On-demand Programming Will Cost Consumers Plenty; Now Add Commercials

by Wayne Friedman, Jan 19, 2006, 1:30 PM

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Comcast Corp. continues to believe its video-on-demand experiments work best with an advertising component. But don't think General Motors; it's more the Bun & Thigh Rocker.

Exercise TV, an on-demand channel launched with Time Warner Cable, is a new variation on the on-demand programming theme. The programming service will have nontraditional advertising, product integration, and other messaging. As with other on-demand deals, all Comcast wants is for consumers to purchase a digital set-top box.

Comcast and CBS did a similar on-demand deal--but with a twist. In the rush of on-demand programming deals networks made at the end of last year, the CBS-Comcast deal is the only one to include advertising. But in contrast to most Comcast deals--which are free to its consumers--the CBS programs will have a $1.99 price tag. That fee has seemingly become the standard, as other networks have also inked on-demand deals with a $1.99 price tag.

CBS will charge $1.99 and sell advertising because... because, well, it can. CBS can do this because its programs are only being offered on Comcast systems in markets where CBS owns stations. For non-owned CBS affiliates, this would be too much to stomach. Stations would complain that those on-demand TV ad deals would infringe on their ability to sell local TV advertising time. CBS would need to appease those stations, perhaps with a revenue sharing deal.

Comcast has been offering other programming free to its on-demand consumers--mostly movies. Exercise TV looks to take that to another level--not only in establishing a distinct on-demand channel but in dealing with advertising and sponsorship.

So far, New Balance is the lone advertising partner in Exercise TV--but not in the usual sense. The athletic shoe company will get product placement in exercise shows and other nontraditional places.

But Steve Burke, president of Comcast Cable and COO of Comcast, offered a hint of the channel's real direction when he was quoted as saying: "The home exercise market offers a great business opportunity for additional Exercise TV sponsors."

Does he mean infomercials? Stuff like the Ab-Lounge, the Ab-Slide, the Ab-Six Packer? One did wonder who was footing the bill for all these new media deals--now we know. In the frenzy of the suddenly hot on-demand programming world, we lost track of direct response advertisers and their close relatives, infomercial producers.

I can sleep better now knowing that when I'm downloading "Lost," I can also buy land on a desert island--for no money down.

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