This week I took a “snapshot” of how TV broadcast networks are commercializing their content for two different platforms of digital delivery: 1) Online (via Hulu) and 2) cable-system-delivered Video-On-Demand (VOD) (via Time-Warner Cable in Brooklyn, N.Y.).
I selected a single prime-time, half-hour comedy program from each network that ran in the last 10 days on both platforms. My measurements focus on ads in a traditional form, whether it is a purchased ad or a promo for a same/sister-network program. Here’s what I found:
ABC: “Happy Endings” from 11/2/11
Cable VOD: Total length stated is 25:00 minutes; Fast Forwarding disabled for entire program.
&n bsp; Total commercial pods: 4
Total commercial time: 3:30 minutes
; Pod 1: 1:00 (2x :30); Pod 2: 1:00 (2x :30); Pod 3: 1:00 (2x :30); Pod 4: 0:30 (1x :30)
Hulu: Total length stated is 21:35 minutes; Fast Forwarding disabled for commercials only.
Total commercial pods: 3
; Total commercial time: 2:30 minutes
&nbs p; Pod 1: 1:00 (0:45 + 0:15); Pod 2: 0:30 (1x :30); Pod 3: 1:00 (0:30+0:30)
CBS: "Two and a Half Men" from 10/31/11
Cable VOD: Total length stated is 21:00 minutes; Fast Forwarding is functional.
; Total commercial pods: 3
&nb sp; Total commercial time: 1:30 minutes
&n bsp; Pod 1: 0:30 (1x :30); Pod 2: 0:30 (1x :30); Pod 3: 0:30 (1x :30)
Hulu: Total length stated is 19:28 minutes; Fast Forwarding disabled for commercials.
&nbs p; Total commercial pods: 4
&n bsp; Total commercial time: 4:00 minutes
Pod 1: 0:30 (1x 0:30) lead-in ad; Pod 2: 2:00 (1x 1:30 [RX Drug with button to online Product Info window] + :30); Pod 3: 0:30 (1x :30); Pod 4: 1:00 (2x :30)
FOX: "The Simpsons" from 10/30/11
Cable VOD: Total length stated is 30:00 minutes; Fast Forwarding disabled for entire program.
&nb sp; Total commercial pods: 3
& nbsp; Total commercial time: 8:00 minutes
Pod 1: 2:30 (1x :60 + 3x :30); Pod 2: 2:30 (5x :30); Pod 3: 3:00 (1x :60 + 4x :30)
Hulu: Total length stated is 22:01 minutes; Fast Forwarding disabled for commercials.
&nbs p; Total commercial pods: 4
&n bsp; Total commercial time: 3:50 minutes
Pod 1: 0:20 (1x 0:20) lead-in ad – brought to you with limited commercial interruption; Pod 2: 1:15 (0:30 + 0:30 + 0:15); Pod 3: 1:00 (0:15 + 0:30 + 0:15); Pod 4: 1:15 (0:15 + 0:30 + 0:30)
NBC: “Whitney” from 11/3/11
Cable VOD: Total length stated is 22:00 minutes; Fast Forwarding disabled for entire program.
Total commercial pods: 5
&nbs p; Total commercial time: 1:45 minutes
Pod 1: 0:30 (1x 0:30); Pod 2: 0:15 (1x 0:15); Pod 3: 0:15 (1x 0:15); Pod 4: 0:30 (1x 0:30); Pod 5: 0:15 (1x 0:15)
Hulu: Total length stated is 21:26 minutes; Fast Forwarding disabled for commercials.
; Total commercial pods: 3
; Total commercial time: 2:15 minutes
Pod 1: 1:10 (0:40 + 0:30) lead-in ad – brought to you with limited commercial interruption; Pod 2: 0:45 (0:30 + 0:15); Pod 3: 0:45 (0:15 + 0:30); Pod 4: 0:45 (0:15 + 0:30)
Top Line Observations
ABC: Ran more ad time on cable VOD than it did on Hulu, but had some unused ad slots on Hulu. Had less commercial pods on Hulu for a similar amount of ad time. Disables fast forwarding wherever possible.
CBS: Ran the least amount of ads for any of the networks on cable VOD, yet ran the most on Hulu (beating FOX by 0:10). The only network not to disable fast forwarding on cable VOD. And the only network not a co-owner of Hulu.
FOX: Ran more ads on cable VOD than any network (at 8:00 minutes more than double the next closest), and more than double its own commercial load on Hulu. Disables fast forwarding wherever possible.
NBC: Ran more total ad time on Hulu than on cable VOD, though it scheduled more “pods” on cable VOD. Had the unique approach of running only one unit -- a single :15 (three times) or a :30 (twice)] per commercial “pod” on cable VOD -- making NBC the smallest per-pod and smallest total ad loader of all 4 networks. Disables fast forwarding wherever possible.
Hulu vs. Cable VOD: I noticed that the total program time shown on Hulu does not include commercials, while the time of program shown on cable VOD, does. Also note that sometimes Hulu states a break has 3 ads, but only runs 1 or 2.
What it Means
Consumer Recognition: All 4 networks are recognizing that online and cable VOD consumers are not going to tolerate the kinds of commercial loads found on linear television (where they can avoid ads easily) because they are used to far fewer and less-lengthy interruptions for Internet-delivered content. This means higher CPMs for advertisers down the road, yet it may produce greater value for advertisers, with greater assurance of actual impressions delivered.
Replacing the DVR?: With the exception of CBS for cable VOD, the networks are trying to “take back” the ability to skip commercials by forcing full-commercial -- and in some cases, full-program -- viewing as an only option. If the DVR is a transitional technology to VOD, will high-paying customers of cable companies stand for having this convenience removed partly or entirely?
It's also noteworthy that Hulu doesn’t do an “all or nothing” disabling of fast forwarding. While there are no traditional “VCR-style” buttons, you can move back and forth within the program by placing an arrow on the timeline bar at the bottom. Ad breaks are shown on this bar; however in the commercial pods, skipping or fast forwarding is not allowed.
The Emergence of Time-Counters: Hulu has created a very sophisticated system of time counters to let viewers know how much time they will be investing, both in the total program, and when commercials come up, in that break. This idea, taken from online “pre-rolls,” will help consumers accept that ads help pay for content. There is some lack of transparency in the lack of clarity for total time on Hulu: does it include commercials or not? This will need to be addressed for consumer confidence. The cable VOD systems will need similar time-counting capabilities to keep up.
Testing & Trials: The different approaches to length and frequency of commercial pods show that the networks are trying many different ways to monetize through advertising. Fast-forwarding functionality is an area where there is testing and learning happening. This all begs the question, what criteria are the decision-makers using to determine success: consumer satisfaction, revenue optimization, or a hybrid?
Update (11/14/11): I received a notice from Hulu that in fact Hulu does not carry programming from CBS. The measurements for CBS "Two and a Half Men" above are in fact from the CBS.com website. To quote the message from Hulu:
“… we actually don’t have CBS on our US service currently (although we are working with CBS for our service in Japan, and we just announced a deal with The CW.) I believe what you saw is that when you search on Hulu for a CBS show, we direct users to the show on CBS.com. We do this as a courtesy when users might be searching for a show on Hulu that we don’t currently offer.”
The redirect is so seamless and non-transparent, and the CBS experience so similar to Hulu, that as a user I did not realize I had left the Hulu site at all. This tells me that Hulu wants to maintain high traffic counts (even through redirections) as it sets up for a possible sale. And it tells me that this policy is a wonderful courtesy for CBS as well as Hulu viewers, since I'm sure it significantly increases their viewership and ad revenue. It would be hard to imagine that CBS has incentive to work out an agreement with Hulu in the U.S. to share revenues. Why pay for the cow if you’re getting the milk for free?