The future of Video on Demand? More variety in ads, and having to sit through them no matter what

Expect the way that ads appear in Video On Demand content to evolve dramatically over the next few months. Shifts in technology from “dynamically inserting” ads to ensuring that viewers don’t have the ability to fast-forward through advertisements will change the way that ads and VoD content mix, according to Comcast executives, leading to what they’re calling a “hockey stick jump” in ad revenue from the service.

“We have 400 million monthly VoD views on Comcast. I’d love to have a dollar for every view,” said Comcast Spotlight’s West regional vice president of integrated media sales Chip Meehan during an appearance on a panel at the Multichannel News/Broadcasting & Cable fourth annual On Demand Summit yesterday. Meehan predicts a “tenfold” uptick in ad impressions on VoD content for Comcast over the next twelve months, adding that the carrier is already working on deals with content providers to increase the amount of free and paid programming Comcast offers on the service (The carrier has already signed a deal with Disney, and is working on additional partnerships already. “Once the first couple of them are figured out you can assume the rest will follow. If Comcast and Disney can figure it out you can assume we’ll figure it out with others,” he reportedly said).

Part of the way VoD is growing is through the ability to switch up which ads are shown to viewers; using “dynamically inserted ads,” VoD users won’t have to see the same one commercial every single time an ad break appears, which – according to Scott Criley, director of new media at Harris’s Broadcast Communications division – changes things greatly. Whereas earlier VoD ad attempts were, in his words, “a painful experience, because you would see the same ad over and over again,” causing viewers to “abandon halfway through,” offering DAI through VoD creates a more familiar, less repetitive experience. “Now the ad mix you see are more like linear TV,” he said.

That’s something that’ll appeal to viewers, advertisers and content providers, but it’s not enough to ensure the uptick in ad revenue for Comcast; that’s why they’ve also disabled the “trick-play” (fast-forward) capability for a lot of their VoD content. Somewhat surprisingly, says Meehan, “we’re not seeing a decrease in views for VOD with trick-play disabled.”

Making VoD ads work financially is a big deal for Comcast, and with good reason. As Meehan explained during the panel, around 80 percent of Comcast’s current 400 million monthly VoD views belong to free content. If even just half of those views come from cable programmers, then that’s still 160 million views each month – managing to monetize ad sales for those types of numbers (especially with the ability to promise that viewers will have to sit through the ads) could be a very welcome additional revenue stream for the company. Or, as Meehan said, citing the 160 million monthly viewer figure, “That times 40 bucks starts to be a pretty big business.”

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