Nets Stream Shows, But Pricing Structures Questioned

Networks streaming ad-supported episodes on their Web sites and elsewhere are here to stay.

But despite the uncluttered environment, the chance to insert ads that can't be skipped and the potential to obtain improved performance metrics, media executives didn't give the medium a ringing endorsement last week.

Initiative's Chief Activation Officer Tim Spengler credited the networks for moving aggressively to distribute hit shows on-demand and on multiple platforms--"whenever, wherever" consumers want them. At the same time, he threw cold water on the medium from a buying standpoint--calling it overpriced and saddled with questions about whether it yields higher viewer engagement.

"Right now, the price is a little out of whack," he said at an industry panel discussion. (CPMs for streamed episodes on the Web can be more than double a "live" broadcast on-air.)

Spengler cited a "je ne sais quoi" attitude about whether viewers are noticing the ads and connecting with them. The messages come partly via 15-second pre-roll spots and logo placements that remain on screen as episodes unfold. (To be sure, networks are looking to develop other creative avenues.)



While pricing may be a deterrent, Spengler did offer some encouraging words for networks. Limited inventory is an issue, he said--and that's something networks presumably are only too happy to fix immediately.

Horizon Media CEO Bill Koenigsberg, who joined Spengler at the event, did say that while pricing may be considerable, his agency would "pay more" if the "je ne sais quoi" (perhaps a euphemism for ROI) factor Spengler cited can be demonstrated.

Sarah Fay, CEO of Carat U.S., who also appeared at the event, said her agency is optimistic that the DVR-proof streams will help deliver messages with a new level of impact. "You can't click past the commercials," she said. "It is a lean-forward existence."

ABC broke the ice by streaming hits such as "Lost" and "Desperate Housewives" on as part of a test in spring of 2006. Other networks then followed.

NBC had offered a menu of shows, but held back on "The Office"--with its proven demand for off-air viewing due to strong iTunes interest--since company CEO Jeff Zucker said streaming could hurt its syndication value. This fall, with syndication deals wrapped with TBS and Fox owned-and-operated stations, "The Office" is now available the day after air on

Besides their own sites, distribution options for networks include the coming NBC Universal-News Corp. site, portals and other outlets. Late last month at the Carat Digital Exchange in New York, NBC Universal unveiled research showing that in the fall of 2006, 5 million unique users were watching shows on figure that doubled to 10 million in May. Now, with "The Office," the figures might soon double again.

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