Home » Internet Overcharging »Online Video » Currently Reading:

TV-Sized Ad Loads Coming to Online Video? – With Overcharging Schemes, You’ll Pay More to Watch Them

Phillip Dampier February 15, 2010 Internet Overcharging, Online Video No Comments

Advertising Age this week predicted online TV could be about to undergo a transformation — into the online equivalent of advertising-packed traditional television.

Starting as early as this fall, that 47 minute “hour long” show you’ve watched with a handful of commercial interruptions may become a 59 minute show, with almost 15 minutes of additional advertising piled on your viewing experience. Worst of all, if your service provider wants to stick you with a usage allowance or “consumption billing,” you will effectively be paying to watch commercials.

Imagine after receiving your monthly pay television bill, a company representative arrives to install a coin meter on the side of your TV. Your monthly fee just gives you access to the channels, he explains. Actually watching them costs more.

Why introduce more advertising?

Nielsen, a ratings measurement service, will start providing its subscribers ad viewing information regardless of whether the viewer sees it on a traditional television or online. The catch is the advertising must be the same across platforms. That means online video could run the same ads your local station or cable network carries.

“The financial models used for the current large video hubs in the online space are not sustainable,” said Jack Wakshlag, chief research officer for Time Warner’s Turner Broadcasting. One way to make online viewing more financially lucrative, several TV executives suggested, is to use it to aggregate viewing of popular shows across TV, online and other emerging media — and then use that rating as a means of negotiating for the cost of an ad against the program.

What’s lending traction to the idea of increasing the number of commercials in online TV runs is the “TV Everywhere” concept currently embraced by industry players Time Warner and Comcast, among others. Under the plan, cable subscribers would be able to watch their favorite shows via broadband for no extra fees, while non-subscribers would be blocked. If the media companies can use this idea to control how consumers watch TV programming, they may also be able to force a more traditional amount of advertising on them, too.

Even worse, many online video providers like Hulu are considering charging viewers their own fees, leaving consumers paying three times – twice in money for broadband service and a subscription fee, once in time wasted sitting through unstoppable ads.

Some consumers don’t mind the trade-off as long as viewing remains free. But with Internet Overcharging schemes, online video ads count against your allowance.

One TV executive told the trade magazine research suggests that 80% to 90% of people would rather watch TV online with the same load of ads as a traditional TV show if it meant doing so for free. “People don’t want to pay more subscription fees on top of their cable subscription fee,” this executive said.

It is likely testing of full commercial loads will precede any large scale rollout, if only to gauge consumer reaction. If people refuse to pay to watch commercial advertising, the industry will have to go back to the drawing board to come up with other ideas to monetize online video.

Search This Site:

Contributions:

Recent Headlines

Special Report — Who’s Who of Broadband for America: Telecom Industry Connections Exposed

October 2, 2009

Be Sure to Read Part One: Astroturf Overload — Broadband for America = One Giant Industry Front Group for an important introduction to what this super-sized industry front group is all about.
Members of Broadband for America
Red: A company or group actively engaging in anti-consumer lobbying, opposes Net Neutrality, supports Internet Overcharging, belongs to an astroturf [...]

Special Report — Astroturf Overload – Broadband for America = One Giant Industry Front Group

October 2, 2009

Astroturf: One of the underhanded tactics increasingly being used by telecom companies is “Astroturf lobbying” – creating front groups that try to mimic true grassroots, but that are all about corporate money, not citizen power. Astroturf lobbying is hardly a new approach. Senator Lloyd Bentsen is credited with coining the term in the 1980s to [...]

“The Verizon FiOS of Hong Kong”: Fiber to the Home 100Mbps Service $35/Month

September 27, 2009

Hong Kong remains bullish on broadband. Despite the economic downturn, City Telecom continues to invest millions in constructing one of Hong Kong’s largest fiber optic broadband networks, providing fiber to the home connections to residents. City Telecom’s HK Broadband service relies on an all-fiber optic network, and has been dubbed “the Verizon FiOS of [...]

BendBroadband Introduces New Faster Speeds, But Offensive Usage Caps the Skunk at the Broadband Party

September 23, 2009

BendBroadband, a small provider serving central Oregon, breathlessly announced the imminent launch of new higher speed broadband service for its customers after completing an upgrade to DOCSIS 3. Along with the launch announcement came a new logo of a sprinting dog the company attaches its new tagline to: “We’re the local dog. We better be [...]

Shaw Steamrolling Through British Columbia in “Sell To Us Or Die” Strategy

September 23, 2009

Stop the Cap! reader Rick has been educating me about some of the new-found aggression by Shaw Communications, one of western Canada’s largest telecommunications companies, in expanding its business reach across Canada. Woe to those who get in the way.
Novus Entertainment is already familiar with this story. As Stop the Cap! reported previously, Shaw launched [...]

CRTC Embarrassed By FCC Net Neutrality Actions?

September 22, 2009

The Canadian Radio-television Telecommunications Commission, the Canadian equivalent of the Federal Communications Commission in Washington, may be forced to consider American broadband policy before defining Net Neutrality and its role in Canadian broadband, according to an article published today in The Globe & Mail.
[FCC Chairman Julius Genachowski's] proposal – to codify and enforce some general [...]

HissyFitWatch: Shaw & Rogers Non-Compete Agreement Tossed, Allowing Shaw Acquisition of Mountain Cablevision

September 21, 2009

In March 2000, two cable magnates sat down for the cable industry equivalent of My Dinner With Andre. Fine wine, beautiful table linens, an exquisite meal, and a Monopoly board with pieces swapped back and forth representing hundreds of thousands of Canadian consumers. Ted Rogers and Jim Shaw drew a line on the western Ontario [...]

Doubletake: Company With 5GB Limit in Acceptable Use Policy Promises “Near-Unlimited Bandwidth Capacity” to West Virginia

September 11, 2009

Just like FairPoint Communications, the Towering Inferno of phone companies haunting New England, Frontier Communications is making a whole lot of promises to state regulators and consumers, if they’ll only support the deal to transfer ownership of phone service from Verizon to them.
This time, Frontier is issuing a self-serving press release touting their investment of [...]

Sit Down For This: Astroturfing Friends Sold on Pro-Internet Overcharging Report

September 7, 2009

I see it took all of five minutes for George Ou and his friends at Digital Society to be swayed by the tunnel vision myopia of last week’s latest effort to justify Internet Overcharging schemes.
Until recently, I’ve always rationalized my distain for smaller usage caps by ignoring the fact that I’m being subsidized by the [...]

Hotel Guests Rebel Against Internet Overcharging: Consumers Won’t Pay More No Matter Where They Are

September 1, 2009

In 2007, we took our first major trip away from western New York in 20 years and spent two weeks an hour away from Calgary, Alberta.
After two weeks in Kananaskis Country, Banff, Calgary, and other spots all over southern Alberta, we came away with the Good, the Bad, and the Ugly:
The Good

Alberta is like [...]

Court Hands Victory to Comcast: Throws Out 30% Cap On Market Share Inviting Buying Spree At Consumers’ Expense

August 31, 2009

A federal appeals court in Washington has struck down, for a second time, a rulemaking by the Federal Communications Commission to limit the size of the nation’s largest cable operators to 30% of the nation’s pay television marketplace, calling the rule “arbitrary and capricious.”
The 30% rule, designed to keep no single company from controlling more [...]

Broadband Speed — It’s All About Where You Live & What Provider You Live With

August 27, 2009

Less than half of Americans surveyed by PC Magazine report they are very satisfied with the broadband speed delivered by their Internet service provider.
PC Magazine released a comprehensive study this month on speed, provider satisfaction, and consumer opinions about the state of broadband in their community.
The publisher sampled more than 17,000 participants, checking their actual [...]

Stop the Cap!

Promoting Better Broadband, Fighting Data Caps, Usage-Based Billing, & Other Internet Overcharging Schemes