Thursday, May 10, 2007

Disney, Cox Tweak Video Service to Combat DVRs

Cable operator Cox Communications and Disney have teamed up to eliminate the fast forward option on a new video on demand service. Select ABC programs will be available on demand the day after airing on broadcast TV, but consumers will have to watch the ads.

Video on demand services will likely expand to counter the flexibility of using DVRs to record and watch shows later. But forcing people to watch commercials in a traditional manner misses an opportunity to generate even more revenue through interactive customized ads.

This could be a groundbreaking opportunity for cable operators to better know their customers and engage in interactive marketing. Cable operators should develop interactive ads that run before the program based on demographic information.

Let's say you work on Thursday nights but don't want to miss Grey's Anatomy. The first time you want to watch the show through VOD, you are asked a few demographic questions, and interactive ads that match your tastes (clothes, cars, detergent etc.) are shown before the broadcast. Cable operators then get great data about the effectiveness of ads and can charge much higher rates than they can through the unfocused ads of broadcast TV. Consumers get to watch the show uninterrupted, so everyone is happy.

DVRs, which are now in 17 percent of households, are here to stay, and combating them with yesterday's tools is a losing battle.

Source: MediaPost.

Posted By John Gartner at 09:37 AM
Permanent Link: Disney, Cox Tweak Video Service to Combat DVRs | Comments (1)

(1) Comments on Disney, Cox Tweak Video Service to Combat DVRs

Well, this is interesting. Disney and Cox have two constituencies they need to please. The advertisers will love this, the DVR-savvy consumers will hate this.

If this is a market experiment, then I give them credit for experimenting. If they're committed to this, they're in trouble because one of the key reasons consumers watch via DVR is to skip the commercials and I predict they will lose market share.

Having said that, the experiment (if that's what it is) should be very interesting. Maybe they'll only lose certain types of customers and then they can drive programming to the customers most interested in VOD with commercials.

My guess, though is that this is market segment that will be shrinking over time.

Comments by glenn gow : Friday, May 11, 2007 at 12:42 AM

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