VOD Bucks: Ad Rich Now, HD Rich Later

Comcast Spotlight believes it will make $100mln on VOD, ITV and Web site ad deals, or 7% of its estimated $1.4bln ’05 revenue. A much larger percentage of Comcast’s local and national spot ad revenue "will be that way" by decade’s end, Spotlight pres Charlie Thurston told Kagan’s VOD Summit. There are 4 ways for ops to make a bundle from VOD ads now, he said: long-form showcase presentations; sponsor-unique content; yellow-page-type features (video or text/graphics) from classified ads to recipes; and refreshing ads in VOD content taken from linear channels. "A few years from now, there’ll be 40 [ways]," Thurston said. As VOD penetration grows, ads will take on a "ping-pong" nature, where 30-sec spots will invite viewers to watch longer messages on VOD and ITV, plus explore information on the Web. — HD: Operators will have a robust assortment of HD content for VOD within 2 years-if they can work with content providers on economics, security, scale and consumer education. On-demand HD "will happen before you know it and ramp up like a hockey stick," iN Demand chief Rob Jacobson promised, noting 4.5mln cable HHs will be taking his 2 HD linear services by year’s end. As phenomenal as the opportunity may be, cable will not realize it until content providers are convinced VOD is a safe window and the universe of HD HHs with VOD access reaches critical mass. "Before you jump into the water, make sure the content is protected," Showtime evp Mark Greenberg warned. The release of HD DVDs should accelerate HD VOD development, so long as encryption issues are solved, panelists noted. — Simon Applebaum