes from multiple networks on demand,to encourage viewers to use the platform. Verizon CommunicationsInc's FiOS service highlights VOD shows on its Twitterfeed.

Research by Walt Disney Co's ABC shows VOD attractsa younger and more affluent audience than its TV audience. Fiftypercent of ABC's VOD viewers are age 18 to 49, the group prizedby advertisers, compared with 36 percent on television.

Advertisers are warming to the VOD environment, said ToddGordon, head of U.S. investment at MagnaGlobal. In the earlydays, systems to access shows were often clunky, and advertiserscould be stuck with running the same commercials for a month.

"It was always a great untapped environment, but thetechnological limitations made it harder for the network tomonetize it," Gordon said. "Now that is going away."

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