Network television is moving forward with TV Everywhere, its plan to move television content online, but it looks like there are more than a few aspects of television broadcasting that executives are not willing to forgo — namely the ad load.
At the Cable & Telecommunications Association for Marketing Summit in Denver this week, cable executives made it clear that TV Everywhere will not be a “Hulu for cable.”
And why would it be? Hulu works.
Cable executive are serious about authentication, promising that cable content
will be available next Summer, which I’ve written about here. And although TV Everywhere will be ad supported like Hulu, it will not share the lighter ad load that Hulu content supports. Ads are limited to four or five per episode on Hulu’s network shows, but according to AdAge:
“Shows viewed through TV Everywhere will have a TV-like ad load that
disables fast-forwarding — a quid pro quo for being able to watch
shows like TNT’s “The Closer” on-demand in an environment that
preserves their revenue model.”
Meanwhile, shifting the ad model exactly as it is from offline to online isn’t likely to preserve any revenue model. Online viewing is a different beast, as Hulu quickly learned. With viewers accustomed to fast forwarding through commercials (on television, no less), Hulu quickly learned that their videos work better with a lighter ad load.
The networks are worried that online ads aren’t as expensive, but as audiences move online for their video viewing, the rates will also go up. As I’ve previously written, ads on The Simpsons now earns a higher CPM on Hulu than on FOX. Advertisers are willing to pay for viewers. And when they view content in that space, the networks will be able to charge more.
But TV Everywhere isn’t willing to risk it. Meanwhile, Hulu is currently in talks with cable executives about being a part of their plans online. But it’s still unclear if Hulu will have cable content. According to Jason Kilar, Hulu’s CEO:
“It has to work for consumers and have a strong user experience… We’re open to content that’s worthy of consumption.”
Right now, TV Everywhere is thinking that consumers will watch because they don’t have any other options to see cable content online. As Jack Wakshlag, chief research officer at Turner Broadcasting, puts it:
“If I can get 4.5 times my TV CPM online [the cost to advertisers to
reach 1,000 viewers], I’d be happy and wouldn’t need to do anything. But nobody’s getting four times TV CPMs online. Nobody at
Hulu’s getting twice the TV CPMs. If people who already watch the show
see it with a full commercial load, it’s still a chance to catch up on
shows they miss.”
Web viewers are willing to put up with online ads — to an extent. But betting that consumers will put up with inconveniences to see content they like is not a winning strategy online. Just look at the inconvenient (and nearly abandoned) web video that existed on network websites before Hulu existed. If those terrible interfaces — and annoying ad models — were good for anything, it was proving that if you don’t make the viewing experience enjoyable enough online, viewers will abandon the content.