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 Comments:

  • Sam: Hello, I'm Thomas Rutledge CEO Of Charter Cable. My Shareholders in NYC-NJ are on strike. I'm made a whopping $98.5 million dollars. My Union IBEW 3 S...
  • Anthony: Perfect timing with this video. On the day that Canada upholds net neutrality, we get a nice reminder of how horrible the outlook is for the Internet...
  • Tony: Time Warner/ Spectrum would shut off my service , kept billing me ,, I called to ask why and they said they wouldn't stop billing me the full monthly ...
  • John: CSPAN is paid for by cable and sat. operators, it's their organization, and they pay dues per customer....
  • Sandy: I have been with Dish Network entirely too long to keep going through this crap almost every 6 months. I'm not getting quality service like this. If I...
  • Chuck: Hello all we are going through the same type of problems. Ever since Frontier took over Verizon we've had to call every month to get bill changed. Has...
  • Roger: If I'm not mistaken, they don't pay for C-SPAN and may not pay for the religious and shopping channels. If they do, it is a nominal fee. In additi...
  • Limboaz: It's a shame that Google has thrown in the towel with their fiber network expansion, and it's also a shame that Telco's like Centurylink are just so p...
  • Thomas: What is even more amazing is how difficult ATT really is, they are a slow moving beast a snail leaving behind wreckage and a slimly trail. They give n...
  • Wendell: Take them religious channels off . and them Cspan channels off. Them stupid shopping channels off. And leave chiller on......
  • Pam: Okay enough is enough, both Hearst and Dish. You need to get this channel back on the air. I'm paying for a service and only getting 2/3's of my viewi...
  • reader50: Regarding Dish, I'm hoping they are planning to offer wireless internet. We need more competition for home internet, and Dish would need coverage ever...

Your Account: