• by Larry Dobrow , March 16, 2004

In yet another attempt to provide a user-friendly alternative to the 30-second television ad, a new company called SpinDVD is partnering with publishers of consumer magazines, retailers, and Hollywood studios to get ad-supported DVDs into consumers' hands.

The company is far from the first to stumble on the idea of promotional DVDs. Fox, for example, sent 15,000 DVD-ROMs promoting The O.C. to teenage "sneezers" (influencers who spread the germs, so to speak). That said, nobody has invested in the DVD's potential as an ad format to the extent that SpinDVD has.

"The DVD is a phenomenon in its own right," enthuses president and chief executive officer Scott Spinucci. "It's the one format that is a viable alternative to TV, and it's significantly less expensive."

If the company's model works as planned, the DVDs will be distributed via magazine inserts, displays at retail stores (think Blockbuster), direct mail, and home-video releases. SpinDVD handles all production and licensing, and is offering publishers and other distribution partners sales help as well. The DVDs can feature anything from music and video game demos to movie previews and sample book chapters.

Benefits include high audio and video quality as well as the potential to include interactive content (Web links, etc.). Also, household penetration of DVD players has surged to around 60 percent, with that figure expected to exceed 90 percent by 2007. As for drawbacks, well, a DVD-ROM isn't going to magically insert itself into consumers' players or computers in the middle of Friends. And it's far from a given that publishers and Hollywood studios will jump at the chance to include the DVDs in their magazines and home-video releases.

Spinucci disputes this, especially in regard to the magazine medium. "They've sort of been hurting," he argues. "We're coming in and saying 'we can develop a product that works for you and that's going to be a new profit center, and you're not going to have to devote one of your people to selling it.' I'm biased, but it seems like a no-brainer." Spinucci estimates that the DVDs could generate $6 to $10 million per year per magazine.

While Spinucci says that National Geographic would be a natural choice for the DVD program ("what a great way for them to promote their line extensions"), he uses People to illustrate how he envisions DVD tie-ins with magazine content. "Let's say they recommend some music or a video in their 'People Picks.' They can say 'for more, check out the disc in the magazine.'" Implications vis-à-vis editorial integrity aside, the revenue potential should keep the conversations flowing.

Although Spinucci is mum on whether any deals have been cemented, he's met with Time Inc., among others. During his pitches (to potential investors as well as publishers and other distribution partners), he's been careful not to suggest that SpinDVD will immediately revolutionize advertising. "I see us more as complementary," he explains. "The biggest fault that the Internet made the first time around was coming in and saying 'we're going to replace everybody and everything.'"

Spinucci says initial meetings with would-be advertisers have been promising; many, he claims, are enthused about the possibility of lengthier ad units without sacrificing sound or picture quality. He identifies automotive and pharma as two potential targets for the DVDs, the former because of its early success with similar programs (Cadillac distributed 750,000 copies of an Escalade DVD) and the latter because of the difficulty of cramming FDA-mandated information into a 30-second spot. "Look at the Levitra Super Bowl ad--they spent $1.5 million for 30 seconds, and most people had no idea what they were selling," he says. "On the DVDs, they'll have more space to play with."

By this time next year, Spinucci hopes to have "at least three solid magazine clients" as well as sales in excess of $1 million. Cost of a SpinDVD prototype runs between $75,000 and $125,000.