How Downloadable Content is Changing Advertising

By Exclusive Concepts Blog Team

NBC and CBS have just signed deals that will allow viewers to download prime-time broadcasts the day after they air and watch them without ads. NBC has paired with DirecTV, and CBS with Comcast, to offer viewers shows that were previously locked into prime-time slots. The shows will cost 99 cents an episode.

The NBC downloads will not contain ads and the CBS downloads will contain ads that the viewer can fast forward. A few days ago I posted about the conflict brewing between networks and local TV stations as the networks continue to provide content in new ways. Once upon a time the affiliate TV stations were the exclusive venue for the networks’ content and they collected most of the advertising revenue resulting from the broadcasts. Now that the networks are offering content to viewers outside of prime-time, and sometimes outside of television, the affiliate stations have lost their grip on that revenue. Fees for the downloaded broadcasts will no doubt go directly to the network and the cable provider. In the case of CBS, the ads will remain in the downloaded broadcasts but viewers can fast forward through them. If downloads begin to overtake prime-time viewers, will advertisers still want to invest?

TV advertisers might have to get creative like companies who are now reaching out to customers through podcasts. This once commercial-free venue is now being staked out by marketers who are coming up with new ways to approach customers outside of the traditional radio spot. Sponsorships involving a 15 or 30 second commercial at the start of a show are being tried, and some companies are experimenting with using products in the podcast. Rates are high compared to radio: a public radio station in Santa Monica plans to charge $25 per thousand listeners for podcast ads. (The average New York City radio show charges $12 to $15.) The audience is more targeted than the traditional media so it’s worth more to advertisers.

Even when the outlets stay the same advertising constantly changes to maintain its appeal. But the growth of so many new technologies and platforms means that advertising must reinvent itself even more to reach its audience and come up with completely new forms.

Read more about the NBC and CBS deals: Red Herring, San Jose Mercury News, MediaPost.
Read more about podcasting at BusinessWeek