Digital media: Viewers make demands on TV

The capability to order TV content at will is growing fast, so advertisers must be at the top of their game to reach consumers. Maria Esposito reports.

Operating under the suitably new-media friendly working title, the latest video on demand (VOD) service, Kangaroo, illustrates that broadcasters are finally taking on-demand seriously.

The joint venture will see BBC Worldwide, ITV and Channel 4 put aside their differences to create a single destination for more than 10,000 hours of entertainment content, comprising catch-up and archive programming, both free and paid-for.

The service is intended to attract viewers who prefer to download content, often from free sources such as YouTube. It will complement the BBC iPlayer service (see box), and itv.com will continue to feature a catch-up service and simulcasts. However, it will eventually subsume C4's 4oD offering.

With internet protocol television (IPTV) services from BT Vision and Virgin Media, and content from online video aggregators such as Babelgum and joost, the market for online television content has suddenly become crowded, as everyone vies for a share of the lucrative web TV arena.

While Britain has been slow to adopt IPTV or VOD as a regular viewing fixture, players in the broadcast market are banking on the medium's long-term potential.

The uptake of PC-based television in the UK is low, with viewing limited to just one in 100 households this year. This compares poorly with France, for example, where one in 10 homes has signed up.

However, research indicates the sector will boom within the next four years, with the TV download market jumping from a value of £277,000 in 2006 to £65m in 2011, according to Screen Digest. This estimate seems credible, given that 40% of British homes now have a broadband connection, according to Ofcom, and Skyview reports that 37% of people with broadband access download video content.

Lib Charlesworth, director of sales and marketing for BT Vision, believes the growth of the VOD sector is inevitable. 'People realise there will be a fundamental shift in the way consumers watch TV,' she says. 'In the past, watching TV was about broadcast. The next move was recording and that got easier with the personal video recorder (PVR). It's a slow chipping away of people's understanding - it is no longer about broadcasters telling us what to watch.'

While the advent of video recorders, PVRs and VOD has allowed viewers effectively to write their own TV schedules, it has also allowed them to cut out the ads. This is clearly a concern for channels, media agencies and advertisers alike.

'Most media owners have been cautious with how much advertising they are putting out there on VOD,' says Dave Katz, head of trading at interactive media agency Media Contacts. BT Vision, for example, has so far only inserted ads for XBox Halo 3 during the half-time break of football coverage.

Creative culture

Nonetheless, these platforms do present chances for advertisers to get more imaginative. 'It's a huge opportunity for more complex propositions that are easier to explain using video,' says Katz, who believes viewers accept advertising as an inevitable part of VOD's economy. 'Most people are prepared to watch a level of advertising to keep the content free,' he argues.

A recent YouGov survey suggests that Katz is right. It revealed that people will watch ads of up to 15 seconds duration if they are deemed relevant. Sky's own research showed that short ads have a greater impact on viewers, generating 20% higher recall than their long-form counterparts.

While the audience is happy to sit through pre-roll ads and the odd 10-second sponsorship bumper before watching a downloaded or streamed programme for free, the advertising sector is struggling to find an industry-wide set of procedures. 'The issue for agencies is who actually buys the space,' says Katz. 'Is it the traditional TV department or the digital department?' Errol Baran, head of new media sales at Channel 4, agrees. 'VOD is bought differently from TV,' he says. 'It's bought on streams or page impressions and TV airtime is bought based on BARB ratings.'

Baran concedes that this is both an advantage and a hindrance. 'We don't have the level of forensic analysis for viewers by gender or region yet,' he says. 'But it's an incredibly accountable system. You buy 1000 streams, you get 1000 streams.'

At ITV, Gary Knight, the broadcaster's partnerships director, is dissatisfied with the present trading dynamics. 'You have two measurement systems in play - BARB for TV, and then the internet,' he says. 'We need to create a gold standard for measurement. This is vital, as advertisers want to know exactly who is watching.'

Knight is already working on finding a solution, in conjunction with trade bodies IPA and ISBA. As well as establishing an accurate value for online video ads, a 'gold standard' will reassure nervous marketing directors. 'Spend has to be quantified,' he explains. 'They can't spend money at will and they have to provide research based on a legitimate standard.'

While a new standard will undoubtedly be helpful for the fast-burgeoning web TV market, it may not be all that radical, according to Antony Carbonari, interactive and commercial media director at BT Vision. 'It's a case of fine-tuning what's out there already,' he says. 'You have to combine traditional TV 30-second spots, which have a metric currency, with the capability of inserting buttons, banners and interactivity.'

Graham Appleby, director of commercial partnerships at Sky Media, agrees. 'VOD is a hybrid of TV and the web,' he says. 'We are going to have to get more adept at trading in a different way. VOD raises issues not only about measurement, but also about effectiveness, auditing, planning and buying. The industry is not joined up in its approach at all. We are entering a changing world and the way of doing things has to evolve.'

Appleby is, however, positive about VOD's long-term potential. 'We are finding a big demand for VOD on TV,' he says. Sky's video-on-demand channel, Sky Anytime, has become the sixth most-viewed service in the broadcaster's family of networks without any marketing whatsoever. 'Ultimately, if consumers like it, advertisers will like it because they follow the audience.'

DATA FILE - VOD PLAYERS

- BBC

A beta version of iPlayer was launched in July as a download service, allowing users to catch up on the previous seven days of BBC programmes. This will be extended to the Windows XP platform by the end of the year. A streaming service for Apple Mac users and a trial on Virgin Media are also expected within the same timescale.

- ITV

The commercial channel launched an ad-funded model offering largely free content via its portal, itv.com, in July. It offers a 30-day catch-up service for flagship shows such as Coronation Street and Emmerdale, as well as highlights from ITV's archive. Also available are simulcast streams of ITV channels, showing online the same ads seen on TV.

- Channel 4

4oD is a free seven-day catch-up service for C4 content. There is a 99p charge to 'rent' US shows such as Desperate Housewives, and £1.99 to buy an episode. The service is ad-supported and features interactive pre-roll ads and 10-second sponsorship clips before each show. This service will be subsumed into Kangaroo, once the joint venture launches.

- BSkyB

Sky offers VOD via TV, PC and mobile. Subscribers to Sky HD or Sky+ receive Sky Anytime free, which delivers entertainment, sports and movie content direct to their set-top boxes as a download. For those subscribers, most of Sky Anytime's content, which is regularly refreshed, is free, with the exception of certain premium films.

- Five

This paid-for model is more limited than its rivals. Launched in conjunction with BT Media in 2006, viewers can watch only four shows - CSI, CSI:NY, CSI: Miami and Grey's Anatomy. The most popular episodes are those available before TV transmission. Costs range from £2.49 for CSI: Miami one week before TV transmission to £1.49 after.

- BT Vision

Using a hybrid box, split between a Freeview-like channel line-up and streamed VOD programming, this IPTV service offers kids shows such as Balamory and Bob the Builder from 49p. Prices for TV programmes including Six Feet Under, Nip/Tuck and Curb Your Enthusiasm start at 79p with sports events available from £1.99.

- Virgin Media

Subscribers to the premier television package, Size: XL, can access VOD content as part of their subscription. Other customers pay £5 a month for unlimited access or use the pay-per-view facility. Virgin Media also offers a free catch-up service, comprising a seven-day watch-again feature for some programmes.

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